As a college or university alumnus, do you know exactly where your money goes when you write your check in response to the annual appeal? As a college student or parent of a college student, do you know how your university manages its often sizable endowment?
Chances are you don’t. And why should you? How colleges and universities manage their endowments isn’t a subject that attracts much attention. It’s a very important issue, though. Our institutions of higher learning manage $340 billion in investment funds.That’s a whopping amount of money—and money is power. If they chose to, colleges and universities could play a major role in shaping corporate policy, both by favoring green companies over brown ones and by encouraging the companies they own to be more socially and environmentally responsible.
Historically though, our colleges and universities haven’t paid much attention to socially responsible investing. More often than not, their approach has been business as usual.
A new organization is tackling this issue directly. It is called the Responsible Endowments Coalition, and it’s got a threefold purpose. First: Get college and university fund managers to invest based on social and environmental, as well as financial, considerations. Second: Help institutions of higher learning better understand their role in society. “Colleges and universities are mission-based institutions,” says founder and executive director Morgan Simon, “and mission-based institutions have an implied responsibility to work, wherever they’re active, to help create a more just and sustainable society.” Third: Empower student activists and alumni by equipping them with tools, resources and networks of connection.
The Responsible Endowments Coalition grew out of Simon’s time as an undergraduate at Swarthmore College, where as a member of the college’s committee for investment responsibility she led shareholder efforts to convince Lockheed Martin and FedEx to add sexual orientation to their non-discrimination clauses and to offer partnership benefits. This brought Simon into contact with other student activists, who realized they should be coordinating their efforts.
In 2004, the Responsible Endowments Coalition was born and has been growing ever since. Today, about 60 institutions, including many elite and state universities, are members, and “we get two to three inquiries a week,” says Simon.
When asked about the coalition’s main accomplishments, Simon cites two fronts: Conceptual and practical. “Our main achievement has been the idea of a movement of colleges and universities to forward responsible investing. We’ve also seen a lot of neat specific initiatives. For instance, one of our members, Macalester College, recently put a portion of its operating budget in a community bank. A student intern will work at the bank, and the bank will put ATMs on campus. It’s a great example of how responsible investing can build town-gown relationships.”
If you’d like colleges and universities to invest more responsibly, there are a number of ways to get involved. If you’re an alumnus, when you get that familiar letter asking for a donation, you can write back and ask (nicely, of course) how they invest their money. As a student, or as the parent of a student, you can pose the same question.
Students and alumni can also get directly involved with the Responsible Investments Coalition, which is helping to coordinate precisely this sort of activism on campuses throughout the country. The organization has an open-door policy. “We welcome people’s calls,” says Simon.
For more information, visit the Responsible Endowments Coalition website.