Responsible Endowments Coalition

by Dan Apfel

Picture the classic college campus and the scene is likely to be idyllic: brick buildings covered in ivy, students walking to class, and a feeling of serene isolation from the world at large and even the local community. The green grass, the dining hall food, and the pace of life are all different than they are outside. Inside life appears good for everyone; it may even feel socially just and responsible, with the university the benevolent, doting parent. This is what students refer to as the college “bubble”. But, although many people feel that sense of campus insularity, colleges and universities are by no means isolated from the real world. In fact, they are integrated in the world in all of their operations, but especially through finances: They collect tuition, pay salaries, and invest their money.

Before last year’s economic collapse, college and university endowments represented over $400 billion in assets, second only to foundations as a nonprofit private pool of capital. Many schools amassed so much money tax-free, in fact, that the Senate Finance Committee began reconsidering their status as tax-exempt organizations. But while schools are created for a positive social good—to educate young people—and universities are at the forefront of green practices, university endowments often work in opposition to their institution’s values, investing without regard for the social and environmental impacts of their investments.

Luckily, at many schools around the country, students are working to change the way endowments are invested to ensure that the investments are in line with the school’s values. You can support these efforts too by insisting that your alma mater take its mission into account in its investment decisions.

Already, 37 schools in the United States have set up Advisory Committees on Responsible Investment (ACRI) made up of students, administrators and other community members, which provide guidance on proxy voting to their trustees. Some colleges and universities are engaging in corporate dialogue and filing shareholder resolutions, and some have made investments in community development banks and credit unions.

At Bard College, a beautiful campus on the Hudson River in Annandale, N.Y., students on the college’s ACRI decided they wanted to make a difference on an issue important to them and the campus: food. Bard owned McDonald’s stock, and working with the Investor Environmental Health Network and the AFL-CIO, the College filed a resolution asking for changes in pesticide use in the McDonald’s supply chain. McDonald’s first tried to stop the resolution, but later sent representatives to Bard and negotiated a settlement. McDonald’s agreed to implement a comprehensive plan to change its potato buying policy. Students at Bard were able to negotiate with one of the world’s biggest corporations, and because McDonald’s is the largest buyer of potatoes in the world, the change they negotiated will have a huge impact.

The Responsible Endowments Coalition (REC) supports students, like those at Bard College, and others involved with colleges and universities across the country who are advocating for and implementing responsible investment policies and practices at their campuses. REC also advocates nationally for responsible investment at colleges and universities. To help your alma mater—or your children’s—change its policies, write a letter to the university president and include it with your next donation. Give REC a call, or for a sample letter visit REC’s website at www.endowmentethics.org and click "get involved."