Where’s Our Money? Looking at Other Schools

Students at Brandeis recently wrote a letter in their school paper asking for endowment transparency due to the effect investment decisions have on student life, noting that “the endowment has a direct effect on financial aid, department chairs, fellowships and research opportunities”. The students’ decision to pursue transparency at their school on the basis of financial returns is interesting. Most pleas for transparency are initiated because of social justice considerations. For example, is our school invested in companies that treat their workers well? Does our school refuse to invest with companies whose actions harm the environment? Most schools don’t do this; they invest blindly and then don’t utilize their shareholder power by voting their proxys. Because of this, there has been a growing movement of students demanding accountability and active shareholding from their universities. Yet Brandeis students bring up a great point: that this transparency will not be at the expense of returns, but perhaps to its benefit. Transparency will open up the endowment to increased scrutiny and open avenues for student involvement and activism. If a school is truly interested in promoting the active citizenship of its student body, and in aligning its institutional decisions with its values, transparency should not be an issue.

It can be assumed that transparency will lead to increased socially responsible investment, as schools will not want to jeopardize their reputations and their investment decisions will be more closely monitored. This can lead to gains, as socially investment has performed demonstrably well over the past few years. There are upwards of 20 studies that show that SRI mutual fund performance is comparable to non-SRI mutual fund performance, and the oldest SRI index (started in 1990) has had even higher rates of return during this time than the S&P 500, a traditional index. And, obviously, the rapid growth of socially responsible investment provides the most compelling support for SRI’s performance. Potential investments can, and should, be screened for both social/environmental impact and financial return. And, this can aid the “bottom line”, as students at Brandeis are saying.

While transparency and socially responsible investment work reciprocally, many institutions have claimed that they are investing in socially responsible ways, but don’t want to make specific information public because they don’t want to publicize their “financial strategy”. This is problematic. First of all, a school with a compelling SRI would generally want to make this known to promote public relations and bolster their reputation, and their failure to do so seems questionable. Secondly, there are ways to make one’s endowment transparent without undermining a financial strategy. For example, Colombia provides public records of their investments – they just won’t give out records for the three preceding months. Finally, the idea that knowledge about a university’s financial plans and investments would negatively affect returns is not really valid in and of itself. In their article, Brandeis students point out that Harvard and Yale “each release lists of their investments along with a record of how their proxies vote on shareholder issues”. Harvard and Yale are two highly reputable schools and have the two largest endowments in the country with some of the best investment managers. Would they make financial decisions that put their reputation and returns in jeopardy? Definitely not. Students at Tufts should demand this same transparency, shareholder engagement, and socially responsible investment.

The Brandeis article can be found here:

http://thebrandeishoot.com/articles/8606

ORIGINALLY PUBLISHED: http://www.trcommons.org/2010/10/wheres-our-money-looking-at-other-schools/

Local banking: Bank on it

This past July, Republicans in the Senate rejected a bill aimed to help struggling small businesses through the expansion of loan programs and tax breaks. As David Herszenhorn reported in the July 30 New York Times article "Republicans Block Bill to Aid Small Business," this move was largely spurred by Republican desires "to deny Democrats any further legislative accomplishments ahead of November's midterm elections." Herszenhorn's reasoning fails to recognize other justified reasons for Republican opposition — namely, the cost of the program, which would be an additional stress on our already strained economy. But the proposition of the lending program itself and the increased need for one given the current recession should cause members of the Tufts community to reexamine the business practices in which we are all involved.

Firstly, we need to realize that this recession is the result of large banks and irresponsible banking practices. There are a variety of factors that led to the current economic situation, but all of them (irresponsible borrowing, lack of regulation, lack of transparency about risks being taken) somehow come back to the "too big to fail" banks. Big banks package and resell large loans, capitalize off of students and uneducated borrowers, charge big fees and then take risks with our money. At the same time, they have little to no beneficial impact on our local community. That's why this bill would have been a great step toward remedying some of those practices that got us into this position in the first place; the small business loans and tax breaks were going to be distributed by creating a $30 billion lending program that would engage with local banks, which are proven to make more loans to small businesses. They also charge fewer fees than the big banks, are less likely to engage in the irresponsible borrowing of larger banks and are more accountable to their clients.

It's sad that this bill was shut down and equally sad that it is being lauded as a partisan issue. We can all agree, regardless of political orientation, that supporting our neighbors, assisting fledgling small businesses, maintaining long−standing businesses in our community and promoting responsible banking practices should be priorities. That's why Students at Tufts for Investment Responsibility (STIR) is launching our campaign for community investment at Tufts. Let's put our money in the community and act as more than "global citizens" and act as local ones, too.

This idea is hardly new. The Community Reinvestment Act of 1977 encouraged banks and savings associations to assist borrowers of all income levels in their communities. The bill was originally passed to prevent redlining, or participating in discriminatory credit practices to low−income (and primarily black) borrowers. But even though it has been more than 30 years since the bill's passage, we can still do much, much more. As tuition−paying students at this school, we have power. Furthermore, the reputation and $1 billion endowment of Tufts University is powerful. We need to make a collective statement and say where we want to put our money and how we want to be active members of our community.

Students at Macalester College have done this; they moved $500,000 to a local bank in 2007, and the bank is now working to establish student internship opportunities at the bank and through the local businesses the bank supports. And at Mount Holyoke College, they raised $25,000 for a pilot Responsible Investment Fund that has invested in a nearby community−development financial institution that emphasizes local lending. These examples from peer institutions demonstrate that community investment is not simply possible but also beneficial. Aside from material benefits, Tufts will reap the rewards, such as an improved reputation and town−gown relations that come with such a progressive, community−oriented decision. Change really is possible, and other schools are catching on. Let's join them and do what Congress failed to do this summer. Let's support community investment!

ORIGINALLY PUBLISHED: http://www.tuftsdaily.com/op-ed/local-banking-bank-on-it-1.2336704

Tufts deserved ‘D’ for endowment transparency

Tuesday's front−page article on Tufts' sustainability ratings highlighted many of the great ways the university works to build a sustainable community. However, the article seemed to focus on the flawed methodology of the Sustainable Endowments Institute (SEI) in creating their College Sustainability Report Card.

For example, the questions and criteria used were said to "be flawed and vague," and Tufts is currently focusing on a different study, according to Executive Vice President Patricia Campbell. The student body must do its own research to determine the validity of these claims. We should question whether the university's participation in a different study — namely, the Sustainability Tracking, Assessment and Rating System (STARS) — is necessarily more effective.

An area where Tufts consistently performs poorly is in its Endowment Transparency Rating. This year, the school earned a "D." Yet this poor grade has little to do with flawed methodology or vague questions. Instead, it accurately speaks to the current endowment transparency climate at Tufts. Presently, endowment holdings and proxy voting records are only available to top administrators. This is incredibly problematic and quite different from practices at other nearby schools, such as Harvard University, where proxy voting records are fully accessible to the entire public.

The College Sustainability Report Card accurately assesses endowment transparency by asking how the school handles proxy voting, who is given access to investment information, where endowment holdings are held, and whether alumni can direct gifts to an investment fund allocated to tackle sustainability issues. All of these questions have multiple possible answers, as well as space for clarification.

For example, in response to the question, "Where is information about proxy voting records made available?" there are five possible answers, including: information is not made available; information is available at the investment office or similar office on campus; information is sent to individuals upon request; information is on the school website with password protection; and information is on the school website and is accessible to the public. This allows for a specific and finely tuned ranking.

On the other hand, the STARS system, which Tufts is adopting, is much less specific. Like that of the SEI, the rankings are derived from self−reported data from Tufts. However, STARS uses simple "yes" or "no" questions. For example, they simply ask the school to respond in the affirmative or negative to broad topics such as "endowment transparency," "committee on shareholder responsibility" or "investment screening." Under these broad criteria, schools could score highly even if their transparency committees or screened investments are so small or so ineffective as to be basically nonexistent.

Obviously, the school should not fall prey to the multitude of ineffective ranking organizations. On the other hand, we should ensure that any decisions to work with a particular ranking organization are motivated by the desire to evaluate Tufts truthfully and will not result in possibly skewed or misleading rankings.

At the end of the day, Tufts deserved a "D" in endowment transparency, and the school should recognize that and work to promote change. Hopefully, we will see a commitment to endowment transparency that will pass the test of any ranking system.

+The article was printed in the Tufts Daily and can be found here:

Looking at Other Schools

Students at Brandeis recently wrote a letter in their school paper asking for endowment transparency due to the effect investment decisions have on student life, noting that “the endowment has a direct effect on financial aid, department chairs, fellowships and research opportunities”. The students’ decision to pursue transparency at their school on the basis of financial returns is interesting. Most pleas for transparency are initiated because of social justice considerations. For example, is our school invested in companies that treat their workers well? Does our school refuse to invest with companies whose actions harm the environment? Most schools don’t do this; they invest blindly and then don’t utilize their shareholder power by voting their proxys. Because of this, there has been a growing movement of students demanding accountability and active shareholding from their universities. Yet Brandeis students bring up a great point: that this transparency will not be at the expense of returns, but perhaps to its benefit. Transparency will open up the endowment to increased scrutiny and open avenues for student involvement and activism. If a school is truly interested in promoting the active citizenship of its student body, and in aligning its institutional decisions with its values, transparency should not be an issue.

It can be assumed that transparency will lead to increased socially responsible investment, as schools will not want to jeopardize their reputations and their investment decisions will be more closely monitored. This can lead to gains, as socially investment has performed demonstrably well over the past few years. There are upwards of 20 studies that show that SRI mutual fund performance is comparable to non-SRI mutual fund performance, and the oldest SRI index (started in 1990) has had even higher rates of return during this time than the S&P 500, a traditional index. And, obviously, the rapid growth of socially responsible investment provides the most compelling support for SRI’s performance. Potential investments can, and should, be screened for both social/environmental impact and financial return. And, this can aid the “bottom line”, as students at Brandeis are saying.

While transparency and socially responsible investment work reciprocally, many institutions have claimed that they are investing in socially responsible ways, but don’t want to make specific information public because they don’t want to publicize their “financial strategy”. This is problematic. First of all, a school with a compelling SRI would generally want to make this known to promote public relations and bolster their reputation, and their failure to do so seems questionable. Secondly, there are ways to make one’s endowment transparent without undermining a financial strategy. For example, Colombia provides public records of their investments – they just won’t give out records for the three preceding months. Finally, the idea that knowledge about a university’s financial plans and investments would negatively affect returns is not really valid in and of itself. In their article, Brandeis students point out that Harvard and Yale “each release lists of their investments along with a record of how their proxies vote on shareholder issues”. Harvard and Yale are two highly reputable schools and have the two largest endowments in the country with some of the best investment managers. Would they make financial decisions that put their reputation and returns in jeopardy? Definitely not. Students at Tufts should demand this same transparency, shareholder engagement, and socially responsible investment.

The Brandeis article can be found here:

http://thebrandeishoot.com/articles/8606

Tufts Daily cartoon, February 5, 2009

Bard flexes shareholder muscle

Congratulations to Bard College for using their shareholder power to reduce McDonalds' pesticide use! Hopefully, Tufts will one day be leaders in this kind of bold and necessary action.

The Daily digs deeper into the endowment - do we have the 'expertise' to have a say?

A two-part Tufts Daily feature on endowment transparency - one published on Friday, and one today - investigate the necessity of community involvement in the endowment process, which is exactly what STIR is all about.

Friday's article is titled "Tufts Behind on Endowment Transparency." The money quote:

There are deeper problems with the Tufts transparency policy than just the dearth of information publicized within the community, though. Tufts’ financial policies seem to be directly at odds with its goals as an institution that promotes active citizenship and student engagement.

"Financial transparency is about democratization,” Alissa Ayden, a sophomore at Amherst and chair of its Advisory Committee on Socially Responsible Investing (ACSRI), said. “Every single member of a college or university community has a stake in the endowment. The students’ educations are made possible by the endowment, workers and professors are paid by the endowment, and alumni and even current university community members pay into it directly. Financial transparency says knowledge is power and everyone should have some. If the status of the endowment affects everyone, how come only a small number of people actually know what is going on with it?”

Ayden explained that, aside from democratizing knowledge, the main reasons for endowment transparency are practical.

“If we don’t know what our investments are, there is no way we can be engaged shareholders,” she said.

Today's article has some great coverage too, and illustrates perfectly the contrasting attitudes between Tufts and peer institutions:

Carmen Rose Duffy, investment associate at Swarthmore, agrees that student committees should keep colleges in check.

"The committees [at Swarthmore] were created as a learning process for the students, and [maintaining] transparency was to reassure them that our investments were ethical and responsible," Duffy said. "We didn't know that students were interested until they came to our door and asked how we do things. Transparency offered students an opportunity to learn about investor responsibility."

While these policies may look great on paper, one concern is that students are not qualified to be making such weighty financial decisions. While he believes that students may be capable of making some small investment decisions, Tufts Board of Trustees Vice Chair Peter Dolan fears that students are not qualified enough to understand larger investments.

"I don't think they have the expertise to do that, and we fortunately have alumni and trustees and donors who are actively involved in [those decisions]," he said.

In our opinion, Vice Chair Dolan's statement - and the somewhat misleading title, "Some administrators find students unqualified to handle investments" - imply that unqualified students are trying to take control of the endowment. But all that the ACSR does is offer nonbinding advice to the Board of Trustees - they have no actual power over our investments, and we are not advocating that they should.

If you have faith in our undergraduates, graduates, alumni, and faculty to show the professionalism to offer nonbinding advice to our Board of Trustees, then please join us and help us prove ourselves to the them. We put 100% of our faith in them; they should have more faith in us.

The art of giving

Danika Kleiber '02, chair of the alumni relations committee for our allies at the Tufts Progressive Alumni Network, has written a great op-ed that appeared in today's Daily that captures well the perspective of a growing number of alumni:

"...while I do wish Tufts well, I am going to withhold any direct donations to their coffers until they cough up some transparency and make a commitment to investing money in ways that make the world a brighter place, and I’m going to encourage other alumni to do the same. However, since I do sincerely believe that one of the best things about Tufts is its students, I’m going to use my hard-earned paycheck to support the Tufts Progressive Alumni Network (TPAN) Social Justice Fund ... That way I can still support the institution I love, but with the smug knowledge that my money will go to Tufts students working to make their school live up to its full potential."

The big push

Today's Daily article, "Groups petition to expand ACSR," is covering STIR's campus-wide push to raise awareness about making our ACSR bigger and better - with the help of the first unanimous TCU Senate resolution in two years.

STIR, a new student group that has formed to push for increased endowment transparency, and the Senate will officially present this argument to the administration today in a packet of information. It will include a STIR petition with 190 signatures and a resolution that the Senate passed on Sunday.

The Senate’s resolution follows up on a similar one that the body approved last spring, but to little avail.

“The TCU Senate urges the Board of Trustees and the Officers of Tufts University to allow the ACSR to undertake broader activities towards shareholder engagement, such as corporate dialogue, filing shareholder resolutions and increasing transparency in a way that will both protect the security of the endowment and permit greater community engagement,” Sunday’s resolution, which garnered unanimous support, read.

“I think that STIR is advocating for a really important cause on campus, and we’re going to help them as much as we can,” TCU President Duncan Pickard said.

The consensus: socially responsible investing is good for the pocketbook

Thanks Danielle for finding this great article from Worldchanging on the financial edge that social responsibility, transparency, and oversight bring to the investing process:

"SRI [Socially responsible investing] mutual funds have begun to outperform their "hard-headed" competitors. That's right, investing in doing good makes you more money. As Green Money Journal reports, 16 of the 21 funds with $100 million or more in assets "achieved the highest rankings for performance from either or both [financial analysts] Morningstar or Lipper," compared with only 32% of all mutual funds.

But here's the twist: it turns out that not only does SRI make investors more money - standards of transparency, accountability and social responsibility make corporations more money.

Some of this competitive advantage is due to the fact that environmental efficiency and good working conditions, while a hit to the short-term bottom line, often pay themselves back handsomely. Companies with the guts (and shareholder pressure) to make investments in sounder practices often do better than their short-term focused competitors at finding and implementing innovations as well.

But it's not all compact flourescent lightbulbs and childcare. Socially responsible businesses are also run better as businesses. And, it turns out, financial transparency (being honest and open with your books) and corporate democracy (allowing shareholders and even employees a strong voice in decision-making) are excellent predictors of both profitablity and shareholder return."

The article cites articles by Barron's and the Quarterly Journal of Economics that aren't available online, but to read more about the profit advantage of investing right, you check out our earlier post on the Financial Times's coverage of this new awareness.

Thank you TPAN!

Everyone at STIR would like to give a big thank you to the Tufts Progressive Alumni Network for their support. TPAN and STIR are natural allies, both working to support progressive causes at Tufts and to influence university policy. But TPAN's quick responsiveness to our call for help, adding their names on our petition, and allowing us to use their precious front page real estate for our cause have all really helped us take the movement to the next level.

So to Eva, Danika, Louis, Doug, and everyone at TPAN, a great big thank you from Students at Tufts for Investment Responsibility on behalf of everyone who wants to bring change to our endowment's investment policies. Seniors and alumni looking to network, share resources, and help continue to bring about change at Tufts, please take note.

PLEASE SIGN OUR PETITION!

Our petition to the Tufts administration and the Board of Trustees, in support of the full, restored Advisory Committee on Shareholder Responsibility, is online!

Please click on the link above and show your solidarity by adding your name to the list. If you'd like to really help out, please share with friends, family members, faculty, alumni, grad students - any member of the Tufts community with a stake in our endowment being managed in a transparent, sustainable, responsible manner. If you click "bookmark" in the upper-right corner of the petition, you can easily share or post on Facebook, Myspace, and a number of other social networking sites.

One important thing to know is that the petition site does not sell or share the personal information that you will be asked to supply. Your email address will be used for one confirmation message; your physical address is requested to prevent fraud. But rest assured, they will not use this information. STIR has also been extensively petitioning in person and has actually gathered even more signatures offline than on the petition site - so if that number looks low to you, just remember to double or triple it in your head to get the real number of names that we have supporting us! We will be sending the petition, with all collected names, to campus media, local media, and the administration in the near future.

So go ahead - sign and show your support! And please spread the word, and help us by providing the critical mass necessary for the administration to take our demands seriously.

The Madoff mistake

Today in the Tufts Daily: the risks of focusing solely on the bottom line. Perhaps if the Advisory Committee on Shareholder Responsibility was given full advisory power and the ability to communicate with the administration and the community as promised, we could have avoided this fiasco.

“The thing about Madoff is that people couldn’t get to him directly,” Economics Lecturer Chris McHugh said. “He was playing hard to get.”

It was this phenomenon, it appears, that led Tufts to entrust $20 million to the Ascot Partners hedge fund and pay the fund yearly fees, all in order to gain access to Madoff’s consistent 10 to 17 percent returns.

And until the foundations of Madoff’s carefully constructed ruse came crashing down, the results appeared encouraging. According to Director of Public Relations Kim Thurler, Tufts administrators were under the impression that the investment had accumulated returns in the neighborhood of $5.6 million since it was originally made in 2005.

...

Laura Goldman, who runs the money management firm LSG Capital, called the university’s decision to invest through Ascot Partners and pay the associated fees irresponsible.

“They were fees way out of line for turning somebody over to somebody else,” she told the Daily. “[Tufts] should have said, ‘Listen, please introduce us to Madoff.’”

Dungan said that the university tried to skip the middleman, but like other potential investors, was turned away by Madoff.

“We … were told that Madoff was not taking any new separate accounts. Our only way to access this opportunity was through one of the various feeder funds,” she said in an e-mail.

But while the administration suggests that the front door was closed, Goldman said Tufts investors should have knocked harder. She argued that with a $20 million principal, the university could have found a way to avoid the middleman.

“Of course they could have called [Madoff],” she said. “When you’re the Tufts endowment, I think you can probably call Jesus Christ. That’s how the brokerage industry works.”

Goldman, a former Merrill Lynch employee who now operates out of Israel, met Madoff in the ’90s. She recently published an online account in which she describes the encounter, noting Madoff’s evasiveness and a plethora of red flags. After speaking with him, she recalls, she encouraged others to withdraw their investments from his accounts.

According to Goldman, Tufts too should have seen the warning signs. “Anyone who was at any time researching this knew something was wrong,” she said.

Maybe things didn't have to be this way. To invest in trustworthy, socially conscionable enterprises, and not get-rich-quick schemes, is the only way we can build a healthy and sustainable endowment worthy of our name.

Responsible investing in the Financial Times

Two Financial Times articles sent to us from Cheyenna at the Responsible Endowments Coalition caught our attention - one about how responsible investing is further entering the mainstream, and one about how many are looking to responsible investing strategies as a way out of the current financial crisis.

Investing in doing good can be good risk management.

Investing the old-fashioned way, just by looking at a company’s financial statements and deciding how the current share price relates to the fair value of the stock, is so last year.

Instead, the most hard-headed commercially-minded asset managers are talking about a new form of investment process, including a checklist more usually associated with Greenpeace or Oxfam. Climate change, corporate responsibility, human rights – all these come under the banner of sustainable investment, and a broad range of industry participants have simultaneously come to the conclusion this is the way forward.

“It’s not a manifesto for saving the planet, it’s a tool for better assessing risk,” says Charles Cronin, head of the CFA Institute Centre for Financial Market Integrity, EMEA. “It’s just another way of peeling the investment onion.”

Investors sign up to a better world.

As markets collapse, investors are turning to sustainable investment as a possible way out of the maelstrom. (PDF)

The United Nations Principles of Responsible Investment were continuing to gather signatories, said James Gifford, UNPRI’s executive director. “You might expect this agenda to have less salience at the moment,” he said, “but just 20 minutes ago, the Shell pension fund signed up.”

...

“We need a more responsible and sustainable form of capital markets,” agreed David Blood, managing partner of Generation Investment Management, which has continued to win mandates for its sustainable investment strategies in recent weeks.

“This is clearly a horrible crisis, but it is also an opportunity to take stock and think of ways to build a more sustainable form of investment.”

Check them out! It's well-explained, thorough, and interesting reading.

STIR: an FAQ

Socially Responsible Investing and the Tufts Endowment:
An FAQ from your friends at STIR

In our everyday activities, we often encounter similar questions about our motives, and objections to our agenda. We've compiled a list of some of the most common questions here if you'd like to learn in more detail what we're about and why we believe what we do.

What is STIR?

Students at Tufts for Investment Responsibility (STIR) is a movement that has grown out of years of pressing the Tufts administration to invest the endowment in more transparent, democratic, and socially responsible ways. We see ourselves as part of a larger movement taking place on campuses nationwide, as well as in a growing number of businesses and other large and powerful institutional investors, to redefine the nature of investment beyond maximization of profits without regard to political, social, or environmental concerns. In the short term, however, we're trying to empower our school's ACSR, the body that is supposed to help advise Tufts in making these decisions, but which the administration has disenfranchised.

What is the ACSR?

The Advisory Committee on Shareholder Responsibility (ACSR) is an existing committee at Tufts which was created to help serve as a bridge between the community and the administration in helping provide input into how Tufts can be a socially responsible shareholder. Many other schools have taken steps to create powerful advisory or oversight committees comprising faculty members, alumni, graduate and undergraduate students, and other democratically chosen representatives, which is what was originally proposed to the administration. Instead, what we have is a small committee (three undergraduates) which has little to no say in any investment decisions. Furthermore, the ACSR is completely cut off from our community by nondisclosure agreements, preventing them from discussing their work or serving as true representatives of the Tufts community, as well as from making better informed decisions with the support of others.

STIR advocates an ACSR that is allowed to be influential, open, and representative of the Tufts community. We wouldn't expect the TCU Senate to do their job if there were only five senators, little control over the student activities fee , and no freedom to discuss their processes. This is more or less the state of the ACSR at Tufts – a non-functioning advisory committee – and unless we pressuring the administration to change this, it's going to stay this way.

Doesn't the endowment belong to the school, not the students, faculty, or alumni?

While some people may believe that the endowment is a private institution's money to use however they please, the reality is more complicated. Universities rely on alumni to donate to the school's endowment, which in turn subsidizes our tuition, our research, and our salaries. Each one of us is intricately tied to the endowment in our daily lives, and our ability to demand access to information about the social impact of its use is an inherent right. Furthermore, the tax-exempt statuses that Tufts enjoys complicate further the idea of Tufts, or any other university, as a purely private institution. This is not a radical belief – rich and prestigious schools such as Harvard, Dartmouth, and Williams have endorsed this notion, opening up part or all of their investment portfolios and allowing their advisory committees to help direct their investment activities to sustainable and socially conscious efforts.

Isn't this unnecessarily politicizing the endowment?

Part of the fundamental truth behind the socially responsible investing (SRI) movement is that all investments are inherently political. We can either ignore the consequences of our investment decisions and focus on maximizing profits, or we can act in a socially responsible manner, as we do when we choose to eat organic or change to efficient light bulbs. Whether you're investing in a local farm or General Electric, your investment decisions carry the weight of intrinsically supporting their business practices, and it's important to know whether those practices are...

• environmentally sustainable

• respectful of the rights of women, labor, and indigenous peoples

• not supporting corrupt governments

• providing LGBTQ benefits to workers…

…The list goes on and on. Whatever issue you may care deeply about, the hundreds of millions of dollars that Tufts invests undoubtedly have an impact on it, and we want to make sure it is a positive one.

We're in the middle of a financial crisis! Shouldn't we leave this to professionals who can keep the money safe?

We want Tufts fiscally healthy and secure just as much as anyone else, and our proposals won't affect the bottom line. There are a number of different strategies and subcategories that fall under the umbrella of socially responsible investing, but for now, all we're asking for is a strong ACSR to advise and oversee shareholder engagement - simply fulfilling the rights and responsibilities our school has as a large institutional investor. Tufts holds immense power to vote on shareholder resolutions as well as to directly engage with the corporations it invests in. Taking full advantage of this power, with the help of the ACSR speaking for the community, will have no negative impact on our investment portfolio. Remember, even if Tufts wanted to play it extra safe and only allow to ACSR to advise them on matters concerning 10% of the endowment’s investments, that's still $100 million that could have a more positive social impact. No matter what economic climate, there's no "wrong time" to do this!

How can I learn more?

You can learn more by speaking with us one-on-one, emailing us at STIRupTufts@gmail.com, or finding our Facebook group. We have already posted (or will shortly) the op-ed articles we write on this blog also. In addition, you can check out these websites to learn more about the socially responsible investing (SRI) movement elsewhere:

SRI on Wikipedia
The Responsible Endowments Coalition

You can also come to our meetings!

How can I help?

Our goal is to convince the administration to give the ACSR the power, personnel, transparency, and support it needs to operate properly. To convince them to meet with us, however, we will need to show that we have the sympathy and support of the student body, faculty, graduate students, and alumni. There are an array of ways you can help us achieve our goals that aren't a significant time commitment: we need help with networking, publicity and awareness-raising, drafting proposals, putting together awareness events - however you'd be interested in helping out. If you're unable to donate your time, we'd still love to hear your input or ideas either one-on-one or part of a larger dialogue. We'd love to see you at our meetings – you can find their times and locations on our Facebook group or by emailing us. We're confident we can achieve our goals, but we can't do it without your support!

Tufts: Not the Dirty-Hippy, Tree-Hugging, Progressive School We All Pretend It Is

By Alex Marqusee

An edited version of this article appeared in the Tufts Daily on November 18, 2008.

I’ve heard the notion batted around that Tufts is an almost disturbingly progressive school, and in some respects it’s true. We, the student body, are committed to universal human rights and making this world a better place. We believe in a globally equitable response to the recent financial crisis. We are morally outraged at the international community’s relative silence on the rising violence in the Congo. We hate the scientists who hurt defenseless rabbits and chimpanzees, and we scoff at anything labeled “Conservative” (with the exception of those brave contrarians at Primary Source).

We as a student body are the do-gooders of the world. We are those nice guys and girls who volunteer at elementary schools, raise money for charities, and educate ourselves to go out there and be the greatest, most ethical leaders we can be.

But when it comes to how our endowment is run, our administration doesn’t follow the ethos they preach to us.

I’d like to believe that the Tufts endowment doesn’t own anything it shouldn’t. I’d like to believe that we don’t support the companies that destroy communities and wreak environmental devastation. But after hearing the story of a few students who tried to reassure themselves of the same thing, I just don’t know.

In the midst of the anti-Iraq war movement, a concerned group of students approached the administration with a simple question: are we investing in companies that are involved in war profiteering? Their original question then morphed into a broader, progressive movement to make the one and a half billion dollar endowment more transparent and socially responsible. After battling through bureaucracy, they succeeded in forming an Advisory Committee on Shareholder Responsibility (ACSR), composed of faculty members, administrators, graduate students, and undergraduates. Together, through research and oversight, they would make sure that the Tufts’ actions match its rhetoric.

After the Fall of 2007, these students came back ready to participate in the committee whose powers were modest at best. The Tufts endowment would remain closed to the public but this advisory committee would be able to make recommendations about proposing and voting on proxy resolutions at companies that Tufts had invested in.

These proxy resolutions work about the same as political referendums during election season. So, for instance, if you were registered in California this election you could have voted to ban gay marriage, and if you lived in Massachusetts you could have voted to decriminalize marijuana. To extend the analogy, if Tufts were invested in an oil company, we could vote on a resolution asking "should we invest in renewable energy technology, or just drill baby drill?" If Tufts abstains, however, its as if we don’t care. We are just trying to make sure we make a tidy return off of owning part of the company.

Upon their return, these brave souls were told that the full committee would not be allowed to continue as previously promised. Tufts’ reasoning for not wanting a committee to vote on proxy resolutions, and even more so for not wanting an open endowment, is either institutional laziness, incompetence or more likely a fear that outside “meddling” in the endowment could hurt the endowment’s profits.

Students at Tufts for Responsible Investment (STIR) believes that the actions of the administration and the endowment are part and parcel of who we are as a community. We believe that socially responsible investing is something worth believing in as a possible balance to pure profit maximizing. We believe that the people who run Tufts are capable and compassionate enough to be able to balance the University’s needs for a bigger endowment with its self-stated moral obligation to “contribute to the advancement of humanity and improvement of today's global community and environment”.

Would STIR’s proposal to resuscitate the advisory committee bring financial ruin to the University? No. The currently proposed committee would vote on resolutions that the companies themselves define as irrelevant to profit margins. The committee would say yes to investments in alternative energy, would say yes to better working conditions, would say yes to whatever the Tufts community decides through democratic representation is best for Tufts and the world.

Having endowments act as socially responsible investors has worked before and more and more colleges and universities are recognizing their moral imperative to do what they can to make the world a better place. Schools with endowments large and small are embracing the idea of socially responsible investing without loosing money because of it. Swarthmore, Williams, Columbia, the University of Pennsylvania and that archetype of irresponsibility and foolishness, Harvard, have all responded to student initiatives and are taking steps to use their endowments more responsibly.

Our beloved President Larry Bacow, in every matriculation address he has given at our school, has emphasized that Tufts is a progressive institution and that we, the student body, have a responsibility to be active citizens in making the world a better place. Well Bacow, here we are being active citizens and demanding that Tufts does more.

I was inspired last year when I heard you tell the graduating seniors, “The world desperately needs people who are willing to think beyond the narrow confines of their own self-interest.” I’d like to think most of students have heeded your call, but has Tufts?


Alex Marqusee is a Senior, an Economics Major, and a member of Students at Tufts for Investment Responsibility (STIR).

Jumbo Invests, But Responsibly?

Two years ago, our school was the backdrop of a heartwarming story of a dedicated freshman with an idealistic dream of human rights advocacy, who followed through on his plan of action and achieved his goal with enough hard work and charisma.

This freshman, who had joined the ranks of the Tufts anti-war movement early on in his first year, began to ask difficult questions about the injustices of war profiteering, and how such a troubling but distant issue could have touched our pristine campus here on the other side of the world. When he and other curious students realized that the university’s finances were closed books, these concerned undergraduates met with the director of the endowment’s investments, and then the president himself, and finally made a presentation to the Board of Trustees. By this time, these students had become very concerned with the lack of disclosure that the administration was giving, and they politely but forcefully made their wishes known. They wanted Tufts’ investment portfolio to be opened up to scrutiny and reflection, and and an advisory committee of faculty, administrators, graduate students, and undergraduates to serve as a mouthpiece of the Tufts community that would help draft input on how to invest the endowment responsibly by voting on shareholders’ proxy resolutions.

Luckily, everyone’s hard work paid off. The board agreed to create the committee, and our enterprising hero was put at the helm, with his wish to help steer the endowment’s investment down a socially just path finally realized. It was a storybook ending: intellectual curiosity manifested, active citizenship embodied, change realized.

Unfortunately for everyone, the fairytale has turned out to be much more Charles and Diana than Cinderella and Mr. Charming.

Fast forward to today: our hero is frustrated. Despite protests, the advisory committee is only three undergraduates, not the originally proposed full slate of faculty members, administrators, and graduate students, cutting off access to the community’s resources and crucial opportunities for dialogue with others. Worse, they have been placed under virtual gag order, forced to sign nondisclosure agreements forbidding them from discussing the institution’s financial activities—including who we’re invested in—with anyone else. Without democratic input from the Tufts community or educated opinions from faculty authorities, the committee is forced to struggle alone through the demanding research necessary to offer a moral voice to Tufts’ vote on shareholder proxy resolutions. They are cut off from the community they’re supposed to represent, but receive no support or communication from the administration either, who may or may not even be considering their input.

While a large portion of our community is still ignorant of this plight, some students, faculty, and others have already turned up a skeptical eyebrow based on what little they have heard. Some say the endowment shouldn’t be politicized, even though all investments in any business are intrinsically political actions. Others may think undergraduates should stay out of complex financial decisions, despite the fact that student movements at Columbia, Swarthmore, and many other schools have succeeded in influencing proxy voting and opening up investment portfolios. And of course, many fear for Tufts’ financial health in lieu of the credit crisis and spiraling stock markets, even though research has shown that making responsible investment decisions does not have to mean lower profit margins—not at all.

When I first heard this story, that of a well-intentioned, idealistic freshman organizer, now a marginalized, frustrated, and struggling junior trapped in bureaucracy, I felt my pride in Tufts flicker and fade somewhat. This frustration is not based in some radical, untenable agenda, but in the desire to bring about social, labor, environmental justice with the $1.5 billion our school is empowered with. Our mission statement—and yes, I believe this school, including its endowment, is truly and wholly a communal ours and not some foreign entity—speaks of “active citizenship,” “serving the common good,” and “a dedication to globalism.” The Students at Tufts for Investment Responsibility (STIR) think it’s about time that our institution started behaving the way it has always asked us to do. Stop obfuscating, and open up the endowment. Strengthen our advisory committee, and let it speak. We hope you will join us in our demands.

This article was published in the November 3, 2008 issue of the Tufts Observer.

Shame on Tufts for not investing openly and responsibly

Last week's Observer led with a two-page spread ("Brown and Blue Go Green," Sept. 29) patting Tufts on the back for all of the sustainable initiatives it is making in plain sight for all of us to see and feel good about.

For shining some light on the issue of sustainability, the author should be applauded; however, her article is just the latest illustrative example of a massive gap in our discourse on these matters. For all the money Tufts may be spending -- or saving -- in the name of the environment, we are once again ignoring a crucial issue: Is the university using our endowment responsibly, and if so, why the embarrassing lack of transparency?

Despite the interest our community has shown in shining a light on the university's endowment over the past two years, very little concrete progress has been made. Last year, the administration permitted the creation of the Advisory Committee on Shareholder Responsibility (ACSR), a committee intended to be representative of the Tufts community -- faculty, undergraduate students, graduate students, administrators and alumni -- to provide representative input into the proxy voting process.

Despite the wave of optimism this development originally generated, a year later, we find ourselves with little true progress having been made. The ACSR has been reduced from its ten original members from the Tufts community, including alumni, faculty and graduate students, to just three undergraduates lacking the support they need. These three remaining members have been forced to sign nondisclosure agreements, meaning that the rest of us are in the dark about decision-making and there is essentially no democratic process. Nobody knows if the ACSR's input is being taken seriously (if it's taken into account at all) or if it is truly representing the values of our university.

We can't expect change overnight, and we know a group of students can't run an investment portfolio as well as professionals can. But we also believe there's a middle ground we must find. We acknowledge that we can't shine a light on many of Tufts' financial activities purely due to the nature of the investments themselves -- mutual funds, for example, which the investors themselves often cannot view.

Furthermore, we should understand that there are abstract but important issues at stake in how one chooses to view the situation. While some students may be crying out for more transparency and oversight into the administration's finances, others may be skeptical of delving into the investment activities of an endowment they don't see as intrinsically theirs.

But despite these questions, and the murky nature of figuring out just how Tufts is investing the endowment behind tightly closed doors, there is a larger, clearer picture in front of us. The Responsible Endowment Coalition, a nonprofit advocacy group devoted to integrating universities' positive values with their investment practices, gave Tufts an "F" in investment transparency last year.

Many other schools -- including Columbia, Swarthmore, Williams and the University of Pennsylvania -- now have stronger oversight mechanisms to allow community access to, and in some cases, participation in, the investment decision-making and proxy voting process.

These successes, however, were only achieved after student movements raised awareness, started a dialogue and pushed hard on their administrations.

Undoubtedly, our financial system, as well as entire financial practices such as investment banking, is under siege right now, and many may see the maximization of profits in the "rainy days" ahead to be our primary goal.

But even President Bacow's e-mail on Monday, which warned that the current financial storm will undoubtedly affect our investment portfolio, financial aid and major projects, was nevertheless upbeat about the "cushion" of reserves we still possess following the most successful year of fundraising in Tufts history.

Now is not the time for us to throw up our hands; the economy may be faltering, but institutional investors such as Tufts still play a major role in the global economy, and how our endowment is invested can have an enormous impact on environmental sustainability, human rights, and the implementation of other ethical business practices. What we invest in, and how Tufts University uses its right as a shareholder to cast its proxy vote, can signal an implicit endorsement or rejection of whatever the university as a whole chooses to endorse or reject. It is a power we must use wisely and take seriously.

For all of these reasons, I'm proud to announce our newest student movement, Students at Tufts for Investment Responsibility (STIR). Keep your ears open in the coming days and weeks to hear more about STIR publicizing this issue; based on the administration's attitude, a protracted, forceful, campus-wide push may be the only way to convince the administration to take our concerns seriously. If you would like to get involved, I hope you will contact me to learn more about this issue and what each of us can do to resolve it.

For long enough, Tufts has been silent, dismissive and evasive while other schools have opened up their investment portfolios and treated the views of their communities with the respect and importance they deserve. President Bacow has stated that he does not want to "engage in social engineering through the endowment," but our own university has taught us better than that. Let us tell Tufts to put her money where her mouth is, because being a shareholder isn't just about maximizing profits, it's about wielding your influence in a smart and responsible way.

This article was published in the October 9, 2008 issue of the Tufts Daily.

TCU backs endowment advisory committee

The Tufts Community Union (TCU) Senate passed a resolution on April 6 endorsing the Advisory Committee on Shareholder Responsibility's (ACSR) quest for a greater role in overseeing the Board of Trustees' investment policies.

The resolution was submitted by advisory committee members Lorenzo Arroyo and Nicole Zeller, both juniors, and sophomore Gabe Frumkin. It calls on the Board to permit the ACSR to expand in size and scope by allowing for the inclusion of non-undergraduates on the committee and permitting members to disseminate information on the Board's activities to the greater university community.

Frumkin, the chairman, said the ACSR's three members wanted the Senate to pass the resolution to demonstrate that the student body supports the committee's goals.

"It would help show the Board of Trustees and the administration that this is not just a small group of students, but in fact that what we are trying to do with the ACSR is supported by the student government," Frumkin said. The resolution passed by a vote of 19 to three.

The resolution petitions the administration to remove a requirement forcing committee members to sign nondisclosure agreements.

Currently, the administration and the Board of Trustees require the three ACSR members to sign nondisclosure agreements, which prevent them from publicizing university investments to the greater Tufts community.

"At this time our policy continues to be that endowment investment decisions are the responsibility of the Trustee Investment Committee," Executive Vice President Patricia Campbell said in an e-mail.

"That committee has agreed to involve undergraduate students appointed by the TCU Senate in the proxy vote process," she added. This is the process by which the Board makes decisions on corporate policies, including investments.

The resolution also calls on the Board and the administration to permit the ACSR to include graduate students, faculty, staff and alumni. The committee originally hoped to include such members, and individuals from these demographics did participate in the committee during its early stages. But the Board clarified in February that the ACSR must include only three undergraduates.

Campbell said that she informed the Trustee Investment Subcommittee of the resolution's passage last week, but she said the administration has not adjusted its position.

The administration has called the ACSR a good "educational opportunity" for students, emphasizing the committee's role as an edifier for ACSR members rather than an opportunity for these three students to make the Board's investments more transparent to the rest of the university community.

TCU President Neil DiBiase said that the Senate endorsed the resolution to help the committee achieve

its goals.

"I think that the idea is really to let the committee function in the way that they described to us that it was created to function," said DiBiase, a junior.

DiBiase added that the Senate exists to help causes championed by the student body.

"I think that the Senate has an obligation to advocate for student needs and what students want," DiBiase said. "Our job is not to pass judgment on the needs of the student body."

Frumkin was pleasantly surprised by the Senate's support for the ACSR. "We had a much more favorable outcome in the votes than I anticipated," Frumkin said. "That just goes to show that there is even more support among the student body than I thought."

He said that the committee has not yet planned its next move, but that it will continue negotiations with the administration.

"We will continue to pursue greater transparency and greater democracy," Frumkin said.

This article was originally published in the April 15, 2008 issue of the Tufts Daily.

Tufts receives an 'F' in endowment transparency

Tufts is a leader in campus sustainability but is failing at public disclosure of its endowment investments, according to the Sustainable Endowments Institute.

The institute recently included these findings in report cards issued ato the colleges and universities with the hundred largest endowments in the nation. The report cards rated them on two areas: campus sustainability and endowment sustainability. These areas were further divided into seven categories.

Tufts received a B- as an overall grade. There was, however, a distinction between the marks given in the campus sustainability section and those relating to the endowment.

"Tufts is clearly at the forefront on campus sustainability," Executive Director of the Sustainable Endowments Institute Mark Orlowski told the Daily. As a reflection of this, Tufts got an A in the categories of "Administration, Food and Recycling" and "Climate and Energy Change" and a B in the "Green Building" category.

In the three categories devoted to the endowment, the only A Tufts received was in "Investment Priorities." In both "Endowment Transparency" and "Shareholder Engagement" the report gave Tufts an F, which significantly brought down the overall grade.

According to Orlowski, the F in the endowment was the result of Tufts not making public its records of where the endowment is invested.

The publication of this report coincides with the Tufts Coalition for Endowment Transparency and Democracy's requests for greater transparency, which culminated with a presentation last weekend in front of the Administration and Finance Committee of Tufts' Board of Trustees.

Through the presentation, the coalition called for the creation a committee that would give advice about votes on proxies from the companies of which Tufts has direct ownership.

The committee, as proposed, would contain representatives from various groups including students, faculty and staff members, administrators and alumni and would issue reports about the endowment.

Freshman Gabe Frumkin, a member of the coalition and the main presenter at the meeting, said that Tufts students, as beneficiaries of the endowment, have a right to know if Tufts is investing in companies that betray the spirit of the university.

Although the example that investments may be supporting the genocide in Sudan has been the most common one, Frumkin said it is only one of the group's concerns. "It's not our sole focus," he said.

More broadly, he said that Tufts should make sure its investments do not go against its commitment to social justice. "[Tufts] promotes social justice. It is a social justice university," he said.

Some feel that the endowment is not the proper place to promote such agendas.

"What I have a hard time with is people who want to engage in social engineering through the endowment," University President Lawrence Bacow said.

He said that Tufts is already highly committed to social justice through a variety of programs that have "far more influence than whether or not we vote a proxy statement one way or another."

Beyond the conceptual level, Bacow and Executive Vice President Steven Manos said that there are practical obstacles to complete transparency.

Only six of the schools surveyed by the institute received an A in "Endowment Transparency" and according to Manos even they are not completely transparent.

"Even for the endowments the [institute] rates as transparent, large portions aren't," Manos said.

One of the schools that got a higher rating is Dartmouth College, which according to Manos, only makes 30 percent of its endowment available for viewing.

He said the reason behind Tufts', and all other schools', lack of transparency is that the nature of the investments made does not facilitate public disclosure.

For instance, many schools invest in commingled funds, meaning that there are several investors. The schools then "don't control the investments," Manos said. Hedge funds, he said, are an example of this phenomenon.

If Tufts were to try to restrict the investments these commingled funds, Bacow said that the university could be dropped as a client.

"How much would you be willing to pay for transparency?" he asked.

According to Frumkin, though, the group is not calling for complete transparency and recognizes that there is a limit to what can be done without compromising Tufts' investment strategy.

He said that many schools, including Harvard, have some transparency and still "continue to see enviable returns" on their endowment investments.

Even if the group is not completely successful, Frumkin said that the process of gaining some transparency will be helpful.

"We will do what we can and we'll learn from it and that is all we're asking for," he said.

According to Manos, only four percent of Tufts' investments are made into funds that they control and therefore could make visible to the public.

Still, after a Trustee meeting last weekend, some additional transparency may be on the horizon.

Manos, who attended the meeting, was impressed with Frumkin's presentation and said that the group's recommendations will be considered. "[They] asked us to think about these issues," he said. "We'll be doing that."

This article was originally published in the February 20, 2007 issue of the Tufts Daily.

Contact us

Our email address is STIRupTufts@gmail.com, and we'd love to hear from you if you have any questions, comments, or want to get involved!