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.
