The Wesleyan Student Assembly (WSA) recently passed an endowment transparency resolution proposed by the Socially Responsible Investment Coalition (SRIC) which includes five major demands to increase the transparency of the University’s endowment. The first and primary demand is to renegotiate the contracts of independent fund managers hired by the University in order to require more information about the spending of University funds.
“Right now, there’s very little transparency to the broader Wesleyan community in terms of what our endowment is invested in,” SRIC member Eliana Theodorou ’12 said. “The resolution was mostly just asking for a list of companies that we were directly invested in.”
Similarly, the second and third demands specify that the University release a report including details of what these fund managers are doing with the University’s money. This report must have the manager’s name, the name of the firm at which the manager works, a list of the companies the manager has invested in, and the total amount of money the manager has invested in companies.
Additionally, the endowment transparency resolution asks that a chief investment officer make available a percentage breakdown of the University’s investments.
Lastly, the resolution requests that trustees initiate a clear dialogue with the WSA’s Committee on Investment Responsibility, which is made up of students, administrators, and community members.
“The committee is a WSA offshoot created to advise the trustees and to advise the investment offices,” said SRIC member Joshua Krugman ’14. “We want the trustees to really start taking what the committee says into account in their decisions.”
The SRIC insists that transparency in the University’s budget is important to ensure that the University’s investments reflect both the University’s stated priorities and those of the student body.
“Wesleyan’s endowment historically has been invested in things that aren’t in line with Wesleyan students’ values,” Theodorou said. “It’s not in accordance with what our classes teach us the world should be like, and it’s not in accordance with the image that Wesleyan presents.”
Krugman agreed that the University’s investments have not always matched the values the institution promotes.
“It’s a conflict of interest and a conflict of values,” Krugman said. “We’re asking them to make the investments transparent so that we do know what they’re doing with the money. Then we can have a discussion with them about how the money is being used.”
President Michael Roth suggested that students need to consider Wesleyan values and the University’s financial decisions as separate issues.
“I think our investment policy is really geared to protect the endowment and to have it grow, not to reflect our political, moral, and ethical values beyond investing,” Roth said. “We aren’t trying to use the investment policy as an expression of our values.”
Members of the SRIC, on the other hand, suggest that investing University money in causes that reflect the University’s values might encourage further alumni contributions.
“If people think the University is a force of good in the world, they’re more likely to give money to it,” Krugman said. “President Roth once was quoted as saying that the reason Wesleyan has less annual contributions than most schools, he suspects, is that Wesleyan alumni give their money to charities rather than to Wesleyan.”
Jeremy Keim-Shenk ’12, another member of the SRIC, also believes that alumni would support a transformation in University investment.
“Through investing in socially responsible companies, it would encourage more donations from alumni who are interested in donating to charities or organizations that align with their social values,” Keim-Shenk said.
Roth suggested that the proposal is largely impractical because of the investment managers the University hires.
“Wesleyan doesn’t invest directly,” Roth said. “We hire managers, and some of the managers quite understandably don’t advertise their strategy. They make a living by having a strategy that they don’t just give away. I would be disinclined to recommend to the board that we limit ourselves only to those who didn’t care about the intellectual property of their work.”
While Roth said he believed transparency is important, he indicated that he did not necessarily support making transparency the University’s primary concern.
“I think there’s a balance of intellectual property and of transparency,” Roth said. “We’ll try to be as transparent as possible about the things that we’re not required to be private about.”
The SRIC believes that the movement is not only practical but necessary, as reflected by its support within the WSA.
“The movement was passed with no votes in opposition,” Krugman said. “Only a few abstained due to conflicts of interest. We’re here, we’re ready for dialogue, and we’re ready to move forward to help the University invest in the most responsible and profitable areas possible.”
1 Comment
jack lee dean
Why not set up a manager to invest in socially responsible companies, and let him compete with the other managers doing it the “traditional” way? May the best man / woman win.