Two weeks ago I opened up my email to find a message from a student at Smith. She had found my name through Responsible Endowments Coalition’s website and thought that I might have some information about one of Smith’s endowment managers, Investure. She was interested to learn more about socially responsible investment options available through Investure, of which both Middlebury and Smith are clients. Having worked with one such initiative for over a year now, I was able to share my experience with her, and she was able to apply it to her work at Smith.
This cross-campus connection made me think. Since Middlebury and Smith are both clients of the same fund managers, we are able to organize jointly in a new way. Traditionally, socially responsible investing has been understood to include divestment campaigns (such as those from South Africa and Darfur), proxy voting and filing shareholder resolutions. However, as more and more colleges are renouncing their direct holdings and instead outsourcing endowment management to off-site managers, such as Investure, some of these shareholder rights are lost. Some campus committees on Socially Responsible Investment have even dissolved because they were primarily set up to vote on proxies and no longer have that ability.
Here at Middlebury, a new kind of organizing has arisen in this proxy-voting vacuum. When Middlebury students realized that we were not going to be able to vote on shareholder resolutions anymore because Middlebury no longer directly held stock, we turned our efforts toward fund manager engagement. Over the past two years we have been able to meet in person with a representative from our primary fund manager and have participated in the establishment of Investure’s Sustainable Investment Initiative, a separately managed fund that is directed by careful guidelines focusing on sustainability and environmental impact. Both Dickinson College and the Rockefeller Brothers Foundation are also invested in this initiative.
While the establishment of the Sustainable Investments Initiative certainly signifies the great potential of manager engagement, we have also encountered many challenges. Working with endowment managers means interacting with people who are one step removed from our campus activities. Unlike our Board of Trustees and campus administration, they are not as familiar with the culture and operations of our campus community. In this process it has proven extremely important to maintain regular communication with our campus administration since they have more direct connections to our fund manager. This two-step communication process is a bit more tedious, but by no means impossible.
A second challenge is in the reporting process. Since our fund manager chooses the contents of the portfolio, it can be hard to learn exactly what the investments are. At Middlebury we are working on setting up a process where by we can have access to some level of transparency and create our own campus report of the Sustainable Investment Initiative. However, the confidential nature of the investing process makes this process difficult at times.
In the face of these challenges, I was especially excited when I read the email from the Smith student. I think each of these challenges could be addressed through cross-campus organizing of colleges who share endowment managers. Through collective engagement, we might have a greater voice with our fund managers. However, as I begin to explore this possibility, I realize that I am extremely naive as to the feasibility of this kind of organizing. I don’t know if other campus committees are interested in manager engagement, if committees know who their managers are, if managers and Boards of Trustees would be willing to facilitate the communication from committees to managers, or if we—as a national movement—have the capacity to facilitate these cross-campus connections. But I’d like to explore the idea. So please see this as an open invitation to dialogue and share your thoughts. Hopefully together we can shape a new and viable form of organizing that continues to further our work in socially responsible investing.