A Proposal for
 New Thinking on University Endowments and Community Investment

The Case of Greensboro, North Carolina
by Steve Flynn, Greensboro, North Carolina

Over half the children in Guilford County Schools live below the poverty line.  Nearly 50 percent of males of color are no longer in school after the age of 16.  Accordingly, our high schools then proudly champion ‘graduation rates’ of 100%.  Where do many of those young men end up?  Even those kids who do graduate and go on to college and graduate, where exactly are they going to find jobs?

We see the building of our city’s new prison taking shape downtown, we witness the decades long struggle between Greensboro’s police department and its citizenry east of Murrow Boulevard.  We know in our hearts where many of those young men are ending up, if we choose to listen.

Some of us wonder what institutions will step up and work toward community solutions in terms of sustainable economic development.

 Today I want to begin a discussion about Greensboro’s higher education institutions and how they can envision together becoming part of the community’s solution and not, as so many at the grassroots feel, part of the problem.

I’ve been a member of Greensboro’s higher education community, in various flavors, for nearly two decades. Having previously worked in international educational exchange that took me around the world, one comparative thing I’ve come to learn is that one of American culture’s truly unique and amazing things is the capacity of American college graduates to give back to their alma maters. As a city of colleges and universities, this wonderfully charitable spirit is alive and well
 here in Greensboro.

This is something that speaks well of us: our spirit of giving.

I attended the US Social Forum in Detroit a couple of weeks ago and learned of the Responsible Endowments Coalition (REC).  One of REC’s main goals is to teach and train college students to organize advocacy campaigns to harness small percentages of university endowment dollars for the purpose of local community investment.  In Detroit I gathered committed Greensboro students from North Carolina A&T, University of North Carolina at Greensboro, Guilford College and other local schools to meet with the REC people.  Those meetings in Detroit were 
transformative and I’m confident the student activists in our community’s Colleges and University’s will be moving the ball forward this coming year.

My own personal dog in this hunt is to begin similar conversations at the leadership level.  The students discussed above will no doubt soon begin pushing these new ideas and values from the bottom up among Greensboro schools (indeed, this has already begun). I would like to help nurture the conversation from the top down so that just maybe we can meet each other in the middle or somewhere on behalf of our community and the citizens of North Carolina.

If we’ve learned anything in at least the last couple years, it is that the world of Tom Wolf’s ‘Masters of the Universe’ and Oliver Stone’s Gordon Gecco have born strange fruit.  Previous truths about how assets and wealth are ‘made and accumulated’ are suddenly called into question.  As a global culture, it seems we are currently in search of new ideas for what economic development and sustainability
and knowledge production now mean.

I believe American Universities need a new paradigm as it relates to philanthropy and investment.  We are expert at and resource significantly our planned giving enterprises on our campuses.  Yet, our ‘expertise’ in terms of soliciting gifts goes only so far.  In terms of actual investment decisions by investment managers, we typically outsource such expertise to ‘outsiders’ such as Cambridge and Associates (in the case of University of North Carolina-Greensboro I believe).  The result?  However good or bad our endowment returns each year (and its moral and sustainable impacts) how much of our endowment income and investments are actually directly benefiting our own community?  I have no idea, since such information is not available in the opaque universe of endowment investing, but I would venture to say the answer might be none.

We are currently living in a world where assumed paradigmatic truths (which evolved over the last 30 or so years) about capitalism and high finance are now in question.  Universities trained and staffed the whiz kids on Wall Street and London that got us into this mess. Having trained them, universities assumed these whiz kids would do right by university endowments.  In the wreckage of 2008, where did that get us?

What do universities have to show for it?  Far more importantly, what are our local communities gaining when we outsource our own investment management?  I believe new thinking is the way of the world in the coming century and universities seeking relevance must change their approach.

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