By Daniel MacCombie

Submitted Spring 2008

Brown University stands out in a number of ways–some obvious, some not so much: Grades optional. A name synonymous with a color. No distribution requirements. But my favorite? It’s the only university in the Ivy League with an opt-in sustainable endowment fund, and students put it there.

Brown's leadership as a progressive and proactive university plays out on campus and in academia, and students have made sure that it also extends to the world of investment. Brown's Advisory Committee on Corporate Responsibility in Investment Practices or ACCRIP (recently certified as the longest acronym in the history of university sustainable investment committees) is a key part of ensuring that Brown’s investments are in line with our social mission. I’m a member of the ACCRIP, and we've taken an active role in the social management of Brown's endowment in the following ways:

• Proxy Voting. Like a number of other universities, Brown actively examines its proxy votes and analyzes them based on a solid set of voting guidelines.

• Divestment. Brown divested from over a dozen companies that are shown to provide "greater material support to the Sudanese government than to the Sudanese people" and is considering doing the same with Burma.

• Climate Change. Brown has taken an active interest in mitigating climate change, and the ACCRIP recently voted unanimously to ask the University to join the Investor's Network on Climate Risk.

• (Drumroll, please)...The Social Choice Fund. After over two years of work by the ACCRIP and concerned students, the Corporation of Brown University decided to enact the Social Choice Fund (SCF) to invest in environmentally-focused mutual funds that proactively screen for best practices.

How did we make the SCF happen? We focused in three key areas:

Perception. The ACCRIP had to put forward a proposal for the SCF three times. Because we originally called our proposal the “Social Responsibility Fund,” the Corporation (basically, the board of trustees) was concerned that creating such a fund would "imply that the rest of the University's funds are invested in an irresponsible manner."   Secondly, the Corporation (sounds rather Orwellian when you repeat it this many times, no?) misunderstood the word “responsible” as a judgment on the ethics of the fund managers, not the companies in which Brown was investing. We found that a simple change of the word "responsibility" to "choice" made a huge difference.

Support. The ACCRIP alone was not able to convince the Corporation to create the SCF. We needed support from several sectors of the school community.

•    Over 600 students, alumnae, parents, and faculty signed a paper petition supporting the SCF. We created the paper petition in response to criticism that an online petition was "too easy.”

•    Brown has its own "community council," composed of faculty, students, and the President. The President (who is more popular on campus than almost any other figure) was already on board with our plan, but having her (powerless in terms of policy but relatively significant in terms of rhetorical value) voice on our side was ultimately very helpful.

•     Having the support of the administration was also a key factor in the passage of the SCF.

For anyone else out there trying to get such a fund created, before you get grassroots support, go to the top first. If you explain it to them in the right way, they might be more on your side than you think.

Dedication. A key worry on the part of the Corporation was that the fund would be ignored by the people who pushed for it. They didn’t need to worry: the ACCRIP has stayed actively involved, as has the Investment Office. A system of continued support wherein students who care about the fund stay involved in its management even after the proposal passes is so valuable.

And yes, we got the fund. However, there is still one little problem:

Reality. No one has invested in the fund yet.

Why?  It has a minimum $25,000 investment.

Why?  Because the development office is worried that if the minimum investment were lower, it would take away key support for the Annual Fund.

One of the major arguments we used in getting the fund passed was that despite the (mis)perception of investment professionals within the Corporation that SRI funds perform poorly, the SCF would ultimately bring in more money to the University by attracting new donors who would not give to Brown otherwise. A $25,000 minimum shuts out most of those new donors.

We are currently trying to convince Brown to change this policy. A group of alumnae are pressuring the University to change the policy through a letter campaign. A number of other policies could be implemented but the one I really like (pat on the back here) is allowing smaller donations as long as they are matched with donations to the annual fund.

So as easy as this sounds, it's rather hard to work with a governing body of mostly wealthy investors. They care a lot about Brown, they know what they're talking about, and they want to make sure their donations are put to good use. Of course, they are also among the biggest skeptics of responsible investment. Hopefully, the SCF and other SRI initiatives at Brown will succeed to serve as an example in our ongoing battle to win administrators and investors over to the beauty and potential of this tool for social responsibility. It’s only a matter of time.

Daniel J. MacCombie is the President of Brown ACLU, sits on the SSDP Board of Directors, and is the Director of Janus Forum Steering Committee.

A post-script added by REC—This case study was written in the spring of 2008. in the fall of 2008, however, 1.4 million dollars was put in the Social Choice Fund! We’ve left the case-study as-is to show that it took some time to get there, and highlight the lessons learned about how to structure a fund to ensure pesky minimums don’t get in the way.