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RESOURCES >> Case Study > Williams College
Case Study: The Williams Social Choice Fund
Excerpted from Investing
in Social Change: A Student Handbook
on Community Investment by Colleges and Universities
It took an intense two-year campaign, initiated
by students and eventually joined by faculty, staff, parents, and alumni, but,
in October of 2001, Williams College finally announced the creation of a socially
responsible investment fund, ten percent of which is committed to community
investments.
The initiative to bring socially responsible
investing to Williams began in the fall of 1999 when a
handful of students began researching the companies
in the
college‘s stock portfolio and became concerned at what they saw. One
of those students recalls:
“When we got the College to release its portfolio
of stock holdings, we saw that Williams had substantial investments
in Phillip Morris, GE, and other
companies with notoriously bad social and environmental behavior. We felt
that by holding such stock, the college was supporting the
activities of those corporations,
which in some cases meant advertising cigarettes to kids, producing military
weapons, and polluting the nearby Hudson and Housatonic Rivers with PCBs.
Discovering the contents of the portfolio made it clear to
us that Williams’ investments
were perhaps the most substantial and direct way in which the college was
involved in many of the social and environmental problems
that we were concerned about.”
But, in addition to
questioning the college‘s complicity in unsavory
components of the global economy, the students began raising
questions about what
responsibility Williams, as a very wealthy institution,
had to the depressed local community
of Northern Berkshire County and other communities like it. Thus, the
students made community investment a central component
of their campaign in spite
of significant resistance to it on the part of the college.
After a process of self-education and some outreach, the
students initiated conversations with the administration
and trustees. These meetings, however,
made it clear
that the college was not amenable to a wholesale change in its investment
policy. So the small group of students that had formed around this
issue came up with
the more modest proposal of creating a separate fund that would be
invested in a socially responsible manner (partly in screened
mutual funds and
partly in
community investments) and that would provide socially and environmentally
concerned alumni with the opportunity to have their gifts invested
in a way that was consistent
with their principles. Students presented this proposal to the college
in the Spring of 2000, but administrators made it clear that they were
not willing
to have a separately managed fund within the endowment.
Confronted
with this quite definitive no, the students eventually
decided that, instead of repeatedly asking the college to
do something it didn‘t
want to do, they would try a different tack. With only a few weeks
left in the school
year, students, with the help of Equity Trust, decided to create
their own independent fund outside of the college and collect
donations for
it from students, faculty,
parents, and alumni who supported the idea of a social investment
fund. The —2000
Fund“ would accept contributions and invest them in Equity
Trust‘s
community development loan fund. Equity Trust agreed to hold and
invest the 2000 Fund donations and send the returns from these investments
to Williams, while
keeping the fund‘s principal until the college agreed to create
its own socially responsible fund.
To advertise the 2000 Fund, students
wrote mass-emails to students and alumni, tabled in public spaces,
wrote columns in the college
paper, got an article
written about the fund in the local newspaper, and generally asked
people
to make donations
and write a letter or email of support to the college. Many of
the donations were small - often just the pocket change of
students -
but a few parents
and alumni made significant gifts to the fund. In the end, however,
it was not
the size of the fund (a mere $1,600), but the breadth of the support
(over 130 donors
and many more supportive letters and emails) and the sense that
the fund was —interfering“ with
the college‘s source of revenue that made the strategy effective.
While certain elements of the college administration were angry
with this move, they
eventually agreed to negotiate with the students. The independent
fund had given the students a kind of leverage that they had not
had before. It was no longer
the students saying, —we want you to do this,“ it was
the students now saying, —we‘re doing this, how are
you going to respond.“ Faced
with a new alternative fund that threatened to draw away support
from the college‘s
usual fundraising - and a group of students committed to keeping
it there for however long it might take - the college decided to
come back to the negotiating
table.
This led to a series of meetings over the next year between
students, the finance committee of the trustees, the president,
and the treasurer.
The
finance committee
in particular remained very resistant to the proposal - and especially
to the community investment part. At one point, they indicated
that they might
be
willing to create an alternative fund that would be invested
solely in socially screened
stocks. While this was a tempting offer after a year and a half
of work, the students refused to compromise, deciding that community
investment was crucial
to the principles and concerns motivating the project.
In the
Spring of 2001, the students launched another organizing
effort. First, they put together a panel on socially responsible
investing
that included
a community investment practitioner as well as managers at
socially screened mutual funds
and an economics professor. Following this, they started a
campaign to get petition signatures and pledges of financial
support to
the 2000
Fund or
an
equivalent
fund if it were institutionalized at Williams. Over three hundred
people signed pledges, which were then presented to the trustees
along with
the fund proposal
at a meeting with students just a few days before graduation.
By the time the meeting came, the students had found an important
ally in
the college
treasurer
and had got the college‘s new president to support their
effort, at least in principle. At the meeting itself, the finance
committee of the trustees seemed
to consider the proposal more seriously than they had in the
past, but, in the end, the organizers left - and some graduated
-without an answer.
Over the course of that summer, students
continued working with the college treasurer who helped them
amend the proposal
in a
way that
addressed
some of the lingering
concerns of the trustees without undermining the students‘ goals.
The treasurer was then able to get the proposal on the agenda
of the board‘s Fall meeting
in October of 2001. Finally, at that Fall meeting, after
two years of outreach and fundraising, hundreds of petition
signatures,
donations and pledges, dozens
of letters from supportive alumni and students, and multiple
rounds of negotiation, the Finance Committee of the Trustees
approved the idea and agreed to create
the Social Choice Fund at Williams.
The bulk of the Social
Choice Fund is invested in a socially screened mutual fund
that excludes corporations responsible
for environmental
degradation,
human rights abuses, weapons manufacturing, discriminatory
employment practices, unsafe
working conditions, exploitative treatment of indigenous
peoples, animal cruelty, or the production of harmful products
such
as tobacco. When
the fund grows
to a certain size, ten percent will be invested with Community
Development Financial
Institutions to provide loans to projects responding to
the needs of low-income communities. For these community
investments,
priority
will
be given to
projects in the Berkshire region where Williams is located.
Reflecting on the College‘s decision, Becky Sanborn,
one of the student leaders, says, —Williams College
and countless other academic institutions across the country
already contribute greatly to society by educating future
leaders and responsible citizens. The creation of the Social
Choice Fund is an
important step for Williams as it works to become a responsible
citizen itself.“
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