Wesleyan’s Responsibly Invested Student Endowment Outperforms the Market

Written by Becky Weiss, Wesleyan Student Activist, REC Steering Committee Member

Wesleyan University’s student-controlled endowment, the first of its kind in the nation, proves that investing with a social conscience does not mean sacrificing returns. The endowment, which was started in October 2008 with $150,000, has weathered the financial crisis beautifully. It currently stands at $150,065.46 and has outperformed the S&P 500 by 25.5% during the period since the endowment’s creation.

Breaking essentially even during these tough times has been a challenge for most. The WSA is proud to attribute its success to its $50,000 investment in a socially responsible fund with the investment management firm PIMCO, which posted a 12% return and now stands at $56,058.76.

Another $50,000 was originally kept in a guaranteed cash vehicle but was recently transferred to a laddered set of share certificates with a local credit union, MiddConn. In addition to being a safe and reliable investment with reasonable return, the WSA chose to move its cash to MiddConn in order to support its local community of Middletown, CT.

The last $50,000 of the WSA’s initial investment is tied to the Wesleyan University endowment. This segment was the only portion of the WSA endowment’s portfolio to post a loss. Wesleyan recently formed a Committee for Investor Responsibility to vote its endowment’s proxy resolutions and to engage in other forms of shareholder activism. The committee is made up of students, faculty, staff, and alumnae.

The WSA endowment was created to eventually replace the Student Activities Fee with an annual draw. The Student Activities Fee is an annual fee paid by each student that funds all events, concerts, and student groups on Wesleyan’s campus. The revenue generated by the Student Activities Fee is managed exclusively by the students elected to serve on the WSA.

The outstanding performance of the WSA endowment shows that responsible investment can be a wonderful thing for your university. Through responsible investing, it is possible for your university to effect positive change in the world while also fattening its wallet. When taken together, these two arguments prove difficult to ignore.

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