New student group pushing transparency in endowment
Despite the improving national economy, Chancellor Mark Wrighton reported earlier this September that as of June 30, 2009, the market value of Washington University’s endowment, about $4.2 billion, is down by 30 percent from its peak value two years ago, and the University anticipates an annual deficit of $30 million through fiscal 2011 and beyond.
Exactly how the University receives and manages its endowment has remained largely out of view, prompting frustrated students to band together to form a new group called Washington University Students for Endowment Transparency (WUSET). The group is collaborating with Student Union to bring the issue of responsible and honest endowment investing to the forefront.
In 2007, the University formed a separate investment company called the Washington University Investment Management Company that manages all the endowment investments and reports to the board of trustees. Chief Investment Officer Kim Walker is the head of the company.
WUSET’s mission is to hold the University accountable for its investments and make sure that the investments uphold the values of the student body. Members of the group say the first step in doing this is to have the University disclose its endowment activities to the public.
“Whether [the University] is investing in an organic farm or, say, Boeing, investment decisions carry the weight of intrinsically supporting their business practices, and it’s important to know whether those practices are ethical or not,” said Molly Gott, sophomore and WUSET member.
A source of concern for WUSET is that many members of the board of trustees, which establishes policies for and oversees endowment investments, are also high-ranking officials of large corporations such as Boeing, Bank of America, Monsanto, Arch Coal, Ameren and Peabody Coal. Without endowment transparency, students have no way of knowing the extent to which the University is invested in the companies of the board members and any conflicts of interest that are present.
Additionally, WUSET hopes that endowment transparency will encourage the University to invest in companies that are committed to creating positive influences on society, such as renewable energy firms.
WUSET’s efforts have included several students attending a recent conference sponsored by the Responsible Endowments Coalition (REC) at the University of Pennsylvania to learn more about endowment transparency and socially responsible investing. The group plans to meet with Chief Investment Officer Kim Walker and work with the University administration to reach its goals.
Ideally, WUSET would like to realize a future where students, faculty and alumni can access financial records of the University’s endowment investments online. Some universities such as Columbia and Brown have already achieved such transparency through their Web sites.
A relatively young group, WUSET’s members hope to create a committee composed of students, faculty and school officials who would have institutionalized power and the ability to vote on matters pertaining to endowment investment. The committee would be responsible for investigating the various investments and making sure that they reflect the principles of the wider University community.
Members have attended an SU-sponsored town hall meeting with Chancellor Wrighton in which endowment investing was addressed.
“As a group of concerned students, we look forward to working with the administration in order to improve the global impact of our considerable investments, giving the University community yet another reason to be proud of our University,” Gott said.