While students face many uncertainties upon departure from the Purple Valley, there is one constant we can rely on for the rest of our lives: an annual letter from the College asking for money.
This spring, however, a number of students and alumni are thinking twice before they send their checks. Some students have begun to raise questions about the social implications of the Colleges investment policies, and this week established The 2000 Fund, a socially responsible investment alternative that is currently independent of the College. The Fund is intended for those who would like to give to Williams, but are uncomfortable with its investment practices.
Each year, the College’s Alumni Fund, which is not invested, raises approximately $6 million from alumni and parent donations, which helps to cover the operating costs of the school. Other contributions enter the Colleges approximately $1 billion endowment, which is invested by the Trustees. A percentage of the returns from investment of the endowment also contributes to the operating budget of the College.
Currently, the Trustees employ two management firms to invest the Colleges endowment. The Williams Alumni and Development web site states that “the primary objective of the endowment is to achieve the maximum total return over the long term” and that “there are currently no social based restrictions placed on the Colleges investment advisors.
College Treasurer Doug Phillips elaborated on this policy, saying, “It’s important to understand that Williams College does not try to maximize its profit, because it has no profit to maximize. Every dollar of college revenue goes toward the educational program of current of future students. The endowment portfolio, then, is not invested to maximize profit but to maximize benefit to future Williams students.”
Many students and alumni, however, have voiced concern over this investment policy.
Senior Jason Stanley, one of the student organizers of the 2000 Fund, stated, “I think it is somewhat disgraceful that an institution that claims to be shaping the leaders of tomorrow is not itself practicing the virtues it should be instilling. The Colleges argument that the benefits from profit maximization outweigh other social concerns is not one that should be left unexamined.”
A number of students, faculty, and alumni share this concern and would like to see the College provide an option for alumni donations to be invested in a “socially responsible” fund.
Joel Tolman ’98 said, “The idea of a separate endowment, specifically invested in a responsible manner, is a powerful one: it gives alumni the option of supporting the college without compromising their beliefs…and wouldn’t re-direct any of the current endowment in a way contrary to the wishes of past donor.”
According to Phillips, “The creation of a separate socially responsible investment (endowment) fund to receive new endowment gifts may not present a problem, and the College has not rejected the idea.” Students are currently pursuing this possibility with the Trustees and administration and are working on creating a specific proposal.
First-year Malin Pinsky, who is also an organizer of the 2000 fund, stated, “We created this fund to demonstrate the support among the College community for a socially responsible investment alternative.”
He added, “Our hope is that the College will create such an alternative within the endowment, using, as a starting point, money raised for The 2000 Fund.”
The organizers of this project have established a fund with the Equity Trust, Inc., a certified non-profit organization. Equity Trust will invest the money from The 2000 Fund in community development loan funds, which give low-interest loans for community projects in low-income communities. The Equity Trust will send the annual returns from this investment to Williams College; however, the College has the choice whether or not to accept them.
This investment alternative, emphasized Pinsky, is not necessarily the one students are urging the College to adopt.
The contract between the representatives of The 2000 Fund and the Equity Trust states that if and when the College provides an investment alternative that “avoids social harm and contributes to positive social change,” Equity Trust will transfer the principal to the College.
Heather Brutz ’02, another organizer of the project, said “There are a number of socially responsible alternatives that the College could invest in under these guidelines.”
Brutz added, “We are presenting a proposal this week to the Advisory Committee on Shareholder Responsibility, which will consider it and pass on recommendations to the Finance Committee of the Trustees. The Trustees will hopefully discuss it in their June 1 meeting.”
While the College is considering this, students are soliciting support in Baxter and over their web site, wso.williams.edu/orgs/2000fund.
They are asking students, faculty and alumni to show their support for this investment option by making monetary donations to The 2000 Fund or by signing written pledges.
Biniam Gebre ’00, another organizer of the fund, said, “The College has recognized its relationship and responsibility to society many times in the past; we trust that it will take the opportunity to do so again.”