The Corporation approved the creation of a social choice fund at its meeting last weekend, settling an issue that had been on the University's radar for at least three years. Donors will be able to earmark their money for the fund, which will remain separate from the regular endowment and will be invested in companies with strong environmental practices.
The Advisory Committee on Corporate Responsibility in Investment Policies, which advises the president on ethical issues related to the endowment, first proposed action toward socially responsible investing in February 2004, said Harold Ward, professor emeritus of environmental studies and chair of the ACCRI. But, he said, the Corporation's investment committee rejected the idea because it implied that the regular endowment was not socially responsible.
The support of President Ruth Simmons and the recommendations of the recently released report of the University Steering Committee on Slavery and Justice influenced the Corporation's decision to move forward with the fund, Ward said.
The slavery and justice committee recommended in its 107-page final report, released in October 2006, that the University "strengthen its commitment to socially responsible investment by expanding its holdings in socially responsible funds and offering facilities to donors who wish to ensure that their gifts are invested in such funds."
The fund will be invested in companies chosen based on their stated purposes and their records of environmental practices, Ward said.
After the Corporation did not act on the ACCRI's proposal in February 2004, a more developed recommendation to create a social choice fund was proposed again in the spring of 2005 but was rejected by the Corporation, which did not believe there was sufficient donor interest in the alternative investment option, Ward said. In response, the ACCRI generated a report that described how the University might profit from a social choice fund, Ward added.
"I think what we demonstrated is it's good to have a choice," he said.
Now that the fund has been created, Ward said he isn't sure how much success the social choice fund will have, or just how the University would use the new option to attract donations.
"It's really hard to know," he said. "It depends a lot on how it's marketed."
Officially, the social choice fund has been open since the Corporation's vote on Saturday, and some donations that had already come in earmarked for the fund have been directed toward it, Ward said. But he added that it was too early to know how much money was in the fund.
A social choice fund has long been supported by some students. The Undergraduate Council of Students unanimously passed a resolution endorsing the creation of the fund at its Feb. 21 general body meeting.
"Brown University is a progressive institution and should take a lead role among our peers in the fastest-growing investment industry in the United States," stated the resolution, which was authored by Lauren Kolodny '08, UCS Corporation liaison, and ACCRI member William Masket '07.
According to the UCS resolution, Hampshire, Williams, Vassar and Mount Holyoke colleges and Brandeis University have successfully created such funds. Brown is the first Ivy League school to have such a fund.
The Brown University Community Council, a University-wide representative forum of faculty, administrators and both undergraduate and graduate students, voted to support the creation of the fund in November.
According to a Feb. 24 University statement, the conditions and terms for the donations to the social choice fund will be set by the University's Advancement Office. The Investment Office will be responsible for evaluating and selecting possible funds and will monitor performance.
