Archive for November, 2012

ENDOWMENT 101 Disappoints

Last night was the Endowment 101 Forum in Chapman hall. Chancellor Thorp and three other representatives held an open conference and lecture with students about what the endowment it, what it pays for, and how it is invested. While these individuals were more than happy to let students know what endowment money is used for, they were more reluctant to let students and various reporters know how that money is invested. But let’s start with a recap of what we learned at this endowment conference, from various powerpoint slides that the administration kindly put together for us.

“What are endowment funds?

-restricted gifts received from donors

-principal not expendable

-invested in perpetuity with an annual spending distribution to support the designated program”

This fund is a whopping 2.14 billion dollars. The 29th highest amount amongst all universities, and the 7th amongst public universities. This money received from donors to the school is invested in various stocks and bonds in different companies in order to earn income off of it. That income is then given to the programs which the donors are aiming to benefit. The overall objective which the panel repeated without fail is to preserve the real purchasing power of the endowment fund. Here’s the kicker though, with all this investing going on, the administration has found it too difficult to manage their stocks by themselves. They’ve hired UNC Management Company and over 100 different management firms to do this for them. This means, according to them, that “90% of the investment fund’s assets are invested in commingled funds”. They also stated that they have no control over this 90% once it is given to the management companies.

So what does this mean? It means that people managing the portfolio at UNC have no control over where 90% of their money is going, or what companies it is supporting. The question began being raised by the audience over what this means we’re investing in. Are our investments socially responsible? Are these management companies screening their investments to ensure this? The answer was a blatant no. The panel made it clear that their only objective in investing these funds was to ensure their purchasing power in the market place. Therefore, they made it blatantly clear that money mattered more to them than their conscious, or what is morally right.  They, of course, could not outline exactly which companies they invest in, and how many investments they have in each, arguing that this would be a breach of confidentiality agreements and that “no large university endowments are that transparent”.

When asked whether there are any restrictions on investments, the panel only seemed concerned again about making money, and preventing scandal. It was stated that “we’re not gonna do things that are gonna be irresponsible”; what, like investing in the fossil fuel industry, ruining the planet, causing immense health problems? No, they certainly contribute that. Chancellor Thorp even openly stated this, saying that he did not want to hide this fact from students. The Chancellor did state that “climate change is real and is caused by humans”, but then looked entirely hypocritical when he gave no interest to environmental ideas and solutions. When asked about divestment to solve this problem, the room was tense. The panel seemed unable, if not simply unwilling to make the effort to divest. They stated that “we would have to divest the whole endowment” and that the circumstances for divestment would have to “be pretty extraordinary. Divestment campaigns were called “hypocritical” in this light. On this sour note, the question was presented “Is there a possibility to have student input when money gets invested then?”. The answer to this was the most belittling and frustrating of the evening as Chancellor Thorp said: “We don’t need a student getting yelled at” if our investments don’t make money; “that’s not a good idea”. The only solution the panel seemed to be able to even comprehend was one of investing in more clean energy, but keeping our investments in the fossil fuel industry.

In short, the entire Beyond Coal campaign was spit on by the administration last night. Questions about divestment were wholly shot down. The administration had mixed comments on student involvement, stating that they wanted no student input, and then later stating that “we need to get together and figure out a way to move forward”. They seemed entirely uninterested in the socially responsible nature of their investments, and seemed to belittle the students who showed such earnest enthusiasm to the issue. Chancellor Thorp seemed to think he had given into enough student campaigns to effect change, and that he didn’t need to yield any more than he had. Everyone in the room, bar the panel, seemed to want to continue the conversation, and seemed upset and frustrated with the information presented to them in the endowment forum. The administration doesn’t want to effect change because they are making too much money, and it is easier for them to continue in socially harmful and irresponsible ways than to do something about it. We cannot truly call ourselves a sustainable and environmentally conscious university when we invest millions of dollars in an energy source that is destroying the planet, and our children’s futures. We will not stop our campaign in response to this. I think this was one of the administration’s aims. If anything, we are more fired up than ever. We will simply have to get more creative. As Jasmine Ruddy said last night, “Time to push the envelope”.

 

-Tara Nattress

November 29, 2012 at 7:38 pm 3 comments


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