University News

Social choice fund still holds only one donation

The minimum donation requirement continues to deter contributions from young alums

By
Senior Staff Writer

Since the creation of the University’s Social Choice Fund in 2007 — the first in the Ivy League — the fund has struggled with a lack of donations and poor investment returns. The fund, which invests in companies based on their active commitment to promoting social change, has seen only one donation — about $1.3 million in 2008, according to minutes from a meeting of the Advisory Committee on Corporate Responsibility in Investment Policies.

“It was an excellent idea,” said Dan MacCombie ’08, a member of ACCRIP. “But as of now it’s sort of stunted.”

 

Choosing social choice

Brown students advocated the creation of a social choice fund both in 2004 and 2005, but the Corporation — the University’s highest governing body — struck down the proposals over concern about donor interest, The Herald reported in 2007.

The Investment and Development Offices wanted reassurance that creating the fund would not detract from the rest of the endowment, said MacCombie, who became involved with ACCRIP first as a research assistant and then as a member.

Administrators were also concerned that the fund’s original title, “socially responsible fund,” implied that the University’s other investments were irresponsible, and the name was changed, MacCombie said.

Since ACCRIP already screens companies for social irresponsibility, the focus of the Social Choice Fund was on investing in companies that were “proactive” in social change, MacCombie said.

After the fund gained support from both the Undergraduate Council of Students and the Brown University Community Council, the Corporation approved the Social Choice Fund in 2007.

 

Social stagnation

MacCombie said student awareness about the fund was greater when it was first introduced, but that the minimum donation requirement of $25,000 has been a deterrent to the young donors that would be most interested in donating.

Harvard students who advocated for creating a similar fund — the Fair Harvard Fund — looked to other schools, including Brown, as examples when they proposed the idea to their university. Unlike Brown’s fund, the Fair Harvard Fund will not have a minimum donation requirement, said Eliza Nguyen, a Harvard junior and campus campaign coordinator for Responsible Investment at Harvard. The group, which includes students, alums and faculty members who address finance management at Harvard, pushed against such a minimum, she said.

ACCRIP, which has two undergraduate members, monitors the fund and the social responsibility of other University investments, but there is no student organization at Brown actively involved with the fund.

ACCRIP members discussed possible issues with the fund’s structure last semester, but with the committtee’s focus on divestment from coal companies and those who may be profiting from Israel’s presence in Palestine, it remains uncertain if changes to the fund will be considered in the near future, said Ian Trupin ’14, an ACCRIP member. The minimum donation requirement is a possible issue the committee will address, Trupin said.

 

Future funding 

Like many mutual funds in recent years, the Social Choice Fund has “not had a very good performance,” said Beppie Huidekoper, executive vice president for finance and administration. In the past few months, the Investment Office has started looking into hiring a different firm to manage the fund, but no definite decisions have been made, she said.

Most donors consider Brown’s overall investment strategy socially responsible, and those who cannot meet the donation minimum for the social choice fund can donate to specific institutions at Brown that meet their interests, she said.

The minimum donation requirement reflects the baseline figure required to establish a fund according to University policy, Huidekoper said.

Any changes to the fund’s structure would be up to the Development Office and the Corporation, she said.