The Utility of a Socially Responsible Endowment

So, due to the efforts of Brandeis students who came before, a fraction of the University Endowment is mandated to be set aside for investing in Socially Responsible Investment. I think there’s a Union Committee or something kicking around that gets to take a look at it.

Why do we care? What is the utility of Brandeis investing in ethical companies?

Of course, there’s the psychic satisfaction of knowing that we’re not part owners of Raytheon or Halliburton, or suchlike. There’s the symbolic value of taking a stand. There’s the boost in stock price / market cap we might be bringing to small ethical companies that could use the boost.

Is that all we’re fighting for? Symbolism, feeling good about ourselves, and maybe boosting the stock price of a company by pennies?

There should be a utliity to investment that goes beyond our dollars. In fact, that’s the whole point.

Years ago, ther was a movement to ban Kraft foods from the shelves of the C-Store. No more Easy Mac. Why? Kraft was owned by Altria, the parent company/name name of Phillip Morris, the Tobacco Company. Now, cigarettes are inherently bad in that they kill people, but I think Phillip Morris was using really unethical practices to push cigs to children or something abroad. Really sick stuff that we thankfully outlawed in the US. In any case, the motion to ban Easy Mac came to a campus referendum. It lost by 17 votes or something tiny like that.

Turns out that the whole process was being closely watched by Kraft foods themselves! They were very worried about Brandeis – what if other colleges took up the cause, bringing attention to the company, maybe the media would pick it up, maybe it would turn into a cause celebre, whatever. Point is, they were scared of our potential. We have power here because Brandeis, like other Universities, functions as a sort of shining beacon on the hill of a better world. We have the potential for being famous, due to being on the campus of a (relatively) famous university. Fame is power.

The same principle applies here. The point of ethical investment is not the investment itselof. Rather, the point is to leverage the investment into power. Power to cajole/compete/compel others to do the same. We should be trumpeting our ethical endowment, not hiding it.

Now, endowment-wise, we’re no where where we should be. Even the function of CEER is circumscribed – they have to specifically ask Jean Eddy (?) about every possible firm, one at a time, complete with reports and so on. It’s not a very efficient system. And, of course, we don’t have endowment transparency.

But for the part of the endowment that’s already invested well (ie for “goodness sake”) – why are we not publicizing this more? That’s the whole point, after all.