The University has, currently and historically, invested in companies that violate environmental and labor laws, as well as human rights standards. From the divestment campaigns targeting Apartheid South Africa in the 1980s, to Sudan during the genocide in the mid 2000s, to the present day, students have been deeply troubled with the University’s investment policy and have fought to change it.
Since 2008, the University has invested in Arch Coal, a company that performs mountaintop removal and violates environmental laws. In 2011 alone, Arch Coal agreed to pay $6 million to settle suits brought by the EPA for water pollution violations. Additionally, the University owns 10 percent of the private equity fund comprising HEI, a hotel management company that has been cited for numerous labor law violations. HEI has either settled or been held liable for 32 separate complaints at just one of its hotels.
In other words, the endowment, which provides approximately 12 percent of the University’s revenue and funds programs from which we all directly benefit, is derived in part from investments in companies violating basic values and laws. It doesn’t have to be this way. Our peer Universities—Harvard, Princeton, and Yale, for example—have implemented investment policies that both provide substantial financial returns and mitigate the social and environmental harm caused by their endowments. These peer institutions have made strides while our University lags behind.
In light of these sentiments, last year, Students for Socially Responsible Investment (sSRI) went through formal channels to express policy concerns. In a student government referendum, 80 percent of voters said they supported implementing a socially responsible investment committee. A follow up meeting with President Zimmer, Chief Investment Officer Schmid, and representatives of sSRI failed to create one. Because the Administration did not take the referendum seriously, concerned students were forced to employ alternative means.
sSRI and (Future) Alumni For Endowment Accountability are now sponsoring a pledge to withhold donations to the Senior Class Gift (SCG) because we want to influence University investment policy. This pledge is an appropriate means of expressing concern and has a good chance of influencing decision makers. According to the SCG website, the Gift is the beginning of a lifelong tradition of annually supporting the U of C. It is linked directly to building a culture of donating among alumni, many of whose donations support the endowment. By withholding our donations, we hope to signal to decision makers how important this issue should be to them. Furthermore, the SCG website indicates that a gift enhances Chicago’s national reputation and college rankings (alumni donations are factored into U.S. News and World report college rankings). The symbolic and concrete importance of the gift means that those who have decision-making power will have to take notice in a way that they did not of the referendum.
While the Senior Class Gift does raise money for the College Fund, the typical sum raised would, if matched, amount to less than 0.01 percent of the University’s FY2011 operating account. Further, the budget for the SCG Committee tends to be about the same size as the unmatched gift itself. These facts show that withholding donations to SCG won’t hurt the University and also imply that the purpose of SCG is less to raise needed funds and more to foster a culture of giving. And while the SCG isn’t invested, alumni donations could be. Therefore, because the purpose of SCG is to send a message to students about the importance of giving as alums, pledging to withhold donations from the SCG is the most effective, measurable way to signal that how the University invests could impact how we give.
SCG in a vacuum is good—and I wish I felt like I could give. However, SCG is part of a bigger picture of how the University encourages donations and how it subsequently invests them. SCG is the first time they’re asking us to give. So, this is our first chance to say, “No, we love the U of C too much.” Our University is better than its investment policy, and we can’t donate until that policy reflects, in some way, the values of the people it represents.
Anasuya Kabad is a fourth-year in the College majoring in public policy studies.