ow often does the average Dartmouth student think about the College’s endowment? Probably not that often, if at all. But every student’s experience at Dartmouth, whether they realize it or not, is linked to the way the Endowment Fund is invested. Financial returns from the endowment investments are used to fund every facet of the College’s operations. Just by studying in Collis or checking out a library book or attending a class, we become beneficiaries of the Endowment Fund. But along with the benefits of the Endowment Fund come responsibilities, too. One-third of the fund is invested in publicly traded corporations, and as owners of these companies Dartmouth College and those who benefit from it become responsible for the actions of those companies throughout the world.

Since the ’80s, socially aware students at Dartmouth have understood the interrelations between our lives, the College’s investments, and injustices committed by corporations around the world. These students have campaigned for changes in investment policies that would make the Endowment Fund more socially responsible. In the mid ‘80s a student-led campaign resulted in the College’s divestment from all corporations that benefited from apartheid conditions in South Africa. In the early ‘90s another student campaign kept Dartmouth from investing in HydroQuebec, an energy company planning to build a large hydroelectric dam in Canada that would have flooded lands sacred to the native peoples of Quebec. In the late ‘90s students unsuccessfully campaigned for divestment from all tobacco companies.

Over the past two years a small group of students, informally called the Dartmouth Organization for Global Awareness (DOGA, for short) has been working with administrators to incorporate aspects of socially responsible investing into the policies that govern the investment of the Endowment Fund. Progress with the administration was slow at first, but as they realized that DOGA members weren’t the type of activists threatening to chain themselves to the front doors of Parkhurst, but rather the type interested in a genuine and respectful dialogue, administrators began to open up to the possibilities of socially responsible investing. At the same time as the administrators were starting to understand what the students were after, the students began to understand some of the constraints the administration faced.

Students in DOGA believed initially that divestment of companies that were deemed socially irresponsible was the best way that Dartmouth could become a socially responsible investor. DOGA started with this mindset primarily because all campaigns from the past had centered around the divestment of certain companies. The administration, however, was very hesitant to consider any divestment proposal. The Trustees of the College are mandated to preserve the financial stability of the school and divesting from a company based on social reasons would limit their ability to maximize returns.

An alternative was found in a concept that is as old as public corporations themselves: shareholder rights. When an individual or institution owns stock in a company it becomes a partial owner of that company. Along with partial ownership comes the opportunity to vote on and propose resolutions that impact how the company does business. For example, shareholders of Starbucks could propose or vote in favor of a resolution that would require Starbucks to purchase half of its coffee beans from a fair trade supplier. This allows activists to work from within a company to achieve social change. Today, DOGA is working towards implementing this method of socially responsible investing in Dartmouth’s investments.

The administration has also realized that this alternative meets the goals of everybody involved. In response, President Wright created an Advisory Committee that has been drafting recommendations for creating an infrastructure that will allow students to become involved in how the College votes on shareholder resolutions. This is an encouraging instance of student activists and administrators successfully cooperating with positive results. Look for the committee’s recommendations to be released in the fall and stay tuned to find out how to become involved in the process. w

s members of the Dartmouth community, we all share the responsibility for upholding the "Principles of Community." While many of us strive to live in accordance with these principles, it is not possible to do so unless Dartmouth as an institution models its own actions on these principles. Dartmouth does not operate according to the "Principles of Community" in its investing of the endowment fund.

In the fiscal year ’99, twenty percent of the college’s revenue came from returns on the endowment fund, recently valued at $2.49 billion. This revenue was used to partially cover the operating costs of the college including faculty salaries, building operation and maintenance, and student programming among many other costs. Simply by existing on the Dartmouth campus- attending class, using the libraries- community members are taking advantage of the endowment returns. If the "Principles of Community" are not considerations in college investment policy, then it becomes impossible for an individual to be a member of the Dartmouth community and also uphold these principles.

Currently the investment guidelines for the endowment as determined by the Trustee Investment Committee are to maximize growth while minimizing risk. However, there is a trustee committee that is charged with reviewing the social and public responsibility of the college’s investments: the Council on Investor Responsibility. In recent years, the council has positioned itself as a reactionary group, meeting only when confronted with a major social issue by concerned students. In the past, the council has met to discuss investments in corporations doing business in South Africa, investment in a hydroelectric dam in Quebec, and investments in the tobacco industry.

There are different ways that an institution can become a responsible investor. The first is by divesting from corporations that have been deemed socially irresponsible by the Dartmouth community. The second way is to invest in companies that seek to significantly improve our society and a third way is to use the college’s leverage as a shareholder to change the way in which socially irresponsible companies do business through active shareholder voting.

Opponents and skeptics of socially responsible investing have brought up many drawbacks to the concept. They claim that socially responsible investing will result in reduced rates of return which will either cause academic programs and facilities to deteriorate due to cuts in funding or cause an increase in tuition to maintain current funding levels. In addition, opponents are skeptical of the ability of the Dartmouth community to agree on what is socially irresponsible behavior. Opponents of socially responsible investing also doubt that divestment from companies will have any impact on society.

Recent research comparing rates of return in the S&P 500 of socially responsible vs. irresponsible companies shows that the socially responsible companies outperformed the socially irresponsible companies in 1 year, 5 year, and 10 year total returns to shareholders. Some schools already practice some degree of social responsibility: Vassar puts a percentage of its endowment into a socially responsible fund, and schools such as Stanford, University of Michigan, Harvard, University of Wisconsin, and Tufts have divested themselves of tobacco companies. None of these schools has weakened academically as a result of screening their investments.

While agreement on what constitutes social responsibility and social irresponsibility may be difficult to build amongst the Dartmouth community, that in it self is an unacceptable reason to ignore the issue. Throughout the history of the United States it has been difficult for people to agree on many social issues such as slavery, women’s rights, and segregation. However, through meaningful dialogue most people were able to come to an agreement on the issue.

If one sees an action, such as divestment, as a solitary act by only one institution, it is easy to understand why one might not think it would make any difference overall in society. However, if one sees this action as a part of a larger movement that will be inspired and spurred on by our actions, large-scale societal change becomes a real possibility. Apathy due to a perceived lack of effectiveness is a poor reason for inaction.

This final argument that divesting of companies won’t change society is also evidence of a common confusion between divestment and the larger scope of socially responsible investing. Many times people mistake socially responsible investing to mean only divestment from those companies that are socially irresponsible, while ignoring the other two components of socially responsible investing: positive screening for socially responsible companies, and shareholder activism. Divestment should be the last step of an institution trying to change the way that a company does business. Oftentimes institutions can have a greater effect on corporate behavior by using their leverage as shareholders than they can by divesting from a company. For instance, by sponsoring a shareholder resolution, Cornell was able to encourage the nation’s leading retailer of old growth rainforest wood, often poached from dwindling reserves in South America, to phase in certified wood grown in sustainable forests. In past efforts to achieve socially responsible investment policies, student action has been a key factor and the situation is no different this time around.

The most effective and constructive action to take now is to write a letter on behalf of yourself or a student organization to the Council on Investor Responsibility demanding fairly chosen student representation on the council, a regular meeting schedule, and a commitment to the three forms of socially responsible investing. Additionally, bring up this topic in class and with friends and start the dialogue that needs to occur within ourselves and our community.