Increase endowment transparency by providing choice

A group of University administrators, students, donors and managers of UNC’s endowment fund should focus on increasing transparency within the endowment fund at Wednesday’s “Endowment 101 Forum.”

A variety of student groups are calling for more responsible investment. Some groups call for divestment from coal, some call for divestment from all fossil fuels and some want to enable donors to have more say in the exact nature of their investments.

What unites all the students is the common desire to increase transparency and foster dialogue surrounding UNC’s endowment fund.

Therefore, participants in the “Endowment 101 Forum” Wednesday should use the opportunity of this long-awaited meeting to push for increased transparency in the portfolio.

Asking UNC administrators and the UNC Management Company — the private company that manages the University’s endowment — to divest entirely from fossil fuels and from coal is a worthy cause.

Proponents of coal divestment contend that returns from coal-related investments aren’t worth the costs. The financial upside from coal-related investment isn’t exceptional and doesn’t outweigh the environmental damage of coal use.

However, tomorrow’s political issues and sensibilities might not be the same as those of today.

Therefore, a call for a specific divestment might not be the most effective long-term solution, as it is only a one-time call for change.

A more sustainable, long-term solution would be to alter the structure behind the endowment fund to incorporate more donor input.

In order to open up the dialogue about responsible investment, donors should be able to choose which parts of the portfolio — mutual fund, stock or other security — they want their money in.

While UNC Management Company is a private entity, and is thus not required to be transparent about its holdings, the University should follow the lead of other institutions such as Georgetown University and Brown University, which are transparent about their endowments, even though their endowments are private.

The endowment is composed of privately donated funds, which are then invested. The money from the endowment is used to fund scholarships and faculty positions.

In recent years, as tuition has climbed ever higher, endowment-funded scholarships have come under increasing scrutiny.

The way UNC manages and invests its endowment — $2.2 billion as of last year — raises a lot of debate, as it touches upon issues of ethical investing and social responsibility.

In the past, UNC has successfully divested from South Africa during apartheid and from Sudan during the genocide in order to uphold principles of investor responsibility. UNC should continue this type of ethical practice by opening its books and giving donors choices.

The environmental affairs committee of student government is organizing the forum to bring together various voices across campus with donors and the individuals in charge of managing UNC’s endowment fund from UNC Management Company on Wednesday at 7 p.m., in Chapman 201.