VSA plans for socially responsible investing

Fabian Arzuaga Staff Writer

Vassar Student Association Treasurer Andy Caselli ’05 is working with the Finance Office to consider changing a socially responsible mutual fund in which Vassar is currently invested.

The goal of socially responsible investments is to generate a profitable return on initial investments. Also, the individual companies in the portfolio must to meet certain economic, social, and environmental standards of social accountability.

Although the specific fund represents just one percent of the roughly $650 million Vassar endowment, finance administrators consider the move an issue which should involve input of both students and administrators.

The SRI fund currently in question, acquired through Domini Social Investments, is largely comprised of Standard and Poor’s index of 500 stocks that are screened for certain social requirements.

According to the Domini website, they decide which securities are included in their portfolio by considering issues such as environmental impact, employee relations, diversity, corporate citizenship, safe and useful products, and non-U.S. impact. Domini vehemently excludes tobacco, alcohol and firearms manufacturers, major defense contractors, nuclear power plant companies, and the gambling industry from their portfolio options.

However, the problem for Vassar is not with the SRI aspect of the fund. Instead, the problem lies with the recent underperformance of Domini in generating substantial return for the College’s endowment.
“Because [Domini] has been such a loser, we should drop that fund,” said Caselli. “But we should pick another socially responsible fund [to replace it].”

“No one on the board is advocating taking a socially responsible fund out of the endowment. It simply is a question of ‘Is this the best choice or should we be looking at someone else?’” added Director of Investments and Capital Projects at Vassar’s Investment Office Steve Dahnert.

Vassar’s finance administrators do have a responsibility to generate capital for the endowment, but the social implications of the College’s investments are still taken into account.

“We reach a point where a philosophical question has to be asked: What should Vassar or the Vassar student body be advocating by way of social issues expressed through the [SRI] we choose?” said Dahnert.

While the Vassar community addresses the social implications of its investments, the main goal is still to sustain and expand the endowment.

“The real issue is the lack of return, but I think we are using this opportunity to get student input into the decision,” said Caselli. “Instead of picking the fund that has the highest performance, we are using the opportunity to take into account what students think is important.”

Student concerns will be addressed through the VSA. “My job is to get a consensus from the VSA board about what ideas they believe are important aspects of [SRI],” said Caselli. “It’s very difficult to accommodate [all] concerns when ultimately the goal is to grow the endowment responsibility, so we can provide for the things we need at Vassar.”

Socially responsible mutual funds are not the only aspect of SRI at Vassar. Every year, the Trustee Investor Responsibility Committee and the Student Investor Responsibility Committee, the latter made up of current Vassar students, convene to discuss the specific social implication's of a variety of Vassar's investments.

According to Dahnert, in recent years College President Fran Fergusson has written a letter to General Electric at a time when Vassar had been a shareholder, requesting that they be more forthcoming with information about their role in the alleged dumping of pollutants in the Hudson River.

“Vassar's social activism with respect to the endowment goes beyond the socially responsible funds,” said Dahnert. “We have also written letters to companies in our portfolios on issues we feel strongly about.”