Like most selective private colleges, Vassar College relies on an endowment to support its annual budget. Our endowment—valued at about $750 million—is a long-term investment fund that supports the College’s many activities, from teaching to research to financial aid.
Funds have come from the generous gifts of Vassar’s alumnae/i and friends over the past 150 years, and are invested in such a way that they can provide for annual spending and also sustain their value over time.
As an investor, Vassar is remarkable for two reasons: First, we’re big. We have a very large amount of money to invest. Second, we’re in the market for the long term. We invest with the assumption that the College will exist in perpetuity. We’re not a fly-by-night investor hoping to turn profits in a hurry.
While the yield on our investments is essential to Vassar’s ability to educate its students, the College also takes on the responsibility of monitoring its investments to be sure that the conduct of companies whose stock is owned directly by Vassar does not violate the College’s own policies. For example, through voting company proxies on social issues, we are able to press companies to make progressive and responsible choices that are in keeping with the values we espouse as an educational institution.
How does Vassar do this? The Campus Investor Responsibility Committee (CIRC)—the most fascinating committee you’ve probably never heard of—makes recommendations to the Investment Responsibility Committee of the Board of Trustees on proxy voting and on issues that arise on campus that might affect our investment policies.
CIRC has 10 members, including four Vassar Student Association-elected students, two alumni, two faculty members and two administrators. Rachel Kitzinger, professor of classics and dean of planning and academic affairs, serves as the chair. The Committee is a really unique space on campus, where history, geography, economics, political science and environmental science truly come alive.
So what does CIRC actually do? The Committee’s primary role is to carefully study proxy resolutions for American companies in which the College holds publicly traded shares. Proxy resolutions are formal resolutions written by investors. If the resolutions pass scrutiny by the Securities and Exchange Commission and are passed by a vote of the majority of shareholders, the corporation will enact the policies requested in the resolution. Resolutions that CIRC discusses involve issues of social and political significance—for example, requesting companies to report on plans to reduce carbon emissions or publish political contributions or raise labor standards. Proxy voting provides a valuable opportunity for investors to pressure companies to weigh issues of social importance as they also fulfill their responsibilities to their shareholders to ensure profitability.
Committee members diligently research the topics and context for resolutions, and then engage in incredibly lively debate about the proper course of action. Let’s look at a couple examples of the types of resolutions that CIRC considered recently.
At our meeting last week, we voted unanimously that ConocoPhillips (an international energy company) should add gender identity to its nondiscrimination policy. Why did we vote in favor of this? Because Vassar itself includes gender identity and gender expression in its own nondiscrimination policy. Ideally, of course, we believe that the companies in which we invest should share our values, especially regarding issues of inclusion.
Here’s another, more involved example. We considered a resolution for Wells Fargo (a large bank) to release the names of the trade associations that it financially supports. (Trade associations are organizations that connect businesses within a certain industry. While they are not political organizations themselves, they often participate in political lobbying, advertising and fundraising.) The Committee recognized that Wells Fargo already has a high bar for transparency about contributions, and actually prohibits contributions directly to political candidates or parties. But this resolution was focused specifically on requiring the company to report the membership in trade associations, which the company does not currently do.
One of the students, a political science major, immediately brought up the Supreme Court’s recent Citizen’s United v. FEC ruling. If the Court wants to treat corporations as human entities with freedom to “speak” through political funding, Committee members asserted, then investors have the right to know exactly where that funding is going. So, despite Wells Fargo’s generally good record, we felt it was appropriate to ask them to reveal their membership in and contributions to trade associations. The vote was 8-1 in favor of the resolution. (The opposing vote was cast in the belief that revealing membership in trade associations whose policies conflict with Wells Fargo’s may damage the company.)
Beyond making recommendations to the Trustees on how the College should vote on specific resolutions, CIRC also advises the College on the desirability of disclosing information regarding Vassar’s portfolio, as well as divestment from corporations that could be deemed inconsistent with Vassar’s mission and values. A few years ago, for example, Vassar divested from certain companies operating in the Sudan because of the horrific genocide in Darfur. CIRC also recently considered a request from students to recommend a divestment policy in Coca-Cola to the Trustees.
In short, we often hear the cacophony of complaints that liberal arts education is wholly separate from real-world issues or problem solving. These grumbles—expressed with an uncertain blend of sarcasm and fear—often arise from worried liberal arts students and their even-more-worried parents.
But in our Vassar experience, CIRC offers perhaps the most direct link between the abstract theories learned in the classroom and the concrete realities of life outside the ivory tower. At its best, Vassar imbues its students with the radical curiosity and intellectual verve to lead principled lives of consequence. We should do this as students, as investors and as human beings.
Have questions about Vassar’s investments? Have questions about the work of CIRC and how we decide on proxy resolutions? Please get in touch with the student representatives on the Committee—Brian Farkas ’10, Daniel Savage ’10, Louise Conner ’11 and Arjun Agarwala ’10 at vsaoperations@vassar.edu. The Committee will hold a meeting on April 30 with a member of the Responsible Endowments Coalition, a group that brings together committees like CIRC from many campuses to discuss issues of mutual interest. If you are interested in the work of the Committee or curious about issues of socially responsible investment, please come and join the discussion.
—Brian Farkas ’10 is VSA Vice President for Operations. Rachel Kitzinger is the Dean of Planning and Academic Affairs and Matthew Vassar Jr. Professor of Classics.
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