The entire student body should care about the Amherst College endowment––whether you’re among the roughly 50 percent who receive financial aid, which averages annually around $30,000, or whether you’re in the half who would be paying closer to $75,000 per year for your education if its costs weren’t partially subsidized by the College. But you shouldn’t care about the endowment only because you’re its beneficiary; you should also care about how exactly that money is made.

First of all, endowments don’t just sit there––our endowment has nearly doubled over the past five years, from $860 million in 2002 to $1.66 billion in 2007. Nor do they grow on their own accord––money continually flows in from alumni giving, of course, but the bulk of endowment growth comes from returns on investments (largely equities and stocks). Nor would any of this happen at Amherst without the expert management of the endowment by the Office of the Treasurer, located across Route 116 on the second floor of College Hall. I’ll bet you didn’t know it existed. But for many of us, it is the reason we’re here.

Your gratitude, however, ought to be mixed with an element of concern regarding the social impact of the money that has been invested on your behalf. The traditional viewpoint is that the best investments are simply the most profitable ones, but there is a growing awareness that this mentality ignores the fact that the law does not regulate all social and environmental externalities of private business––and that it might be better to invest in a responsible company such as Whole Foods rather than a more profitable company such as Wal-Mart. But perhaps even more importantly, the owner of stock in a corporation has the right both to vote on “proxy” resolutions regarding the operation of the company and also to create resolutions for other shareholders to vote on. To be a responsible investor, one need not divest funds: Often the most effective route is to stimulate responsible business practices from within, a method that leaves the profitability of your returns unaffected.

Among colleges in the United States, there has been a growing trend to invest in socially responsible ways. For example, Amherst’s money managers claim to make a conscious effort to invest both ethically and profitably; however, in many ways, our College continues to lag behind the cutting edge in responsible endowment management. The key problem is that control over our endowment is largely locked away under the paternalistic wing of the Office of the Treasury and the Board of Trustees. Granted, they know a lot more about investment than most of us students ever will. And granted, that’s still where most of the decision-making power should remain. But in order to reflect the ethical concerns of the entire college community, there must be a greater degree of engagement of students, staff, faculty and alumni in dialogue and activism surrounding the College’s investment decisions.

First, there needs to be a greater degree of transparency, which can be achieved through publicly disclosing where exactly our money is invested and providing documentation of our proxy voting record. Portfolio information is currently available on request from the Office of the Treasurer, but it is neither widely publicized nor easily obtained electronically and, as such, it is insufficient to stimulate widespread campus dialogue around the issue. Second, there needs to be a greater degree of shareholder engagement––that is, the College must use its status as a shareholder to promote environmentally sustainable and socially responsible practices. Such a goal could be accomplished by the creation of a committee (composed of students, staff, faculty, alumni and trustees) to vote on and actively submit shareholder resolutions in order to ensure that new investments align with the campus’ ethical standards, and to divest funds from worst-offending companies.

A campus visit from Mark Orlowski, founder of the Sustainable Endowment Institute, sparked interest in the issue of responsible endowment management at the College. He explained why Amherst deserved its B- grade (now a B) on his organization’s “Sustainability Report Card,” an evaluation of environmental sustainability measures at the nation’s best-funded colleges and universities. According to Orlowski, our key shortcoming has been in the management of our endowment––incidentally, a category in which our competitors have been much more successful. For example, Swarthmore’s Committee on Socially Responsible Investing pursues shareholder advocacy by voting on all social issues, proxy resolutions and introducing its own shareholder resolutions to companies in which it is invested. At Williams, the Advisory Committee on Shareholder Responsibilities holds similar powers in addition to screening new investments. Middlebury, Carleton, Oberlin, Tufts, Pomona and numerous other peer institutions all stack up favorably against us in endowment responsibility.

Earlier this semester, the Green Amherst Project, of which this writer is a member, decided to get the ball rolling by taking the issue of environmentally sustainable endowment practices to President Marx. He agreed that our concerns are valid and promised to research the possibility and get back to us before the semester’s close. Since then, Amnesty International has expanded the initiative into a larger movement, with broader goals focusing on both social and environmental issues. The newly formed Amherst College Responsible Endowment Coalition, with membership hailing from numerous campus organizations, is planning a large-scale campaign to inform the campus community about the issue and to enlist student and faculty support.

The Board of Trustees has been receptive to our recommended measures of increased transparency and greater shareholder engagement, and has advised us to work with Treasurer Peter Shea to develop a concrete proposal. The Trustees also caution that perhaps more than three quarters of the school’s endowment is managed by larger funds, not invested directly in companies by the College itself––thus, for much of the endowment, opportunities for shareholder engagement are much more indirect.

However, with hundreds of millions of dollars invested directly, the College’s potential to make a significant positive impact on the world is still quite vast––it will simply require a few basic policy changes (such as transparency measures and the establishment of a “Responsible Endowment Committee”), as well as sustained dialogue in the campus community regarding how we can remain responsible shareholders. Not only would these reforms align with Amherst College’s mission, values and priorities, but they would also provide students with a real-world opportunity to become engaged in socially responsible investment, and would respond to the growing demand for endowment accountability in the media––all at little or no cost to the endowment’s profitability. Let’s not hesitate to make Amherst College a leader in socially and environmentally responsible endowment management.