Report Calls for Socially Conscious Investing by Colleges

With more than $400-billion in endowment assets at their disposal, America’s colleges are well positioned to invest in the financially struggling communities in which they may be located, according to a new report by two groups concerned with community development and social justice.

“Raising Student Voices: Student Action for University Community Investment,” a report by the Democracy Collaborative and the Responsible Endowments Coalition, asserts that everyone benefits when colleges invest in local businesses and sustainable economic development, and that students and community organizations should work together to push for more such alliances. Community-development credit unions, community banks, community loan funds, and community venture-capital funds are among the tools that colleges can use to infuse capital into their neighborhoods.

The researchers interviewed students, faculty members, administrators, members of community groups, and outside experts at 11 universities last year, and concluded that many colleges have been slow to invest in their communities for a variety of reasons.

“Universities frequently seem to stop short of anything they perceive as impacting their immediate return on investment, due in some degree to the embrace of a conservative investment model by university trustees and administrators,” the authors write. “Furthermore, the impact of the financial crisis on endowments has produced a sense of constrained resources, making institutions even more wary of anything other than maximizing returns.”

But the report finds plenty of examples of institutions that have engaged in community investment, often through “community-development financial institutions” that strive to help underserved local populations. Case Western Reserve University, Duke University, and the University of Pennsylvania are offered as examples of institutions where administrators led successful community-investing campaigns, while Fordham University, the University of Chicago, and Wesleyan University are examined as models of student-led efforts. The report also looks at universities where student-led campaigns could be built or expanded upon.

Among the authors’ recommendations are increasing alumni participation in student-led campaigns, teaming up with community-based organizations, and stimulating campaigns at “game changing” institutions, like Harvard and Stanford Universities, that could spur other colleges to follow suit.

John Wheeler, senior vice president for administration at Case Western, told the researchers that linking investments with service-learning curricula is another important way to persuade reluctant trustees and administrators to engage with their communities because it is a core mission of colleges such as his.

“We’re going to be here for the long haul,” he said, “and the institution can only be as strong as the community.”

Return to Top