Phone calls and letters to alumni represent only one portion of Tufts' fundraising efforts. A significant percentage of the money that supports the University's day-to-day operations accrues from the diversified investing of Tufts' endowment. This vital financial pool, growing but still comparatively modest, has steadily increased over the last ten years, but some students worry that morally questionable investments may be contributing to this financial success.
Serving as a watchdog to monitor Tufts' investment practices is a group of students led by junior Douglass Hansen. They hope to convince administrators to pay careful attention to the companies that receive University money. Hansen, who plans to launch an investment awareness campaign next semester, believes Tufts is obligated to invest responsibly because its own vision statement emphasizes good citizenship.
"Within a framework of making money we want to do the right thing as well," Hansen said.
The endowment is currently valued at $558 million, which is more than three times what it was in 1989. In the ten-year period ending on June 30, 2000, the endowment was compounded at a 14 percent rate, according to Assistant Treasurer Darleen Karp. A fundraising campaign spearheaded by President John DiBiaggio caused the endowment to grow significantly in recent years, and the resulting increase in returns provided an influx of money to the University's budget.
"The larger the endowment, the more money available for financial aid, professorships, library support, special programs, etc.," Karp said.
Although Tufts has made progress, its endowment remains relatively smaller than those of its benchmark schools. According to The Chronicle of Higher Education, there are 31 schools with endowments that exceed $1 billion. Harvard, for example, has an endowment of $19.2 billion. Yale's endowment is nearly $10 billion.
Numbers for the current fiscal year are not yet available, but Karp said that Tufts' finances are in good shape, despite the vagaries of the stock market. Tufts makes strong efforts to diversify its investments so that if one fund does not fare well, others will compensate, according to Thomas McGurty, Tufts' vice president of finance and treasurer.
About 70 percent of the endowment is invested in securities such as mutual funds and stocks, while an estimated 30 percent is held in bonds. To maximize returns, the Trustee Investment Committee sets investment policy and hires professional money managers to make security selection decisions.
"The University has a diverse portfolio which produces a strong output," McGurty said. "Our asset allocation is close to the average of similar institutions."
Encouraging Tufts to make socially responsible investments has been a popular goal for students in the last 15 years, and numerous campaigns have focused on divesting University money from companies whose policies offend students' moral sensibilities. In the 1980s, there were anti-apartheid student protests calling for divestment from South African companies. In 1994, the Hydro-Quebec company - an environmental polluter - was the target of protestors' ire. Last year, students launched a campaign to force Tufts to divest its professors' pension money - included in the national professors' pension fund TIAA-CREF - from Talisman Energy, which obtains oil from the Sudanese government, whose leaders they accused of supporting slavery.
Tufts' "Responsible Investment Policy" prohibits the University from investing in tobacco or alcohol product stocks and funds, but there is no social responsibility screening that is applied to Tufts' general portfolio.
"Tufts' overall investment objective is to maximize returns within prudent risk limits. This can be best achieved by not putting constraints on the University's investment managers," Karp said. "In rare and exceptional circumstances, investment restrictions may be adopted in instances where a company's activities contravene fundamental moral principles or core values of the University."
While Tufts does not invest directly in tobacco or alcohol companies, there remains a possibility of indirect investment in those industries. For example, a mutual fund held by the University could own stock in a tobacco company. "Money could be in mutual funds or limited partnerships where transparency exists," McGurty said. "However, the Tufts name is not on any of the investments."
Hanson is pleased with the existence of the current ban on alcohol, tobacco, and Hydro-Quebec, but feels that a more strict policy is necessary. Tufts can still maintain its high rate of returns, he said, while supporting socially responsible corporations.
Justifying his vigilance, Hansen pointed to a Tufts investment in W.R. Grace, a chemical company that he called a large polluter, as well as Eastman Chemical Company.
"We are simply asking Tufts to be responsible," he said. "Eastman is a large polluter of dioxin, which is one of the most toxic chemicals in existence."
