This is the first in a two-part series exploring the university's investments. The next article will appear tomorrow.
On the heels of a high-profile scandal involving Tufts' investments, there has been a resurgence in the endowment transparency movement, and its advocates hope the trustees will take note.
In a flurry of recent activity, transparency supporters have requested broader authority for a student group tasked with advising the trustees on investment decisions. They have also charged Tufts officials with ignoring their input and failing to communicate with them.
Specifically, they have called upon the administration and the trustees to expand the size of the Advisory Committee on Shareholder Responsibility (ACSR) and to scrap a nondisclosure requirement that its members are required to sign.
Students at Tufts for Investment Responsibility (STIR) and the Tufts Community Union (TCU) Senate have been the driving forces in the past several weeks behind a student petition and a resolution, both of which they will forward to the administration in advance of this weekend's Board of Trustees meeting.
Senators and STIR members say that the ACSR currently serves little more than a symbolic purpose.
"When you've got nondisclosure agreements preventing you from talking to the community and when the administration doesn't listen to you, there's no dialogue going on at all," STIR leader Martin Bourqui, a senior, said.
The trustees authorized the creation of the ACSR two years ago in response to a growing movement pressing for increased student input in investment decisions. Student advocates at the time called for a 10-person committee to be comprised of undergraduates, graduate students, faculty and alumni, but the trustees ultimately approved a three-person advisory panel made up exclusively of undergraduates.
After taking time to draft its charter, the group began advising the trustees and the administration last spring. They have access to the university's direct holdings and make recommendations along ethical and financial lines to trustees when the board gets proxy votes in external corporations.
But ACSR members say that after they submitted several recommendations and met with Executive Vice President Patricia Campbell and Trustee Vice Chairman Peter Dolan, they learned that all of their work had been disregarded because it did not meet appropriate standards.
According to ACSR member Lorenzo Arroyo, the university told committee members that they needed to submit the type of reports that he felt are best compiled by financial experts.
"Frankly, it was a bit off-putting to hear that they wanted a form of document that we only would have heard of had we gone to business school," Arroyo, a senior, said.
As such, he and other ACSR members support an expansion of the committee so that it can include graduate students, faculty and alumni.
Without this beefed-up membership, advocates say, the university is setting the group up to fail. "They are working basically blind. It's not realistic for them to actually be able to get anything done under those circumstances," Bourqui said. "I don't think anybody expected them to be able to do the work properly."
Campbell disagreed, arguing that the students need time to step into their new advisory roles. "The committees is very new, and the input provided last year was not the kind of in-depth research and advice the trustees hoped to see from the students," she said in an e-mail.
And while transparency supporters are clamoring for a larger ACSR, Campbell said that the trustees have painted an entirely consistent vision for the group over the past two years.
"The trustees have been very clear from the beginning that this is a student committee," she said. "This was the decision made by the board in May of 2007, and this position has not changed."
But Borqui said that the time has come for a reevaluation. "It's not a two-way conversation," he said of the ACSR's interactions with the university. "It's not a productive dialogue. It's basically just them left out in the cold."
STIR, a new student group that has formed to push for increased endowment transparency, and the Senate will officially present this argument to the administration today in a packet of information. It will include a STIR petition with 190 signatures and a resolution that the Senate passed on Sunday.
The Senate's resolution follows up on a similar one that the body approved last spring, but to little avail.
"The TCU Senate urges the Board of Trustees and the Officers of Tufts University to allow the ACSR to undertake broader activities towards shareholder engagement, such as corporate dialogue, filing shareholder resolutions and increasing transparency in a way that will both protect the security of the endowment and permit greater community engagement," Sunday's resolution, which garnered unanimous support, read.
"I think that STIR is advocating for a really important cause on campus, and we're going to help them as much as we can," TCU President Duncan Pickard said.
Campbell had mixed feelings about the Senate resolution. "While we respect the advocacy inherent in the resolution, we are disappointed that there are a number of inaccuracies in the resolution," Campbell said. She did not elaborate any further.
At Tufts, the push for a more powerful ACSR has accompanied mounting student interest in the endowment following the university's $20 million loss in the aftermath of Bernard Madoff's alleged Ponzi scheme. But it is also in line with a national movement trending toward more student involvement in investment decisions.
Cheyenna Weber, organizing director for the New York-based Responsible Endowments Coalition, attributed the growing traction of transparency efforts to a basic need for accountability.
"For any person to be held accountable, you have to have some form of public scrutiny," she said.
Weber pointed to successful transparency initiatives at Harvard, Dartmouth, Columbia and Swarthmore. Like at Tufts, students at these colleges advise their administrations on how to vote on proxy resolutions.
All told, around 30 colleges have transparency committees that involve students, Weber said. She noted that compared to those schools, Tufts lags behind the curve in the arena of community accountability, as evidenced by the nondisclosure agreement that prevents ACSR members from discussing the university's portfolio with their peers.
"It reflects a larger recalcitrance on the part of the school to release information to the wider student body and to remain accountable to that body in some way," she said.
But Campbell said that the nondisclosure agreements serve important financial purposes. "The NDA agreements are required to protect the proprietary nature of our investments," she said.
Still, Weber said that schools that have adopted transparency initiatives have not suffered financially. "If all these other schools can do it, I don't think there's really any argument for a lack of disclosure," she said.
In fact, Weber and Bourqui argued that having the community screen investment decisions leads to more efficient outcomes.
Typically, transparency movements have been concerned with making sure universities are not making profits through purportedly unethical means, such as investments with environmentally harmful corporations or with groups that funnel money to corrupt governments. But particularly in the field of environmental sustainability — and on other fronts too — advocates claim that unethical investments are generally also not financially viable.
"You don't want to support a company if you know their methods are not sound. And that can be a financial statement or that can be a moral statement," Bourqui said. "I believe that they're fundamentally intertwined. Something that's environmentally unsustainable is probably going to be financially unsustainable in the long run."
Even if ACSR members do win concessions from the trustees, they will still only have access to a very small portion of the university's total holdings.
Members can currently see records of privately held, publicly traded companies in which Tufts is directly invested, but most of the university's money is in hedge and mutual funds. ACSR members are not pushing to see those investments, and the administration has not indicated any support for making them public.
"The Board has a policy of confidentiality to maintain the integrity of Tufts' proprietary investment choices," Campbell said.
While she would not speculate on how the trustees will react to the requests from STIR, the ACSR and the Senate, Campbell said that the university's leadership has indicated that the best course of action for members of the advisory committee would be to restrict their focus.
"The trustees have suggested to the students that they focus on a small number of proxy votes so that they can conduct some in-depth research and provide a clear and well reasoned rationale for their position," she said.
But ACSR members feel that even that would be difficult absent additional support from the administration. "Their actions really don't speak of any sincere desire to engage with us at all," Arroyo said.
