Toward a Social Choice
Last week, Harvard President Drew G. Faust stated that the Harvard Corporation was actively considering the creation of a social choice fund within the endowment. She wrote in her statement, “The desire to see a social choice fund at Harvard is a topic that began coming up with increasing frequency in my conversations with students and alumni last spring, and it led me to suggest to the Corporation that we explore the possibility of creating such a fund.” This is a positive development indeed, demonstrating that the University will not ignore the statement made by the almost 3,000 undergraduates who supported the third Undergraduate Council referendum this year and the 450 students and alumni who have donated to the Fair Harvard Fund. While this is an important step forward, it is certainly not a victory: We still have far to go to achieve our end goal of creating a social choice fund within Harvard’s endowment. The Harvard community must pay close attention to the details of such a fund to ensure its maximal effectiveness.
This positive signal from the administration is not one to be treated lightly. Rarely do any considerations of the Corporation reach the public without predicting future action. But there is still much work to be done toward the realization of this social choice fund. First, members of the Harvard community must ensure that this “consideration” becomes a concrete reality. The creation of such a fund now seems much more likely after Faust’s statement, but nothing is assured until its final creation. We cannot and should not be placated by this public statement of consideration and must continue to pressure the administration toward concrete action.
Furthermore, the Corporation has several important decisions to make regarding the details of such a fund. Its establishment would be a pivotal moment in the history of Harvard’s endowment. As members of the Harvard community, we need to actively engage in the creation process to ensure the fund’s maximal success. Important decisions regarding its management and degree of publicity will greatly affect its ability to realize its goals. As such, the Responsible Investment at Harvard Coalition advocates that the university consider accountability, transparency, and broad reach in any social choice fund it creates.
First, Harvard must create a committee of students, alumni, faculty, and workers who are empowered to oversee the social choice fund manager hiring and review processes. One of the core goals of responsible investment is accountability. The institution of such a committee would ensure that the fund is maintained according to environmental, social, and corporate governance criteria.
Second, Harvard must also actively publicize the fund. Harvard should ask donors whether they want to give to the social choice fund in every fundraising appeal that endowment gifts are solicited, whether written, digital, or by phone. The fund will only be successful if people donate it to it, and it is only through active publicization of the fund that such donations will occur.
Third, Harvard must manage its social choice fund in-house. The Corporation needs to demonstrate an internal commitment to the ideals of responsible investment. We cannot ask someone else to be moral for us.
Fourth, Harvard should publicly disclose the fund’s investments on a 12-month time delay. Transparency is a central tenet of responsible investment. As such, public disclosure must be part of the fund’s implementation. We certainly understand that the immediate disclosure of investments may be perceived as damaging to the fund’s financial success and therefore advocate for a 12-month time delay.
Fifth, Harvard must accept donations of any size to the fund. The establishment of a social choice fund is premised on the idea that money matters, that investments can and are statements. Donating to the social choice fund should never be cost-prohibitive.
Finally, Harvard must use the social choice fund to make new investments instead of co-opting previous commitments. The establishment of this fund is a sign of change in the endowment. Labeling current holdings as those of the social choice fund is the maintenance of the status quo and does nothing to promote greater invest responsibility.
A social choice fund created along these guidelines is one that is well-equipped to work for positive change in the endowment. The donations currently being held in escrow in the Fair Harvard Fund would be transferred to the University to serve as the foundation for such a social choice fund. Ultimately, we hope that the University will apply responsible investment principles to the endowment as a whole. The creation of a social choice fund should be merely the first step toward an endowment invested transparently and responsibly according to environmental, social, and corporate governance criteria.
Kevin S. Wang ’16 lives in Stoughton Hall. Eliza M. Nguyen ’14, an inactive Crimson news writer, is a history and science concentrator in Quincy House. They are both part of the Responsible Investment at Harvard Coalition. Jen Q. Zhu ’14, an inactive Crimson photo editor and a government and sociology concentrator in Quincy House, is the Vice President of the Undergraduate Council.