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Once again, how Harvard manages its money is a target of attention, and deservedly so. Just last week, we commented in favor of Harvard’s pledge not to reinvest in HEI Hotels, a company widely alleged to have engaged in labor rights violations. At the same time, several students have begun the Fair Harvard Fund movement, which aims to make responsible investment a priority at Harvard. The main goal of this movement, which counts former undergraduate council president Senan Ebrahim ’12 as one of its founders, is the creation of a social choice fund to manage a portion of Harvard University’s endowment. Ideally, donors to Harvard would have the option of having their gifts managed by this particular fund, which would follow strict social, environmental, and governance criteria.
By incorporating a social choice fund into the management of our university’s endowment, the Harvard Management Company would send a positive signal to donors, the campus community, and the public at large. In order for this to be accomplished, the Fair Harvard Fund must continue its welcome presence on campus and work to see its goals develop concretely. Many institutions such as Brown University already have comparable options for their donors, and the market performances of such socially responsible funds have in fact been generally aligned with those of more traditional investment tools. By establishing a social choice fund, Harvard would likely be able to expand its endowment by attracting new inflows while simultaneously promoting ethically oriented business.
There are several steps that the Fair Harvard Fund could take to see its immediate objectives carried forward. To begin with, the students behind the movement have issued a statement endorsing a future town hall meeting, where the Harvard community could discuss the guidelines for socially responsible investment at our university. Although the intention of promoting “direct democracy” with a town hall meeting is certainly appealing, we should all be wary of using such an open forum to determine the specific investment criteria of the Fair Harvard Fund. The term “social responsibility” is vague to start with, and the proposals generated from this kind of event might only complicate attempts to come up with a workable and ethical set of principles to act on. Instead, let us suggest an alternative: the social choice fund could follow the strict guidelines already set forth by the Responsible Endowments Coalition. These include a commitment to investing in companies that do not abuse their workers, as well as particular attention to ventures that uphold environmental sustainability. By employing both negative screening—refraining from investing in companies that are judged harmful to society—and positive screening—an active effort to boost businesses that advance environmental or welfare causes—the social choice fund could become an effective vehicle for tangible change in the local and wider community.
One of the current goals of the Fair Harvard Fund is to persuade the HMC to take over the administration of its assets. We urge the HMC to consider this proposal seriously, since there can only be benefits for both sides of the potential partnership, not to mention all who wish to see social choice investing become a reality at Harvard. On the one hand, by handing over its resources to the HMC, the Fair Harvard Fund would benefit from the supervision of established industry professionals. On the other hand, the HMC would have the opportunity to promote worthy causes alongside its continued management of the endowment at large, and presumably attract new donors who prioritize socially responsible investing.
As of today, the Fair Harvard Fund continues to solicit donations from members of the university community. With the constructive potential of its vision, the movement surely has a bright future. With the recent experience of HEI to serve as a reminder, we should all push for a Harvard where fairness is not merely option and an interest, but a priority.
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