It costs almost $50,000 a year to attend Penn, but tuition revenue doesn't come close to supplying the amount of money it takes to run this university. Penn relies on endowment profit to pay for financial aid, new facilities, academic programming and much of the rest of the operating budget.
Where are these massive profits coming from? In recently released figures, our endowment stands at $6.6 billion, a 20.2 percent gain from last year. But the University refuses to disclose any information about its endowment holdings.
Penn has "a legal and moral obligation to protect [investment managers'] intellectual property," i.e. their portfolios, University CIO Kristin Gilbertson wrote in an e-mail.
But other schools have managed to strike a balance between transparency and investment performance.
The Sustainable Endowments Institute gave Penn an F for endowment transparency earlier this year. The same report states that Harvard, whose endowment is almost six times our own, discloses proxy voting records to the public - nonbinding recommendations passed by trustees on how the endowment should be invested. Other schools, like Williams College, release all proxy voting records and investment holdings to the public.
I have to wonder: Who had to suffer so that I can get so many thousand dollars each year in grant aid? Were $500 here or $800 there profits from investment in a company that uses child labor? Was this $1,200 chunk from a company that manufactures highly toxic depleted uranium for use in Iraq? Were these 50 cents from a company that doesn't allow its workers to unionize, or doesn't give health insurance?
Obviously, I could never know where each dollar of my particular financial-aid package came from. But I'd like to know that the fund that is the lifeblood of my education isn't built on exploitation, lies and human-rights violations.
Our endowment managers have two responsibilities: to maximize investment returns and to ensure that our investments support ethical companies. The endowment performs well, but we do not have an adequate structure in place to guarantee socially-responsible investment.
The Social Responsibility Advisory Committee, composed of faculty, students and staff, was established in 2004. It advises the Trustees on their proxy votes - and that's all it can do. It can't make recommendations itself to fund managers and it often doesn't have enough time or resources to do sufficient research on the issues at hand. Essentially, its existence is no more than lip service to the ideas of social accountability and of participatory democracy at the university level.
I care about where my food comes from and my paycheck comes from my job at a place whose mission is in line with my values. Don't I have a right to know where my education is coming from as well? Penn is almost certainly a shareholder in privately held companies, which the school practically has to beg to be allowed to invest in.
And there's no doubt that the likely enormous profits generated by these assets grant these companies tremendous influence over our education.
The University is sustained by a $6.6 billion colossus. The University community should therefore have a say in its use and origin.
First, the Social Responsibility Advisory Committee should be permitted to make proxy votes itself. This cannot possibly hurt our investment, as proxy votes are nonbinding, so fund managers could steer us clear of fiscal disaster. This way, university consensus would be represented by actual members of the community, rather than trustees who haven't lived and worked here for many years.
Second, and most importantly, the University needs to disclose all proxy votes, and ideally some of its endowment holdings. We can't ensure that our investments align with our values unless we know what those investments are. Full disclosure may not be practical at this point. But fund managers at schools like Harvard, whose endowment is healthy, to say the least, have been able to balance their two responsibilities.
It's not impossible to continue growing the endowment for the University's benefit while being socially accountable for the University's benefit. It may take more work, yes, but that work is necessary to engage students, faculty and staff in the often-dull but vital process of following the money.
Penn is powerful, both because we're sitting on billions of dollars and because we're a prestigious institution. Anything we do sets an example for other universities. The administration should prove that it cares about communally shaping the education students receive, rather than dictating on whose terms we will learn.
Meredith Aska McBride is a College sophomore from Wauwatosa, Wis. Her e-mail is mcbride@dailypennsylvanian.com. Radical Chic appears on Wednesdays.
