Students Push Universities to Invest Locally

U. of Chicago, Wesleyan shift deposits to community banks
Posted by: 
Dave Zuckerman
Copyright Responsible Endowments Coalition 2012

The University of Chicago’s Class of 2012’s gift was truly an investment in the community; after negotiating with administration officials in February about the University’s investment practices, students convinced the University to shift $1 million in deposits to four community banks. Each bank will receive the FDIC insured maximum deposit of $250,000.

One million is a tiny portion of the University’s large endowment but it represents the growing consciousness regarding the issue of social responsibly investing – from both students and administrators.  This money will help local banks increase lending in the neighborhoods around the University, further strengthening those communities that surround this anchor institution – creating a win-win situation for both.

In May, Wesleyan, located in Middletown, CT, also took similar steps, shifting $500,000 to two community banks, including the Community’s Bank, which is minority owned and certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI). CDFIs are institutions that have a commitment to investing in historically, underserved communities. They also chose Liberty Bank because of its commitment to community organizations, contributing more than $6 million in grants to nonprofit organizations since 1997.

Support organizations, such as the Responsible Endowments Coalition that works to build and unify the college and university-based responsible investment movement, have helped encourage these efforts. Their website offers a wide array of resources and also highlight a growing number of success stories.

These stories, including the two examples above, comprise a larger movement that tells universities that it is not enough to just green the campus but to green the endowment, that is not enough to just purchase locally but to deposit locally, and that it not enough to just promote diversity in the workplace but to promote diversity through their investments. And as the above examples demonstrate, this can be a win-win for both the community and University because both are inherently connected. As one goes, so goes the other.