Fossil Free SCU objects to university investment portfolio
THE SANTA CLARA
January 28, 2016
In tug-of-war fashion, university administration and student group Fossil Free SCU continue to disagree publicly on the topic of complete divestment of funds contained in the $850 million endowment from the fossil fuel extraction industry.
In a now rescinded email sent to many Santa Clara Community Action Program alumni last Wednesday, FF SCU asked former students to halt any donations to the university until the administration withdraws funds completely from all commingled funds containing fossil fuel extraction investments.
The group ended up sending an apology to the email’s original recipients, describing the choice to send the email as “lack(ing) foresight.”
After hearing about the email, Mike Hindery, vice president for finance and administration, brought it up at last week’s Associated Student Government senate meeting, where senators deliberated on a resolution in support of FF SCU.
“Reaching out to the alumni community and telling them not to donate to the university until we divest puts all of us at great risk and really does change the dynamic and kind of the relationship and engagement we’ve tried to have with Fossil Free Santa Clara,” Hindery said.
Blair Libby, the leader of FF SCU and program coordinator for B-LEJIT, said the list of email addresses was obtained through the SCCAP alumni directory, but the group did not consult the Alumni Office before sending out the correspondence.
During the Jan. 21 ASG senate meeting, which both both Hindery and Libby attended, senators Eddie Kelinksy, Alex Perlman and Sammi Bennett fielded questions about the resolution, which was introduced to student senators the week before.
The resolution, a continuation of a similar resolution that failed to pass last May, expressed support of FF SCU’s mission.
After a 45 minute discussion the resolution was tabled and not put up for a vote. Kelinksy said his committee will be making changes to the resolution to reflect the senators’ input.
Kelinsky said getting the resolution to pass has not been without its challenges. “You’re asked to compare very difficult moral and economic questions like, ‘How will this affect the school’s investment and the endowment?’ How do you compare the symbolic victory with the possible cost and loss of economic revenue? It’s really difficult and it’s really frustrating, but we think it’s the right thing to do so we’re gonna keep doing it,” he said.
Getting ASG involved in its campaign is one of the ways FF SCU is strategically working to gain the support of the campus community. FF SCU sent out a campus wide email on Jan. 10, in response to Hindery’s June 1, 2015 email, which contained the university’s official response to the group’s requests made over the course of approximately two and half years, dating back to fall 2012 when they began to formally engage with administration on the issue. FF SCU is a collaboration between GREEN Club and SCCAP’s B-LEJIT program.
In the email, FF SCU reiterated its position against fossil fuel extraction companies, summarized four of the main points made by the administration in its June email and expressed its support for the “new, sustainable investments” the university committed to making before stating that “the university’s decision not to divest is unacceptable.”
The response went on to include counter arguments to the university’s explanation of its investments in commingled funds and argue that renewable energies are a more sustainable, while still fiscally sound, investment option in contrast to fossil fuels. FF SCU also discussed the November conference on climate change held on campus, stressing the ethical and moral issues at play in the divestment debate.
“Our main point isn’t financial. It’s just the ethical side that, is it right to profit from this industry?” said Travis Osland, a member of Green Club and B-LEJIT. “We’re not trying to say that financially we’re better off. That’s not our main point that we’re defending.”
Different figures have been presented, but according to a university-issued summary of a report by third party consulting firm Cambridge Associates, the monetary loss could be close to $8 million if the university pulled all funds from commingled funds containing fossil fuel investments–which account for approximately 73 percent of its portfolio.
While FF SCU suggested that new sustainable investments could offset that loss, Hindery said the administration’s decision stands. Hindery also stressed that the university has no direct investments in the top 200 fossil fuel extraction companies, a position he described as “one of the most progressive positions already among American universities.”
In separate interviews, both Hindery and Libby agreed that the two groups are experiencing an ideological disagreement on an ethically-infused financial issue.
“I respect [Hindery] a lot but I think there’s a fundamental disagreement about how investments play into ethics,” Libby said. “You can call things direct or indirect. I see this as a direct funding of a destructive industry.”
Another concern expressed by members of both FF SCU and ASG, is the lack of concrete numbers being made available to them throughout this ongoing debate. The university has taken a firm stance against releasing any details of its investment portfolio, leaving members of the campus community in the dark about the details of specific holdings. Sean Reilly, president of GREEN Club and member of both B-LEJIT and FF SCU, said increased transparency is a main priority.
“We’re asking them to get rid of this thing that we know they have, but we don’t know how much they have or where it’s at or any of that stuff because they haven’t been willing to tell us that,” Reilly said.
When asked if the university would consider releasing details from the university’s investment portfolio to anyone outside the small circle of university employees privy to it, Hindery said that such action would not be a sound business practice. He said his office is being “appropriately open and transparent,” in their engagements with FF SCU and the campus community at large.
“We’ve shared with them general information about it, but to… be that specific is not the right thing to do,” Hindery said. “That’s really important, confidential information.”
According to law professor Don Polden who teaches a course about nonprofit organizations, the university, as a 501(c)(3) does not have a “publicly transparent reporting requirement.” Upon review of the most recent 990 report the university submitted to the IRS to keep its nonprofit status, The Santa Clara did not find any specific information regarding university holdings in particular investments.
“If the information you are seeking (e.g., detailed investment portfolio information) is not on the 990 then I don’t know of any source by which you can get this privately held information (except if the university provides it to you),” Polden wrote in an email.
Hindery is expected to release another response to FF SCU in the near future, which he said will acknowledge its latest statement, but will stress also that future engagement will be made easier if and when new information is presented.
He said he appreciated their Jan. 10 message, but saw it mainly as a reiteration of their previous arguments.
“I think it’s great that they’re asking the questions and they’re challenging us,” Hindery said. “We haven’t come to the point where we agree to disagree.”
In reaching out to various alumni, Jesuits, faculty and student groups, FF SCU said it hopes the administration will reconsider its position if faced with unified, campuswide support of its cause.
“(The administration is) seeing mostly spreadsheets and so they’re not actually too in touch a lot of times with the actual campus,” Reilly said. “We’re hoping that if we can get all of these groups to come out in support of us then we can then go back to the administration and say, Santa Clara University wants us to divest.”
Contact Jenni Sigl at email@example.com or call (408) 554-4852.