Duke students push for endowment transparency

Oct. 03, 2013 @ 09:15 AM

Jacob Tobia climbed up a ladder and grasped the hand of the James B. Duke statue, eye-level with the stoic founder’s shoulders. With help from a group of students, he slid a 40-foot piece of black plastic over the statue, hiding it from view.

Alongside the blanket of black, a sign in blue caps read: “Without transparency, you can’t see Duke.”

About 15 students on West Campus and at the Benjamin N. Duke statue on East Campus made the political statement Tuesday for DukeOpen, a student coalition formed in January that is pushing for increased endowment transparency and socially responsible investments at the university.

As of June 30, the university’s endowment was comprised of more than 4,200 individual funds totaling about $6 billion.

By 2017, the Duke University endowment is projected to be worth about $7 billion, according to DukeOpen.

“This the first time it’s going bigger than Duke,” Tobia said of their activism. He is one of four students who handed a transparency proposal to administration and the Board of Trustees in March.

Now, the students have collected 2,000 petition signatures for Duke endowment transparency in just two and a half days, outside the first-year dining hall and the President’s Homecoming Dance last weekend. They’re turning to guerilla activism and viral web campaigns to gain more supporters.

The Board of Trustees is planning to meet Oct. 4 and 5 to discuss a proposal crafted by Duke President Richard Brodhead that is informed by some of DukeOpen's initiatives, to include a more robust oversight committee, which would review investments and make sure they’re socially responsible, and the creation of a “Social Choice Fund,” which would let investors ensure that their contributions make a positive social impact. Brodhead also met with faculty, financial experts and other university leaders to craft the proposal.

DukeOpen has asked DUMAC, the Duke University Management Corporation, which manages Duke’s endowment, to disclose direct holdings to the Duke community twice a year. A copy of the document would be kept in the Allen Building, or Duke’s central administrative building on West Campus.

To preserve strategic advantage, Duke’s holdings would be disclosed on a six-month time delay.

Tobia said he and other DukeOpen students have held meetings with Brodhead, Provost Peter Lange and Neal Triplett, president and CEO of DUMAC. But Tobia said they have “reached an impasse.”

“We really feel like we’ve vetted the administrative process and have gone through the proper channels as  much as possible and we’ve really exhausted all our options,” Tobia said.

Duke literature senior Casey Williams said they expect the Board of Trustees to discuss changes to the oversight committee and the addition of a Social Choice Fund, but students are pushing for transparency to be added to the docket. Duke community oversight will help protect the university from investing in companies engaged in unethical practices, such as child labor, or organizations that are hurting the environment, he said.

Williams added they have received a “lukewarm” reaction from administration.

“(Duke) has monitored these things long before DukeOpen came into existence, and we’re certainly both consistent with and in line of the practices of a number of similar university endowments,” said Mike Schoenfeld, Duke vice president of public affairs and government relations.

When asked about the upcoming Board of Trustees meeting, Schoenfeld said board members will discuss streamlining and strengthening Duke’s Advisory Committee on Investment Responsibility, as well as the possibility of adding more undergraduate, graduate student and faculty members to the committee.

Trustees also will discuss holding committee meetings on a regular instead of ad hoc basis, and a potential social responsibility fund for donors.

In terms of endowment transparency, Brodhead will call upon the Advisory Committee on Investment Responsibility to review transparency issues and provide recommendations on what could be made public, Schoenfeld said.

DUMAC oversees billions of dollars in assets, he added, which are managed by outside managers, not directly by the university.

“For most university endowments,” he said, the information on "direct holdings is considered proprietary information. This is an intensely competitive world in which we live and the university, Duke, like many institutions with an endowment, is looking to maximize its returns.”

DukeOpen cites Brown University’s Advisory Committee on Corporate Responsibility in Investment Policies as a powerful example of transparent oversight. The committee discloses its voting records to the public and portions of its holdings, according to the DukeOpen report.

Yale and Dartmouth are both cited in the report as sharing some form of endowment holdings with their university communities.

Tobia said students want both traits for Duke: robust oversight and making direct investments public.

“We want to ensure we are as good or better than our peers in making ethical investments,” Tobia said.