The Student News Site of Macalester College

The Mac Weekly

The Student News Site of Macalester College

The Mac Weekly

The Student News Site of Macalester College

The Mac Weekly

Student Endowment Responsibility Committee offers its take on endowment

By April DeJarlais

The Student Endowment Responsibility Committee (SERC) debuted itself Tuesday with a presentation titled “$600,000,000 and Social Change: Understanding Our Endowment” that explained the basics of Macalester’s endowment and how it works toward social responsibility and change.Students in SERC will collaborate with Macalester’s investment office to act as liaison between the office and the student body. The student presenters billed SERC as more “proactive” than the Social Responsibility Committee (SRC) in that it generates and brings issues directly to the investment office, whereas students must take up issues with SRC.

DeWitt and Lila Wallace’s gift of Readers’ Digest stocks that Macalester received in 1990 played a major role in creating the bulk of the current endowment, the last of which were sold in 2002. As of June 2010 Macalester’s endowment stood at $587 million, which ranks fourteenth among national liberal arts colleges.

Consisting mostly of private gifts, it makes up 34.6 percent of the school’s total budget, with gifts being eight percent and tuition 57.5 percent. Scholarships, academic programs and college salaries all stem from the endowment, which gives the college a more reliable and stable flow of income.

Its bulk in the budget is considerably more than other liberal arts colleges, but Macalester ranks first place nationally for the percentage of students receiving financial aid. The leeway the endowment allows in creating a diverse student body is part of what “makes Mac Mac,” SERC presenters stated.

But the endowment isn’t a big pot of gold hidden under President Rosenberg’s desk. The nearly $600 million are co-mingled with the trillions of dollars in the world market, and the college is invested in thousands of companies. Dozens of money managers are in charge of the choosing companies and overseeing investments, a job that would be impossible for the four employees in Macalester’s investment office who wish for the endowment to “gain exposure across the market,” investment office intern and SERC member Steven Fitzgerald ’12 said.

Since Macalester isn’t directly involved with making investments, questions have arisen regarding the social responsibility of the endowment’s dollars. The most recent action taken was a 2007 student recommendation to President Rosenberg and the Board of Trustees that the college make no investments, or divest existing stocks, in companies involved in the Darfur conflict and violence of western Sudan.

A February 2008 Mac Weekly article reported that Macalester had $75,000 on one investment in a company suspected of involvement of Darfur. Such a sum is negligible in the scheme of the global stock flow, but today Macalester is not directly involved in any such companies.

Students of SERC called divesting Macalester’s funds “more symbolic, but it can make a big impact,” given the size of Macalester’s endowment compared to, for example, Harvard University’s of $27.4 billion as of June 2010. Divesting from a company may not even carry much financial weight, since stocks are simply being sold to another investor.

The incoming chief investment officer Mansco Perry III said that socially responsible investing is becoming “more pervasive” in American businesses, and that companies are recognizing “that it’s just good business to be socially responsible.”

SERC’s goal is to increase student involvement into what may seem like a very ambiguous $600 million and emphasize that investing in corporate America is smart business rather than selling out.

“Every single dollar in the [endowment’s] investments has a purpose,” Fitzgerald said.

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