Shuman urges CC ‘Community Portal’

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Michael Shuman, Slow Money expert and economist from Cutting Edge Capital.

 

The Colorado College divestment movement took a hit at the end of the last school year when the endowment committee concluded outright not to divest from fossil fuels.

The movement’s aim was to convince the college to remove from its endowment all funds invested in oil and gas. The endowment of some $532 million invests somewhere around 4-5 percent in fossil fuel interests.

Some felt that the money could be better spent in a way that more properly reflects the values of the institution. Yet while divestment would have meant revoking some $25 million in investments from fossil fuels, it would have also involved a reworking of all the investments in the endowment.

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“The committee’s answer was clear – they believed that their sole responsibility was to maximize profits on their investment,” said Phoenix McLaughlin, an incoming senior at Colorado College and co-founder of the Divestment Club. “We weren’t surprised they didn’t do it, we were surprised by their inability to even consider it.”

The committee espouses to have the college’s best interest in mind. Why take money meant to serve students and divest it simply to make a political point?

But, the divestment team argues, there is a social responsibility as well. They crafted a plan for a campus solar array that would cost $6.5 million and potentially save the college enough money on energy to pay for itself after 13 years.

The estimated cost of all solar array and energy improvement projects by 2020 was $46 million, a fraction of the annual endowment, boasting massive savings to energy costs and reducing carbon emissions as well.

But the goal of the trustees isn’t to save the college money on energy – that is the role of the office of sustainability and facilities, both deeply involved in the solar array proposal.

The goal of the committee is to maximize returns on investments, according to Eben Moulton, the venture capitalist and Colorado College trustee who chairs the Trustee Committee on Investments.

“While the trustees understand your passion for this issue, we believe it is our fiduciary responsibility and duty to invest with the sole goal of maximizing returns on the endowment,” Moulton wrote in a statement to the Student Divestment Committee. “As a result, we will continue to make investment decisions without screening for ESG/SRI [Environmental, Social and Governance/Socially Responsible Investing] metrics.”

So, once again students are given the message that making money is more important than standing up for values.

Yet, perhaps there’s a way for Colorado College staff and students, business and economic majors, finance professors and local investors to devise a way out of this mess – one that works for both the values of the college, and the goals of the endowment committee.

Michael Shuman, an attorney and economist for Cutting Edge Capital, advocates creating a “community portal,” an online nexus through which local businesses and investors can easily interact with an institution like Colorado College.

“What I think is interesting for Colorado College to consider,” Shuman said, “is that the portal office offers huge learning opportunities for potentially interested students.”

Shuman recommends that students can go out into the community, study companies, evaluate them and bring back the best candidates. Students can help candidate companies develop partnerships (with mentors, volunteers, teachers at the local small-business development center) that make them better bets on the portals.

They can work with various community groups to mobilize local investors to the site. Among those who ought to be included would be alumni who may still be interested in seeing the town-gown relationship grow.

A tool like a community portal could be vital in reinvigorating local business and investing in companies on Tejon Street, instead of megalithic enterprises on Wall Street. It could improve the local economy, the college’s relationship with the community, and might be even bring a great return on investment.

While the divestment movement may have hit a roadblock in the spring semester, McLaughlin and others are confident about their chances in the fall.

And as student pressure to move away from oil and natural gas increases, the endowment committee may see the merit in alternatives.

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