ASU Foundation creates new socially responsible investment fund

By

Michelle Stermole

Arizona State University is a leader in higher education for implementing and achieving sustainability standards. A new option that launched last week through its foundation deepens that commitment to future generations and environmentally and socially responsible practices.

The ASU Foundation, a private, nonprofit organization that raises and invests private contributions to ASU, established a socially responsible investment fund that enables endowment donors to select this pool for their money rather than the traditional endowment pool.

“The university remains committed to taking a leadership role in addressing issues that pose a threat to our global community and the creation of this new fund is another example of how we are supporting that effort,” said R.F. “Rick” Shangraw Jr., chief executive officer of ASU Enterprise Partners, the parent organization to the ASU Foundation. “This is an important topic for faculty, students, donors and other stakeholders and is integral to ASU’s philosophy on sustainability and inclusion.”

An endowment is a permanent gift that is invested for the long term to provide financial support for the university. The gifted funds are pooled together to yield investment returns based on market conditions. A portion of the investment return provides financial support for the donor’s designated use. Endowment gifts typically are geared toward scholarships and graduate fellowships, faculty chair professorships, research fellowships, research programs and specific schools or academic departments.

Establishing a socially responsible investment option allows donors to magnify their impact. Their gift supports the university and the investments will be in public and private companies with strong racial and gender equality, good governance and a focus on economic, social and environmental sustainability. While the traditional endowment pool includes these considerations, this separate portfolio has a more explicit mandate that allows for an even greater focus to invest in this way without needing to shift legacy investments.

“We don’t believe that we will be sacrificing returns to invest in this manner — it just adds a nonfinancial lens to evaluate a company,” said Jeff Mindlin, vice president of investments for ASU Enterprise Partners. “With this new donor option, the money set aside will be a catalyst to demonstrate that we can perform well while making an impact.”

From the establishment of the first School of Sustainability in 2006, support as a founding member of the Intentional Endowments Network in 2016 and commitments to numerous climate change coalitions, the university and foundation have been proactive in finding optimal ways to be good stewards in the community and for the planet as well as with investment dollars, Shangraw said.

ASU has implemented processes to reduce energy consumption and emissions and increase efficiency and established a renewable energy program that includes extensive solar initiatives on all four of its campuses. Reducing landfill waste is another area of focus through recycling, composting and reusing and repurposing and water conservation through low-flow fixtures and landscaping water management. Additionally, ASU uses sustainable products for cleaning and printing, revised methods for grounds and equipment maintenance and is building all new construction buildings it owns and operates to LEED Silver certification standards.

Because they are still building the strategy and identifying investments, donors have a chance to be a part of the implementation process, Mindlin said. Endowment donors have always been able to designate the beneficiary or use of their philanthropic gift. Now they will also be able to choose a traditional or socially responsible strategy for how it’s invested.