Who controls UMass investments? 

Staff Writer 
Monday, April 18, 2016

Who has the power to change investments for the UMass endowment?

The UMass Foundation.

What is the UMass Foundation?

The UMass Foundation is a private, nonprofit corporation founded in 1950 “to foster and promote the growth, progress and general welfare of the University of Massachusetts,” according to its original articles of organization. It serves as a repository of charitable contributions to benefit the university and segregates these private funds from public funds.

The foundation manages and allocates the university system’s approximately $770 million endowment through board policies and investment recommendations.

The foundation serves the five campuses of the university and is overseen by a board of directors. It is a separate entity from the university system.

Who serves on the board of directors?

The board has 25 listed members: 15 public members, the vast majority of whom are alumni, and 10 university-affiliated members, including university President Martin T. Meehan, UMass Amherst Chancellor Kumble Subbaswamy, and UMass trustees chairman Victor Woolridge. The full board membership can be found at umassp.edu/foundation/board online.

Where does the money the foundation manages and invests come from?

According to the foundation, the UMass endowment is an “accumulation of funds, primarily gifts with donor-designated purposes, set aside and invested to support the University’s teaching and research missions in perpetuity.”

Those donors include alumni, other foundations and corporations for the benefit of the university and its students.

Each year, a fixed percentage of the funds’ market value supports the university’s operating budget from interest and investment appreciation.

About 0.5 percent of the university’s budget is currently supported by the endowment, according to the foundation.

Can the public see how and where the UMass Foundation invests its money? If not, why not?

No, according to the foundation. “It’s a private, not-for-profit, and like other university foundations, it doesn’t discuss the details of its portfolio,” said Raymond Howell, a foundation spokesman. “This is standard practice.”

What does the board’s Investment Committee do?

The foundation’s Investment Committee makes recommendations on general investment guidelines, policies and strategy, which are approved by the larger board of directors. The committee also receives guidance from the foundation’s paid adviser, Morgan Stanley.

“Specific investments are made by professional investors, hired by the foundation,” Howell said. “No one at the foundation is picking specific investments. That’s done by a professional manager.”

What is the Socially Responsible Investing Advisory Committee?

It is an eight-member committee created to consider divestment issues raised by students, faculty, alumni and others in the UMass community.

The panel consists of faculty, administrators, alumni and students, and serves as a forum in which social investment issues can be raised, discussed and reviewed.

The committee determines whether proposals warrant review by the board of directors. Proposals for divestment can be submitted through a petition found on the foundation’s website.

Has divestment occurred at the foundation?

Yes, in December, the foundation voted to divest from direct investments in coal companies after a petition submitted by the student-led UMass Fossil Fuel Divestment Campaign, which requested in March 2015 that the foundation divest from fossil fuel companies.

The foundation reported in December that SRIAC met with representatives of the campaign and researched the issue over several months before recommending late last year that the foundation divest from coal.

“That has happened,” Howell said. “Direct investments in coal companies have been rescinded.”

The UMass Fossil Fuel Campaign has been pressing the foundation to divest from the top 200 fossil fuel companies. What are they talking about?

The reference is the top 200 publicly traded coal, oil and gas companies by their estimated carbon reserves. The companies were identified in a report published by the Carbon Tracker Initiative, cited in the campaign’s documented divestment requests.

According to its website, Carbon Tracker is “an independent financial think tank which provides in-depth analysis on the impact of climate change on capital markets and investment in fossil fuels, mapping risk, opportunity and the route to a low carbon future.”

It is not entirely clear how many of the 200 fossil fuel companies the UMass Foundation may be investing in today.

Dan Crowley can be reached at dcrowley@gazettenet.com.