ÍÃ×ÓÏÈÉú

Dear ÍÃ×ÓÏÈÉú Community,

The ÍÃ×ÓÏÈÉú endowment provides critical financial resources for the College’s ongoing operations, making annual contributions that support student financial aid, faculty and staff compensation, and every other expense the College incurs. That support depends directly on the investment performance of endowment assets. Consequently, the Board takes very seriously its fiduciary duty to manage the endowment prudently. 

ÍÃ×ÓÏÈÉú – A Leader in Responsible Investing
Within the boundaries of our fiduciary duty, the Board has and will continue to consider ÍÃ×ÓÏÈÉú values in determining investment policy. ÍÃ×ÓÏÈÉú is proud to be a leader among colleges nationally in responsible endowment investing.

In 2014, the ÍÃ×ÓÏÈÉú Board decided to divest from fossil fuel stocks, becoming California’s first private college or university to do so. At the same time, the Board committed to consider environmental, social, and governance (ESG) factors in determining which stocks to hold in the endowment portfolio. That commitment was realized in 2017 after a 3-year process, when ÍÃ×ÓÏÈÉú’s endowment became the lead investor in a new fund that it helped design. Other nonprofit organizations have followed ÍÃ×ÓÏÈÉú’s lead, and the fund now has more than $900 million in assets. The fund has delivered good performance, and its low-cost structure saves the College hundreds of thousands of dollars annually.

The fund applies a dynamic ESG screening process, investing relatively greater amounts in the stocks of companies achieving above-average ESG scores, as determined by an independent third party. As companies change and the ways of measuring E, S, and G evolve, the fund changes in step. In summary, ÍÃ×ÓÏÈÉú’s responsible investing continuously adapts over time.

The fund must balance its responsible investment goals with other requirements such as broad diversification to manage risk and the paramount objective of achieving a strong return that will sustain the College’s operation in perpetuity. It is also important to understand that the College does not select the individual stocks that make up the fund’s portfolio, and as only one of many investors in the fund, ÍÃ×ÓÏÈÉú cannot dictate changes to the fund’s underlying holdings.

Additional Endowment Disclosure
In response to the student request for certain disclosures, the Board will take two actions:

• Not later than June 30, 2024, it will make material disclosure of its holdings in military and weapons manufacturers, if any. Such disclosure will be subject to the legal limitations ÍÃ×ÓÏÈÉú has agreed to with the fund manager, but we are confident the disclosure will be sufficiently detailed to satisfy the request. 
• During the summer, the Board will review its policy on endowment disclosure to determine what additional information on endowment holdings it can provide to the ÍÃ×ÓÏÈÉú community on an ongoing basis. Our goal would be to begin providing that additional information beginning not later than September 30, 2024. 

Providing another avenue for transparency, the Board’s Investment Committee will continue to include appointed representatives of both the faculty and the student body. The Board welcomes inquiries and suggestions about the endowment from all College constituencies, and always seeks to help the broader community understand the purpose and management of the endowment. 

Divestment
Regarding divestment, the Board has consistently held that divestment must be a rare action and, as a prerequisite, must reflect near unanimous support across all College constituencies.

We also do not believe that taking positions on any number of contentious geopolitical issues is in the College’s best interests. Regarding the Israeli-Palestinian conflict specifically, the Board has deliberately not taken actions that could imply the College has adopted an institutional position on the conflict. 

Finally, the Board must consider the practical implications of any divestment request. The potential benefit of any proposed divestment must be weighed against the administrative and financial costs of making such a change.

These policies will continue to guide the Board’s future decisions on divestment within the endowment.

Sincerely,

Donald P. Gould
Chair, ÍÃ×ÓÏÈÉú Board of Trustees