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Impact Investing: Putting Endowment Funds to Work for Good

3p Contributor | Tuesday November 8th, 2011 | 1 Comment

The following post is part of TriplePundit’s coverage of the 2011 Net Impact Conference in Portland Oregon.  To read the rest of our coverage, click here.

by Kathryne Auerback

From 1977 to 1986, student activism on campuses across the United States drove anti-apartheid divestment that eventually pressured the South African government to begin negotiations that led to the end of the apartheid system.

With the power to effect change of this magnitude, imagine what else can be accomplished by an impact investment approach to endowment fund management.

A new program of the Sustainable Endowments Institute, in partnership with 16 other organizations including AASHE, The Clinton Climate Initiative and Net Impact, is helping academic institutions and other non-profits to do just that. The Billion Dollar Green Challenge will help drive transformational change by encouraging and supporting the investment of a portion of institutional endowment funds into self-managed revolving funds to capitalize energy efficiency improvements. The goal of the program is to secure commitments totalling one billion dollars.

Mark Orlowski, executive director of the Sustainable Endowments Institute, explained to a packed session at the Net Impact 2011 conference that, in addition to providing an average return of 32 percent, these funds offer a hedge against future energy costs and the opportunity to disaggregate investments from market performance.  In tough economic times, these are considerable advantages for cash strapped public and private institutions.

In addition, by shifting operational expenses to investment opportunities, the program ignites campus stakeholder engagement and unlimited real-world learning that professors across disciplines can build into their courses. Students can plug in by participating in initial energy audits, proposing energy saving projects, tracking progress, or analyzing financial results.

Orlowski whittled a list of 900 institutions down to 32 Founding Circle participants — from Boston University, Harvard and Stanford, to small schools like my own, Edgewood College in Madison, Wisconsin.  Participation is open to non-profits who want to join the growing community of organizations making this public commitment to putting our money where our mouths are.

The potential collective impact is significant. At the average ROI, we’re talking about $1.32 billion in energy savings. That’s the equivalent of the cost to power all the households in the City of Chicago.

We’re all stakeholders. Social, environmental and economic injustice affects us all. The Billion Dollar Green Challenge presents an incredible opportunity for individual action that can lead to high impact positive change. Get involved and encourage the students in your community to lobby their institutions to step forward and sign on.

Kathryne Auerback helped develop and launch the Edgewood College Sustainability Leadership Graduate Program. She is an instructor in that program as well as in the School of Business, where she serves as the Director of Program Development. In this role, she supports program and curriculum quality, growth and retention, and community building among students and alumni. Kathryne has over 20 years of strategy, corporate responsibility, sustainability, marketing and public relations experience, most recently as principal at Generation Strategy LLC and previously as vice president at Madison Environmental Group, Inc. She serves as vice chair on the Board of Directors of REAP Food Group. Kathryne earned her MA and MBA degrees
from UW-Madison.


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  • http://www.facebook.com/people/Peter-Burgess/702941048 Peter Burgess

    I am sorry … but the following from this article makes me see red:

    Mark Orlowski, executive director of the Sustainable Endowments Institute, explained to a packed session at the Net Impact 2011 conference that, in addition to providing an average return of 32 percent, these funds offer a hedge against future energy costs and the opportunity to disaggregate investments from market performance.

    My issue is simple … if we are really interested in sustainability then we must get away from the metric referred to in this statement. I am sorry … but I am not interested in a sustainable investment that is giving on average a return of 32 percent. This is … dare I say it … stupid … insane.

    We absolutely have to have metrics that are centered on valueadd rather than money profit. The purpose of economic activity is NOT to make money profit but to improve the condition of human society now and for future generations. The metrics being used should be about how little resource is beiung used to make progress in quality of life. That is the return that we should be measuring and we should be applauding. Money is NOT a measure … it is, if I recall my economics lectures of 50 odd years ago … a medium of exchange and a store of value. Hah! … what a joke … it is now merely a chip for the bankers to play with in their global casino.

    Valueadd is really basic … is society better off now thab it was before? But how do we measure value? And the answer is rather much in the same way we measure cost in many modern corporations, we use standards. We use the concept of standard value, rather the same way a corporate cost accountant will use a standard cost … and as we move from place to place, the standard values can be adjusted, the same way standard costs can be adjusted when the elements in the cost change. This is accounting … not rocket science!

    So while I am happy about investment in sustainable initiatives … we must absolutely move away from trying to fit them into the for profit system of metrics and evaluation.