Student Calls for Sound Investing

Author: [no author name found]

Middlebury College is above all an academic institution. Within and supporting the institution's mission to educate "ethical leaders" who are "committed to service" and "prepared to accept responsibility for their actions" is a strong statement of values. I believe that the community values professed in the mission statement and demonstrated by the volunteer work of students, faculty, alumni and the institution as a whole should be reflected in the College's endowment. By using community investment, Middlebury can maintain its financial standing while helping make the surrounding community more sustainable and equitable.
I should say outright that I have no idea in what corporations Middlebury's endowment is invested, and therefore am not making the argument that Middlebury is supporting socially unjust and environmentally destructive practices. At this time I am not advocating negatively screened investing, which would remove undesirable corporations from the College's investment portfolio. Rather, I would like to suggest that Middlebury invest proactively, placing a portion of its existing endowment in community investment and in so doing, make a statement to support the families, economy and environment surrounding our college.
Community investment is a type of socially responsible investment that makes community development projects possible by providing capital to people that are under-served by conventional lending institutions or that can not easily secure capital through the usual lending channels. Most community investment today involves investments by socially concerned individuals and institutions in various types of community development financial institutions (CDFIs), which in turn make loans to support locally-initiated community development projects that attend to problems of poor and disadvantaged households and communities. The CDFI repays the investor with a three to four percent rate of return on his or her initial investment.
Community investment was first used in the low-income neighborhoods of Chicago but is equally applicable to the agricultural regions like Vermont, where farms are being abandoned and overrun by development. Those on the low end of the economic scale don't have the means to maintain their way of life or make improvements to their communities. As a result, the foundations of a poor community, including businesses, housing and land, are controlled by outside owners and developers. Absentee owners have little personal stake in the environmental or social health of a poor community. CDFIs address this problem by making low interest loans to people that aren't able to secure conventional loans. This capital helps to build more sustainable and equitable communities by financing small business start-ups, affordable housing projects, construction of community centers and community-supported agriculture programs.
In addition to the three to four percent return Middlebury College could expect on its investment in a CDFI, the benefits would be threefold: 1) A stronger relationship with the surrounding community; 2) the potential for an increase in the giving rate of socially concerned alumni; and 3) an educational opportunity for all students, especially those in economics and the social sciences. Williams College recently established a community investment fund demonstrating that this form of investment is feasible and important for a small liberal arts college to make. I hope Middlebury follows this inspiring precedent and includes community investment in its endowment at the next possible opportunity.

Ben Brouwer '04