History
On January 1, 2008, with the help of student interest and research, the Trustees of Dwight Hall proposed the creation of a separate fund within the Dwight Hall endowment focused on Socially Responsible Investment (SRI). The SRI Fund was created on the condition that both students and the Trustees are involved in the investment process. The students were responsible for taking the initiative to learn about different asset classes, the full scope of SRI alternatives, and the criteria for manager selection, while the Trustees took responsibility for managing the program and working with the students to develop a base of knowledge for SRI at Dwight Hall in the future. The original proposal emphasizes the need for input from students interested in investment and social justice issues.
The Trustees committed to seeding the SRI Fund with $50,000 from the Dwight Hall endowment as soon as the SRI Committee found appropriate managers for the money, in anticipation that the SRI Committee, working with the Development Committee of the Board of directors, would raise $50,000 in new money for the fund. The Trustees also committed to matching funds the SRI Committee raises up to $110,000. The rest of the Dwight Hall endowment is invested with David Swensen at the Yale Investments Office.
After working with the Trustees to present the SRI proposal, the development coordinator of the 2008 Student Executive Committee interviewed and selected three more students to help run the SRI Committee. The Committee then set to work establishing an investment strategy, namely making the decision of whether to select a professional money manager, invest in a particular mutual fund or set of mutual funds, or establish a process for individual stock selection. All of these strategies focused solely on investment in public equities. The Committee initially decided against picking a manager because the size of the SRI Fund was too small for a full-time professional to manage independently; additionally, the SRI Committee concluded that outsourcing the management of the SRI Fund at such an early stage would preclude the type of student involvement Dwight Hall expected. The Committee also decided against investing the money in a single or set of mutual funds after researching several and deciding that their holdings did not fit the SRI Committee’s definition of social responsibility or Dwight Hall’s mission.
In the SRI Fund’s second year, the SRI Committee made three significant decisions. First, the SRI Committee expanded. Pursuing its initial strategy, the SRI Committee realized that it would have to research a far larger portion of the public equity market to sufficiently diversify its portfolio and beat, or at least match, index performance. Each research category increased its membership by two to three members from several different class years and interest backgrounds, ensuring that the SRI Committee would be sustainable in the long run and informed by those interested in investments as well as social justice. Though the SRI Committee gained access to several leading environmental, social, and governance research databases, to help carry out its work of thoroughly researching corporate responsibility, the logistics of cross-checking every company on a weekly bases proved difficult and inefficient. Furthermore, the SRI Committee found it increasingly difficult to come to a consensus on companies to include in the portfolio despite access to more information about each. Nevertheless, the SRI Committee pursued this model for a semester.
In its second major change, the SRI Committee widened the scope of investment vehicles under consideration to include those in Community Development Financial Institutions (CDFI). Outside of the realm of public equity, this type of investment provided the SRI Committee a different means of serving Dwight Hall’s target community. While forgoing equity-level returns, CDFI offer a different and more direct type of mission-related investment. After several months of research, the SRI Committee proposed its first investment–a $10,000 CD in The Community’s Bank of Bridgeport. The Trustees approved the investment in early September 2009.
By mid-September, however, it became apparent that the SRI Committee needed to undergo a major shift in strategy in order to reasonably invest the money in a sustainable and financially viable set of investment vehicles–focusing mainly on individual stock selection with community investment on the side was not a feasible strategy for the group. Instead, in its third and final major change of the year, the SRI Committee decided to restructure itself into a model that reflected the various available SRI strategies and financial constraints of running a profitable investment fund. The SRI Committee was divided into Market-Driven, Mission-Driven, and Stock Selection groups on the investment side, and Education, Research and Outreach (ERO), and Development on the non-investment side.