Harvard University announced today its intention to create a social choice fund. Donations to the fund will be invested in one or more external mutual funds that take special account of social responsibility considerations. The fund will be established as of Harvard’s next fiscal year, which begins July 1, 2013.
The Harvard social choice fund will be managed separately from the endowment. Income from the fund will be dedicated to supporting financial aid for students across the University.
“I have heard from many students and alumni who have asked for additional avenues to support both the University and broader social interests,” said President Drew Faust. “This fund will offer donors another way to support Harvard’s financial aid program and the transformational opportunities it offers our students.”
Contributions to the new fund will be invested in one or more mutual funds selected and approved by the Corporation Committee on Shareholder Responsibility (CCSR). It is anticipated that there will be no minimum gift amount, and that each year 20 percent of the fund’s beginning market value will be made available to support financial aid.
Over the coming months, the University will review the experiences of other colleges and universities that operate similar funds, and will receive advice from the Harvard Management Company and others.
“In addition to their excellent track record as investors, Harvard Management Company has considerable expertise in due diligence processes that rigorously evaluate investment opportunities on a number of levels, including sustainability, governance issues, and other factors,” said Faust.
Operational details of the social choice fund will be worked out by the end of the current fiscal year, and the University plans to review and assess the fund’s performance within five years.