The Fossil Fuel Divestment Movement’s Newest Strategy: Alternative Endowments

If there’s one universal college experience, it’s that when you take off that graduation robe, you’d better turn your phone on silent. You’re about to start getting calls, mailings, and emails soliciting donations to your beloved alma mater. Now, increasingly, alumni who care about climate change have an alternative way to give.

Fossil-fuel divestment has become the major focus of climate change activism on U.S. college campuses. The student-led movement, which asks university endowments to sell investments in fossil-fuel companies, has racked up modest victories at small schools in recent years. But at many larger schools, university boards have refused to sell their stakes in some of the world’s most profitable companies. Stanford University, which said it would divest from coal companies only last spring, has been the biggest endowment to divest.

Campaigners are now expanding their protest tactics to give schools a financial incentive, in addition to a moral one. At schools like Harvard, Columbia, the University of California, and a coalition of more than a dozen schools including MIT, Stanford, Dartmouth, and Georgetown, they’ve set up “alternative endowment” fundraising campaigns to advance their cause by showing that former students will give money—as long as that money isn’t going to be invested in fossil fuels.

“One of the strong points of leverage that alumni have is through their donations,” says Ben Franta, a Harvard graduate student in applied physics who serves as alumni coordinator for Divest Harvard. “It’s important to demonstrate that people care about this issue so much that the status quo is objectionable to them.”

Jess Grady-Benson, an alumni organizer with the Responsible Endowments Coalition, a nonprofit working to set up funds for student groups on different campuses, calls the strategy a “financial petition.” “As a tactic standing alone, it is fairly ineffective,” she says. “But it can be a very powerful extra point of pressure from a different angle.”

This is possible now, in part, because there are more mainstream investing options that specifically avoid fossil-fuel stocks, like Trillium Asset Management, the Aperio Group, and Portfolio 21. The Harvard fund, for example, will invest in BlackRock’s new Fossil Fuels Index Series, launched last year in collaboration with the Natural Resources Defense Council and FTSE Group.

One question is how much money needs to be raised to contribute to a convincing case. After all, raising a low amount could backfire when viewed by the trustees of an endowment worth millions or billions. Organizers at Harvard, the school with the largest endowment in the nation at $36 billion, don’t plan to officially launch their fund until they receive at least $5 million in donor pledges, as advised by Bevis Longstreth, a Harvard alum and former SEC commissioner. They will keep raising money until 2025. Already, famous alum including Natalie Portman, Maya Lin, and climate activist Bill McKibben support the cause. (If Harvard divests before 2025, the funds will go to Harvard. If not, they’ll go to nonprofits working on climate change.)

Activists at other schools, like the University of California, where students launched an alternative endowment campaign in the spring of 2014, are just looking to raise what they can within a shorter time frame. So far, they’ve raised almost $10,000 out of a $20,000 goal, with a deadline for California’s Board of Regents to take action by this summer.

“It really isn’t about putting a value to the campaign,” says organizer Emily Williams. “The point we want to get across is that these donors don’t want to give their money to a university that is investing in human rights abuses.” Alumni organizer Grady-Benson, 22, says that it’s more about the number of donors than the dollar amount of the money they raise, and that involving alumni could expand the capacity of the campaign rather than detract from it.

Already one school, Pitzer College in California, where Grady-Benson is an alum, agreed to divest last year after students raised about $12,000 in an alternative endowment fund. But the decision making had less to do with financial calculus and more to do with a moral one, according to a Los Angeles Times interview with Donald Gould, who heads the school’s board of trustees: “My argument was that the importance of aligning our actions with our values as an institution had to take precedence in this case,” he told the paper.

Harvard for now has flatly rejected the case for divestment. “Their position is essentially that the discussion is over,” says Franta. But Divest Harvard isn’t giving up. It engaged in civil disobedience at the Harvard president’s office this year, and is planning another day of action in April. It plans continued escalation. “We’ll see what happens. It’s hard to imagine the Harvard Corporation switching its position,” he says. “On the other hand, divestment is becoming more and more mainstream.” The students are giving the school 10 years to change its mind.