Divestment FAQ

Q: What happened with divestment?

Answer: The Western Washington University Foundation Governing Board of Directors on Sept. 16 decided not to change its investment policy regarding divestiture from investments in fossil fuel companies. The WWU Foundation Governing Board’s decision was in response to a request by the Western student government.

Dan Guy, president of the WWU Foundation Governing Board, provided a memo to Annika Wolters, president of the WWU Associated Students (AS), which outlined the review process and a recommendation from the board’s Divestment Study Committee for a decision on the request from the AS. The recommendation was voted on and approved at the board’s Sept. 16 meeting. The final decision was to reject the request on the grounds that divestment is not consistent with the Foundation’s mission: by inspiring our community to give, the WWU Foundation secures and stewards resources to advance scholarship, research and creativity. It is in what the Foundation is able to fund, not how it invests, that most tangibly advances Western’s mission and delivers on its own mission.

Given the interests of its stakeholders, the Foundation decided to pursue the creation of a climate-friendly investment fund as an option for future donors. And, to lower associated fees, WWU Foundation Governing Board members and staff will lead discussions of climate-friendly portfolio development with other foundations of similar size and type.

The full text of the Divestment Study Committee memo is here  President Shepard also wrote a blog discussing the issue and expressing his support for the Western Washington University Foundation position.

In the memo, the Divestment Study Committee noted that climate change is “indisputably one of the most critical challenges of our time” and acknowledged Western students for stimulating discussion. “Their request to us spurred a thoughtful and thorough approach and analysis. We listened to students and campus colleagues, explored the national discussion, spoke with our peers across the country, and researched investment alternatives. From this work we reached a considered recommendation: our investment policy should remain unchanged.”

Q: Why did the Foundation decide to keep its current investment policy?

Answer: Primarily the Western Washington University Foundation Governing Board decided that, given its mission, that it is in what the WWU Foundation funds, not how it invests, that most tangibly supports the university, and keeps the WWU Foundation in its role. The issues are complex, and so are the financial costs surrounding divestment. The Western Washington University Foundation Governing Board concluded that divesting is not consistent with its fiduciary values. The financial impact of divestment, including associated fees, could mean the loss of potential scholarships for students and support for faculty and university programs. The Foundation uses an investment structure that includes multiple funds that are available based largely on the size of the WWU Foundation asset base. A single fund often includes hundreds of companies, bundled together to produce returns on the assets invested. Within each fund there may be companies associated with fossil fuels. In order to divest from specific companies, it would mean pulling out of the entire fund. The WWU Foundation’s current structure, using pooled investment funds, meets WWU Foundation investment needs with reasonable cost.

Q: What is the relationship of the WWU Foundation and Western?

Answer: The Western Washington University Foundation exists to generate private support solely for the benefit of Western Washington University. As a private 501 (c) 3 non-profit organization, it is independent of the university and its Board is comprised of alumni, donors and community member volunteers who are personally dedicated to the advancement of Western. The WWU Foundation secures and stewards resources that enhance scholarship, research and creativity. Fundraising priorities are determined by the university in an ongoing process.

Q: Western has a strong green image. How does this decision work with that?

Answer: Western President Bruce Shepard, in his blog, expressed his support for the WWU Foundation position. “Basically they decided to ‘stay in their lane.’”  Addressing the university community, he went on to say, "Do understand this, though: by ‘staying in their lane,’ the Foundation has placed an enormous responsibility with us, the students, faculty, staff, administration, alumni, and donors who are Western Washington University.  That is exactly where it belongs."

Noting the long history of commitment to sustainability at Western, President Shepard did challenge the campus, saying "But, that proud past is prologue. For the rapidly escalating threats of climate change demand that we double and double again our efforts to live our mission, to make substantive differences, to be substantively different."

The Western Washington University Foundation Governing Board did commit to create a climate-friendly investment fund in their portfolio as an option for donors. The WWU Foundation Study Committee memo recommended that the WWU Foundation Governing Board Finance and Audit Committee “work to create a climate-friendly investment fund in our portfolio as an option for donors. And, to lower associated fees with this fund, we further recommend that the WWU Foundation Governing Board members and staff will lead discussions of climate friendly portfolio development with other foundations of our size and type.”

Q: How long has the WWU Foundation Governing Board been considering this issue?

Answer: The question of divestment of endowments from fossil fuels continues to be in the national news conversation.  The Associated Students Board asked the WWU Foundation Governing Board on May 16 to commit to a specific fossil fuel divestment plan. The exact request was: “The Associated Students of Western Washington University urge the Western Washington University Foundation Board of Directors to freeze all further investments in fossil fuels by the end of 2014, and to divest within five years from the top 200 fossil fuel companies that together own the majority of known fossil fuel reserves. The AS also requests that an amendment be made to the WWU Foundation Endowment Investment Policy under clause 2.8, regarding Social Responsibility, to prohibit future investments in companies that extract fossil fuels (additional to the present restrictions on alcohol and tobacco).” Please note that the current WWU Foundation investment policy does not have any restrictions on alcohol and tobacco.

• The WWU Foundation Governing Board worked with the Associated Students to gather several students for a listening session to fully understand the students’ viewpoints.  The listening session was held on campus on June 3, 2014.
• During its mid-June meeting, the WWU Foundation Governing Board implemented and pursued a methodical process allowing them to reach a considered decision.
• WWU Foundation Governing Board members gave careful consideration to campus and national conversations around divesting endowments from specific fossil fuel companies, as well as a full appreciation for Western’s AS requests.