Your Turn, NH: UNH cannot afford to play politics with its endowment
Last semester, the University of New Hampshire's chapter of the Student Environmental Action Coalition (SEAC) pressured the university administration to divest UNH's endowment from fossil fuels. SEAC presented petitions, held a modest demonstration and issued opinion pieces. In its passion to see the environment protected, it seems SEAC has overlooked a plethora of serious financial problems that the university is facing.
According to the Department of Education, UNH is the fourth most expensive public university in the United States. In fact, the average debt of a UNH graduate is $32,440. If not for the scholarships, which derive funding from the university's comparatively modest endowment of $125 million, the cost of tuition on this campus would be significantly higher, prohibitively high for some.
It would appear as though UNH students advocating for divestment from fossil fuels have not given adequate consideration to the financial repercussions of that action. The president of SEAC at UNH wrote in a student newspaper op-ed column that, "two months ago, five UNH students met with some of the most senior-level administrators of our university to discuss the possibility of divesting the endowment from fossil fuel corporations, and reinvesting in socially and environmentally responsible companies." However, she never addressed which "socially and environmentally responsible companies" would bring our endowment similar returns on its investments.
This omission in SEAC's proposal is hidden behind emotional appeals and ambiguity: "UNH cannot continue making all of its decisions only considering what is profitable instead of what is ethical." But how is it ethical to sacrifice the opportunities of some for the beliefs of others?
Investments are made with the sole purpose of gaining the greatest possible returns, and that is the guiding objective which UNH uses in managing its portfolio. As soon as we stray from that goal, we lose the only reasonable standard by which a small group of people can make decisions about finances affecting a large group of people.
As UNH Economics Professor Neil Niman was quoted in The Portsmouth Herald: "Let's say the average UNH student leaves with $36,000 in debt. The university says, 'We can divest ourselves, but this is going to cost us X return on investment, so we can't give out as much financial aid.' So instead of $36,000 in debts, students are going to have, say, $40,000 in debts. I'm not sure most students will take that on in order to promote this value.'"
Niman likened the reliance on exchange traded funds by most endowment funds to shopping at Walmart. "Well-intentioned people want to keep Walmart out, but the fact is, some people have to shop there because they need to save money. How can you say you're not going to allow certain people to do what they want to do in order to subsidize your values?"
Finally, SEAC's proposal overlooks the fact that, in a democratic society, others hold convictions that are just as deeply rooted as our own. For instance, what if a student organization morally opposed to contraception wished to divest the university endowment from businesses which provide their employees with health care plans that cover contraceptives? If the fossil fuel divestment is pursued, this new precedent would require that the university assess such a request based on its merits and the personal beliefs of a small group of people, rather than dismissing the claim on the basis that investments are made in order to maximize returns.
Late last semester, University President Mark Huddleston agreed to meet with SEAC leaders on Jan. 29 to discuss the matter of divesting the university endowment from fossil fuels. Given President Huddleston's reputation for strong leadership, one hopes that he will use this meeting to explain why such a move would be inappropriate. Otherwise, it will be difficult to make the case that the University of New Hampshire uses its financial resources wisely when the administration inevitably asks the state Legislature to restore university funding to $68 million this spring.
UNH just can't afford to play politics with its endowment.
Nick Mignanelli is a senior political science major at the University of New Hampshire.