Many colleges and universities are under pressure from Congress to reveal the investments they have made using their endowments, according to the Associated Press. Most institutions, however, aren’t budging.
The push comes from federal lawmakers determining whether or not to tax colleges on their investments, as well as students and alumni who just want to get a clear picture of how their money is being spent.
“People are concerned,” Rep. Tom Reed, a Republican from New York, told the AP. “We just don’t know where the money’s coming from and where it’s going. I think that transparency will go a long way to clean up some abuses in this area.”
Universities are granted endowments in order to help those students who are less well-off financially by providing them with financial aid packages. Many of these institutions are refusing to disclose their investments because they would rather not face scrutiny from the public regarding what they are actually investing in, fearing they won’t be able to make as much money.
Richard Smith, a finance professor at the University of California Riverside has done research on endowments, and told the AP that “sometimes, there’s a value in keeping your investment choices secret.”
He may or may not be right, considering that some schools have had to drop investments after coming under fire for them. In 2014, Harvard provoked student protests and outrage across campus for investments in the timber industry. Another group of students at Hampshire College just want to be assured that none of the money is being used to support prisons.
In any case, transparency is not necessarily in the best interests of most institutions, so it’ll be an uphill battle trying to get them to come clean about what exactly they’re investing in.