Information about tuition price, Marquette’s endowment fund and socially responsible investment was provided in a session hosted by the Office of Finance and Marquette Student Government on Sept. 21.
University Vice President of Finance Chuck Lamb and Chief Investment Officer Sean Gissal spoke at the session, which was done to prepare for a similar presentation that will be given to the Board of Trustees on Sept. 24.
Lamb started the session by talking about how the nationally rising cost of higher education. He said the four components driving tuition up are 24/7 operations, building maintenance, technology and compliance to federal and state agency regulations.
Student tuition payments help Marquette operate on a daily basis. Lamb said the majority of tuition goes toward compensation and financial aid. He added that three cents of every tuition dollar covers academic administration, including professor salaries.
Gissal spent most of the presentation explaining why divestment is a last resort. During the last MUSG senate meeting of the spring 2015 semester, legislation that did not include any form of the word “divestment” was passed, clashing with a student group’s demands.
“The issue is expressing whether divestiture is the most effective,” he said. “Divestiture was more effective in the past.”
Gissal said activism is more effective now in today’s age of communication.
Last semester’s passed legislation includes socially responsible investment (SRI), an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.
In response to that legislation, the Office of Finance presented its activities to an audience of about 25 students in an effort to be more transparent.
Donations are another source of university income. The endowment fund is a byproduct of donor gifts but comes with restrictions set by the donor. Gissal presented a slide that broke down a broad spectrum of those restrictions and how the money is spent.
Scholarships receive 46 percent of the endowment fund and academics receive 37 percent, according to the slide. The remaining 17 percent goes toward a category titled “operations and other,” which includes expenses for campus beautification, landscaping and award plaques.
Unrestricted donations in the endowment fund are invested when approved by Marquette’s investment policy.
To guide investment decisions by Jesuit values, Marquette uses five target companies approved by the Wisconsin Province. The university also follows the three U.S. Conference of Catholic Bishops principles: do no harm, active corporate participation and positive strategies – also known as promote common good.
Gissal said when Marquette invests in a company there is no screening on the front-end. Instead, investment managers hired based on ESG criteria are responsible for screening. ESG is a methodology that picks businesses with sustainable and environmentally-friendly factors in their models.
“We have guidelines for investment managers but do not have guidelines for individual companies as it pertains to SRI,” Gissal said in an email.
After Thursday’s presentation, Gissal said he hopes the Board of Trustees will update the investment policy statement to reflect SRI language.
