The Foundation and Sudan

I am writing in response to the thoughtful editorial, “Take a STAND for ethical investments.” As president of the IU Foundation, I work with the board committee that manages the endowment, which provides scholarships, fellowships and faculty and other support for schools and programs on campus.

The Investment Committee examined the divestment question at its meeting in February. The committee takes seriously the grave situation in Darfur, as well as its legal and fiduciary responsibility to manage the endowment to provide current and future income for IU. In weighing these competing priorities, the Committee determined that it agrees with STAND’s position on Darfur but also believes that any possible benefits of divestment do not outweigh the more likely negative effects of managing the portfolio under a more restrictive set of guidelines.

In exchanges with student leader Rebecca Burns and faculty adviser Steve Weitzman, I offered to explore other ways the Foundation could address the issue. These are their suggestions and our responses:

1. Direct investment: The Foundation currently has no direct investments in companies headquartered in or conducting their primary business in the Sudan and will not have any in the future.

2. Constructive engagement: Through outside managers, Foundation assets have been invested on a limited basis in companies that appear on some lists; IUF may have indirect exposure through ownership of stock in multinational corporations doing business in the Sudan.  We will commit to communicating our concerns to offenders. 

3. Ethics committee: Because the Foundation is a complex organization responsible to multiple constituencies, ethical questions do arise in the course of our business. An ethics committee could consider issues, such as divestment, that require thoughtful choices. I will bring the matter to our board in June.

I appreciate the forthright and responsible way in which the divestment issue has been brought to our attention and the commitment of the students and faculty to addressing the terrible situation in Darfur. The dialogue continues.  

Gene Tempel
President, IU Foundation