UCSD Student Foundation Invests Student Donations in Wells Fargo, Oil, and Defense Contractors

The UC San Diego Student Foundation is known for funding tens of thousands of dollars worth of student scholarships. During the 2017 fiscal year, the Student Foundation received $60,000 in donations from 1140 donors. What most student donors do not know, however, is that Student Foundation manages an endowment portfolio with investments in oil, finance, and defense companies that have been at the center of different divestment movements across the UC.

In the fine print, at the bottom of donation pledge cards, the foundation does note that a portion of donations made may be added to the Student Foundation Endowment Fund, but its marketing materials and website make no mention of its investments in Wells Fargo, Conocophillips, and Boeing. The endowment portfolio holdings are not published publicly through the Student Foundation or UCSD Foundation’s website.

“Transparency is something we have been trying to improve upon the past few years,” said Student Foundation Vice President of Investment Omar Khatib. “We do not have a page for the investment committee yet, and once that is up our records should be up there.”

The Student Foundation is a student-run philanthropic organization that was founded in 1999 with a $100,000 gift from alumni Marc and Patricia Brutten, and it operates under the university’s private donation fundraising organization, the UCSD Foundation. The Student Foundation’s philanthropy centers around raising money for student scholarships and other student needs, including the Triton Food Pantry, academic departments, athletics, and undergraduate colleges.

As of Sept. 30, 2017, the endowment, which is used to grow funds for scholarships, totaled $705,872, having grown by over $150,000 since 2014. Typically, 50 percent of a donation designated towards student scholarships goes towards scholarships for that school year, while the remaining 50 percent is invested in the endowment fund. Funds from the endowment are only removed to fund scholarships, so 100 percent of donations designated towards scholarships are spent on scholarships.

There have been discussions about ethical investments in companies that are aware of their social responsibilities. Student Foundation Vice President of Investment Omar Khatib emphasized that, at the of the end of the day, the Student Foundation has the final say on what is included in the endowment’s investment portfolio, and investment decisions are tied directly to the mission set out by the organization’s membership.

“I feel that one of the things we [the UCSD Student Foundation] prioritize above all else is investing in companies with the highest returns to allow the most amount of people to attend UC San Diego through our scholarships,” said Khatib.

Endowment holdings include companies that have been targeted by student-led divestment movements throughout the UC system.

Approximately 5 percent of the endowment is invested in energy companies, including companies dealing with fossil fuels. In 2017, students across the UC pressured the UC administration to divest from fossil fuels. Students at UC Santa Barbara staged a 60-hour sit-in at the administration complex, prompting UC Santa Barbara Chancellor Henry T. Yang to endorse fossil fuel divestment. Four UC Chancellors, including UCSD’s Chancellor Pradeep Khosla, have all publically endorsed fossil fuel divestment.

Approximately 3 percent of the endowment is invested in Wells Fargo and Company. Earlier this year, the UC terminated $475 million in Wells Fargo contracts after continued pressure from the Afrikan Black Coalition (ABC), a black student collective. ABC demanded divestment from Wells Fargo based on the bank’s investment and support of private prison corporations, and its continued discriminatory actions towards African American and Hispanic borrowers. The UC cited the bank’s creation of millions of fraudulent bank and credit card accounts as cause for termination of the contracts.

Approximately 4 percent of the endowment is invested in Boeing Co, an aerospace and defense manufacturer. Boeing, the world’s second largest defense contractor, was cited as one of 11 corporations in a 2015 UC Student Association resolution calling for divestment from corporations in violation of Palestinian Human Rights.

“It baffles me that there is student space and organization that we are not holding to the same standards [that the] administration has been held to,” said ASUCSD External Vice President, Refilwe Gqajela. “If the idea is we’re helping struggling students, I think it is completely opposed to the principles.”

Mo Elew is a staff writer at The Triton.

Correction 12/5, 1pm: This article previously noted he amount of donors on Giving Tuesday as “11,400.” The actual number is 1140.