A Student-Run Fund With a Conscience

Haas School of Business students will have the opportunity to balance social consciousness with the profit motive as they manage a new $500,000 socially responsible investment fund, the school announced last week.

Haas MBA and Masters in Financial Engineering students are the first students in the country to be able to manage a fund focused on corporate social responsibility, investing only in companies with socially and environmentally friendly philosophies, said Katherine Brewer, associate director of the Center for Responsible Business.

The program, funded by an initial $250,000 grant from Haas alumnus Charlie Michaels and his wife, Doris, will enable students to start investing when the fund reaches $500,000. The fund will grow with grants from more donors, according to Kellie McElhaney, executive director of the center.

“There are two philosophies behind the program: First, it ties in very well with our mission of training future business leaders to have a social responsibility mindset, and second, it provides them with practical experience in business and investment,” Brewer said.

The center’s directors will select a group of students to manage the fund based on criteria including experience with corporate social responsibility programs, according to the program’s Web site.

The program will begin with five students and expand to 10 as funds grow.

Interested students will be highly encouraged to participate in a new one-unit elective course, “Social Investing: Recent Findings in Management and Finance,” taught by Haas lecturer Lloyd Kurtz.

The class will review eight recent studies of issues in social investing from different academic fields, including management, finance and economics, Kurtz said.

“Over the last 10 years we have ... gotten a lot of empirical studies about what sort of (companies with) corporate responsibility have tangible economic benefits and what do not,” Kurtz said.

Michaels conceived the idea for the fund at an April 2005 Haas conference he attended.

“(Michaels) has always been really interested in the social performance metrics in the investment world and said that he’d be interested in starting an investment student-managed fund focused on social criteria,” Brewer said.

Conversation continued for the next two years, and in the spring of 2007 the grant donation process began.

The program’s debut reflects an increasing trend toward corporate social responsibility, Brewer said.

“I think the field has changed a lot in the past few years and has grown tremendously,” Brewer said.

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