What could be better for universities during budget-strapped economic times than an investment with a median average return of 32 percent annually?
That’s the thinking behind many campuses efforts to place their money into revolving green funds—and why the Sustainable Endowments Institute launched a challenge this week to help move universities in that direction.
The funds are invested in sustainability projects that reduce carbon emissions and energy use, lowering school’s utility payments, and those savings are then reinvested in more sustainability initiatives. The effort creates a cyclical saving mechanism that The Greening Bottom Line has measured at an annual return of 32 percent.
“It’s not a universal silver bullet for all budgetary issues, but I mean, one of the key things these revolving funds do is they remove the sort of burden of these energy efficiency projects from the operating budget,” said Mark Orlowski, executive director of Sustainable Endowments Institute. “Many schools currently think about these new projects as expenses, and so they put them in their operating budget or the capital improvement budget and they’re basically spending money they’re not going to get back.”
The challenge, which encourages universities, colleges, and non-profits to invest a total of $1 billion into the revolving funds, launched on Tuesday at the Association for the Advancement of Sustainability in Higher Education conference in Pittsburgh. A handful of schools—Harvard, Stanford, Arizona State, Caltech, Dartmouth, George Washington, Middlebury, the University of British Columbia, and Weber State University—have already pledged money to the campaign.
Universities that agree to the challenge will have access to services provided by an advisory council, including technical and fund management assistance. The Billion Dollar Green Challenge has also garnered support from several foundations.
“There’s a lack of awareness and education about this model, and that’s one of the main things we’re hoping to change in launching this challenge,” Orlowski said. “Really put this revolving fund approach on the radar of college university presidents and trustees and senior administrators all across the country.”
Learn more about the Billion Dollar Green Challenge at greenbillion.org.