Investment Policies and Regulation
The Board of Trustees is responsible for the endowment, just as it is responsible for Santa Clara University as a whole. The Board of Trustees delegates its oversight to the Investment Committee and the vice president for finance and administration, and delegates the day-to-day management of the endowment to the Investment Office. The Investment Office manages the endowment within the guardrails and philosophy as laid out by the Investment Policy Statement, which is approved by the Board of Trustees.
Among other things, the Investment Policy Statement stipulates that endowment investments:
- Focus especially on stocks, including private assets that have 10- to 15-year fund lives.
- Maintain a diversified pool of assets (bonds, real estate, alternative investments) with specific roles in the portfolio, to ensure strength in various economic environments.
- Plan for prudent levels of risk and the ability to withdraw funds in a timely manner as needed (liquidity).
The SCU Investment Committee has full transparency into the holdings of the endowment. The board’s Investment Committee and the University’s vice president for finance and administration are updated quarterly on overall performance. Publicly, the University shares the endowment’s broad asset allocation and investment returns.
2023 Asset Allocation Target
Changes in Investment Policy
The role of the endowment is to manage and grow the assets entrusted to the University, ultimately for the benefit of current and future generations of students and faculty, consistent with our educational mission.
Periodically the Investment Office receives inquiries about making changes to investments in response to global issues or events. If the University leadership is presented with cause to consider a change to our investment policy, it has the option to convene a subcommittee of the Investment Committee, the Socially Responsible Investing Subcommittee, to weigh the pros, cons, and impact of changing its policy in any way, including divestment.
Changes to the investment methods and investing policy are made very infrequently, and with great deliberation and thought by the Investment Committee and the Board of Trustees in consultation with University leadership.
The Investment Office has made presentations over the years for different groups of students, faculty, staff, and alumni across the community. We continue to embrace opportunities to provide a fact-based understanding to all our stakeholders about the Santa Clara endowment.
Socially Responsible Investing (SRI) and Other Guidelines
One element of SCU’s approach to SRI is “impact investing.” Impact investing refers to investments that have both a financial return and a beneficial impact to society. The Investment Office seeks out and invests in opportunities that can provide such “double duty,” such as companies facilitating the transition to carbon-free energy. Such investments must meet the same risk, return, and liquidity criteria as any other investment.
Corporate responsibility and the University’s values are reflected in the investment process. The endowment office avoids investments in corporations that consistently practice forms of racial, ethnic, religious or gender discrimination, or have a track record of gross ecological violations, for example. It is not our practice, however, to purchase or divest from assets based on world events.
The endowment is also regulated by federal law, the Uniform Prudent Management of Institutional Funds Act, which protects the assets of nonprofit institutions from misuse or loss and sets rules for modifying donor restrictions, among other things.