In January, Missouri Representative Emanuel Cleaver will introduce the Endowment Transparency Act to Congress, a move that could, quite frankly, change everything.
Cleavers proposed legislation seeks to amend the Higher Education Act of 1965 to require universities and colleges to share information about how and whether they allocate investment funds to women-owned and minority-owned businesses. These higher education institutions, which collectively manage more than $821 billion in assets been notoriously mysterious about what they invest money in and, despite calls for change, many have refused transparency.
“It was noble to desegregate a student body and faculty, but it is more noble to desegregate economics because those are reasons why things are the way they are.” Representative Emmanuel Cleaver
Educational giants play a vital role in the venture market as limited partners. businessroundups.org previously reported on the urgent need for those at the top to take greater responsibility for the unequal corporate landscape that disproportionately excludes women and people of color. Those calls have turned into a call for more diverse fund managers and more money invested in minority-led funds — or at least criteria that hold LP’s responsible venture partners accountable for the kinds of companies they invest in.
Distressing statistics about the number of diverse fund managers, coupled with the lack of capital allocated to minority fund managers and founders, is an indication of the role endowments can play in perpetuating existing inequalities. Speaking to businessroundups.org, Cleaver said when he tried to reach out to higher education institutions to discuss their hesitant behavior regarding diversity and asset allocation, even he had closed doors in his face at times.
“These colleges brag about inclusion because they have minorities on their faculty and an inclusive student body, so they think everything is fine,” he said. “But let me just say, it was noble to desegregate a student body and faculty, but it’s more noble to desegregate economics because they are reasons why things are the way they are.”
