Bill Overview
Title: Endowment Transparency Act
Description: This bill requires certain actions regarding institutions of higher education (IHEs) and the management of their assets. Specifically, the bill requires the Department of Education to annually update the College Navigator website with information on the assets of IHEs, including information about investments with minority- or women-owned firms. The bill also requires the Minority Business Development Agency to (1) report on recommended changes for substantially increasing the use of minority- or women-owned firms in the investment and bond transactions of IHEs, and (2) convene a conference every five years.
Sponsors: Rep. Cleaver, Emanuel [D-MO-5]
Target Audience
Population: people associated with institutions of higher education and minority- or women-owned investment firms
Estimated Size: 30000000
- The bill aims to increase transparency in the investments of higher education institutions.
- The financial operations of higher education institutions have direct implications for students, faculty, and staff who rely on these institutions.
- Institutional investors, especially minority- and women-owned investment firms, will be newly included in investment reporting, affecting their business opportunities.
- Increased visibility into investment practices can impact decisions about where students choose to attend.
- The Minority Business Development Agency’s involvement highlights a focus on improving diversity in business transactions.
Reasoning
- The target population includes individuals associated with institutions of higher education and minority- or women-owned investment firms.
- Given the diverse population involved, it's expected that there will be a broad spectrum of impacts, from noticeable benefits for minority- or women-owned investment firms to lesser impacts on students.
- The budget limits the scope of outreach and monitoring initially, but the focus on transparency may lead to a long-term cultural shift in investment practices.
- There are over 20 million students and 4 million faculty and staff potentially impacted by the policy, besides numerous affiliated businesses.
Simulated Interviews
University Finance Administrator (Boston, MA)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I believe transparency is always a good thing. It helps us make better decisions on managing funds.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 5 |
College Student (Los Angeles, CA)
Age: 20 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- I didn't know much about how the university manages its funds, but it's interesting to see where the money goes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Investment Firm Manager (New York, NY)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could open more opportunities for small firms like mine. It's exciting to potentially work with colleges.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
University Professor (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- The policy supports accountability, which can lead to better decisions benefitting students and faculty alike.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Data Analyst at a Minority-Owned Finance Firm (Austin, TX)
Age: 29 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 5/20
Statement of Opinion:
- It's encouraging to see potential growth in clientele from the education sector due to this act.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Retired University Trustee (Atlanta, GA)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- This bill seems overdue, but it's a positive change towards inclusivity and accountability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
College Admissions Counselor (Miami, FL)
Age: 33 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- Increased transparency might influence students' decisions positively when choosing a college.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 5 |
Student Intern at a Women-Owned Investment Firm (Durham, NC)
Age: 22 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- Working in a women-owned firm, I see direct benefits. This policy is a step forward for diversity in finance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Director of Sustainability at a University (Seattle, WA)
Age: 42 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- Transparency in investments could align with our sustainability goals by promoting responsible investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Head of Financial Aid at Private College (Denver, CO)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- Further transparency can help us reshape financial strategies to aid more students equitably.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Cost Estimates
Year 1: $15000000 (Low: $12000000, High: $18000000)
Year 2: $13000000 (Low: $11000000, High: $16000000)
Year 3: $13000000 (Low: $11000000, High: $16000000)
Year 5: $14000000 (Low: $12000000, High: $17000000)
Year 10: $15000000 (Low: $12000000, High: $18000000)
Year 100: $17000000 (Low: $14000000, High: $20000000)
Key Considerations
- The extent of cooperation by institutions in providing detailed and accurate asset data.
- Potential resistance or administrative burden experienced by IHEs due to increased reporting requirements.
- The capability and readiness of the Department of Education's IT infrastructure to manage additional data inputs and analytics.
- Cultural and structural changes required within IHE financial operations to accommodate increased transparency.
- Impact on the investment decision processes should public transparency lead to different assessment metrics or criteria.