A group of students wants Iowa State to transfer a portion of its investments to socially responsible mutual funds.

The university now chooses investments that maximize profit, even if the funds invest in businesses that have incurred human rights violations, said members of Solidarity, a socialist student organization.

The goal of Solidarity’s Divestment Campaign is to convince ISU administrators to divest the university’s funds, which would transfer 1 percent of its investments to companies that do not engage in discriminatory hiring practices or use sweatshop labor. The campaign is also aimed at steering new investments to socially responsible funds.

University officials said changing the investment criteria to include a subjective term, like social responsibility, could result in lower rates of return.

Warren Madden, vice president of business and finance, said restricting investments could also force university funds to be invested in volatile funds.

Madden said university investment policies are determined by the Board of Regents. For Iowa State to divest any funds, the board would have to change its investment guidelines, he said.

Iowa State has nearly $86 million invested in various mutual funds, said Louis Schanus, Solidarity member and sophomore in food science. These mutual funds invest in companies like Wal-Mart, which is involved in a large sexism lawsuit, he said. Schanus also named CitiGroup and Exxon Mobil as businesses that engage in discrimination. The university does not have a direct say in which companies their mutual funds invest in, he said.

“We’re not trying to point fingers at the university,” Schanus said.

Noah Wiese, treasurer of Solidarity and senior in materials engineering, said he thinks divestment would be supported by the university’s diversity policy. According to a July 1, 2004 reaffirmation of the Iowa State Non-Discrimination and Affirmative Action Policy, Iowa State’s commitment to diversity is part of a larger commitment to help develop a supportive climate for all ISU community members.

“We’d like Iowa State to move its dollars to show they don’t support that kind of thing,” Wiese said.

According to Solidarity’s Web site, the group believes it is hypocritical for Iowa State to indirectly profit from discrimination.

“I don’t associate our investment policies and diversity,” Madden said.

Richard Carter, professor and chairman of finance, said the university has a commitment to Iowans to invest in funds with the highest rate of return.

“To actually make a decision for the people of Iowa on what they feel is socially responsible and what isn’t may be a stretch,” Carter said. “What I think is socially responsible, you may think it’s not.”

He said if socially responsible mutual funds, which have the same risk guidelines as other mutual funds, can be found, he sees no reason why the university could not make the change.

“This is a worthwhile debate and I think it’s one we should have,” Carter said.

Madden said socially responsible funds often have a lower rate of return than normal mutual funds because of the restrictions they place on fund managers. He said socially responsible mutual funds are unnecessary.

“Ultimately, if society believes some company isn’t acceptable, it won’t survive,” he said. “The marketplace will make the determination.”

Solidarity will move forward with the campaign by trying to gain the support of other campus organizations, students, churches and local business, Wiese said. The group hopes to discuss divestment with the university administration by mid-April.

Wiese said the Divestment Campaign project was started by the University of Iowa Campus Greens last semester. Iowa administrators have expressed support for the project and would accept the proposal after it is OK’d by their accounting department, he said.