"Green revolving funds invest in energy-efficiency upgrades and projects that decrease resource use, thereby lowering operating expenses," says the report, Greening the Bottom Line. "These operational savings are returned to the fund and then reinvested in additional projects."

Based on a survey of institutions in the United States and Canada, the report found that 90 had some kind of green fund, but only 52 of those had funds that could be defined as revolving funds--in which the operational savings are returned to the fund to pay for future sustainable initiatives.

Many non-revolving funds help improve campus environmental performance, the report says, but "they do not provide two distinct advantages of GRFs."

"A fund with a robust revolving function...seems more likely to become an integral and permanent source of ongoing capital for sustainability projects," the report says. "...Second, the revolving feature requires tracking the performance of specific projects and of the fund as a whole."

Of the schools surveyed, Western Michigan University in Kalamazoo had the oldest GRF--its fund was founded in 1980. But only 10 schools said they had established GRFs before 2008. From 2008 to 2011, among those institutions in the survey, the number has more than quadrupled.

Those with GRFs are a diverse group: 24 are public, and 28 are private. Some schools are large private institutions (Yale, Stanford) while others are small liberal-arts schools (Allegheny (Pa.) College, College of Wooster (Ohio)). The endowments at the schools with GRFs range from the $27.6 billion at Harvard University in Cambridge, Mass., to the $7.6 million fund at Lane Community College in Eugene, Ore.

"A lack of institutional wealth does not appear to be a barrier to GRF formation,” the report says. "Indeed, the majority of institutions with GRFs have an endowment-per-student value of less than $50,000."

The study found that GRFs fall into three general categories:

• Efficiency funds. Money is provided for measures that save energy and/or water. "Efficiency funds tend to expect a relatively short payback period and are typically not used to engage the broader campus community," the report says.
• Innovation and engagement funds. These explicitly seek community engagement and ideas for projects, the report says. "These funds are generally administered by a committee and often include significant student participation."
• Hybrid funds. This category represents most of the funds identified in the survey. "They fund efficiency and conservation, but also may finance a wider range of projects such as renewable energy development, solid waste diversion and reducing use of materials such as paper," the report says.

The survey found that the most frequent champions of efforts to establish green revolving funds are administrators on campuses. Students also are early supporters of such initiatives on many campuses.

The size of most of the funds identified in the survey is modest, the report says. Of the 44 institutions that reported the size of their funds, the median fund size was $170,000, and the smallest fund was $5,000.

The question of how the GRFs perform financially is difficult to extrapolate because so many funds have been established only recently. But the report did look at two longstanding funds--Western Michigan and Harvard. Western Michigan said its fund had supported 101 projects and had a return on investment of 47 percent. Harvard’s Green Loan Fund, established in 2001, reported an average return on investment of 30 percent as of October 2010.

The 50-page report is online in PDF format at http://www.greeningthebottomline.org/

Source: >The Baltimore Sun

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