Recession is the Mother of Invention: Innovative Ways Campuses Are Coping with the Financial Crisis

As Van Jones put it in The Green-Collar Economy, “the bottom fell out” of our economy last year. The seizing credit market has reverberated across all sectors of society, hitting the already struggling higher education community with force. As legislators make hard cuts to their budgets, education administrators hunker down on campus spending, particularly when it comes to so-called “luxury” sustainability programs. To compensate, student organizers and campus sustainability professionals are turning to new funding sources to implement vital campus sustainability initiatives.

Thankfully, unlike fossil fuels or the stock market, the ingenuity of passionate students and their campus allies is apparently an inexhaustible and reliable resource. I’d like to highlight a few of the ways campuses are pushing forward on the University President’s Climate Commitment and other sustainability plans they’d envisioned before their endowments and budgets took a hit.

Green Fees

One of the simplest ways students are taking sustainability matters into their own hands is by raising their own fees. While you might think that additional taxation wouldn’t be the most popular topic on campus, to my knowledge there has never been a proposed Green Fee that wasn’t approved by students — over 50 campuses now have them.  In fact, only higher-up administrators have blocked green fees, such as the case at University of Tennessee in 2004. (Don’t worry too much- the students at UTK prevailed after a year of protesting and negotiating.)

As an undergrad I helped lobby for a fee increase called The Green Initiative Fund, which raised UC Berkeley fees $5 per student per semester via student government elections.  After passing with 69% of the vote, TGIF now pulls $200,000 per year into a revolving sustainability fund overseen by a student-majority committee. To date, TGIF has funded a campus energy monitoring system that’s paving the way for increased energy reductions, a native plant nursery on campus, and sustainability-focused student internships. The idea has spread to over 25 other campuses over the last 3 years.

Revolving Loan Funds

For students with a knack for finance, Revolving Loan Funds are a desirable option because they actually make money over time, meaning even the up-front seed capital to start them can actually be paid back as a loan to the administration. RLFs work by capturing the savings generated by a sustainability project to repay the seed money, and then funnel the rest back into future projects. For example, after an energy efficiency project is implemented (such as a CLF light bulb swap), the university would see an immediate 30% reduction in energy costs in the building; however, they agree to pay the pre-retrofit energy bill rate for the next 4 years, with the savings deposited into the Revolving Loan Fund and then directed towards, say, better-insulated windows. RLF’s can start with a small amount of cash, increase over time, and significantly lower the overall operating budget of a university.

Harvard University, Macalester College, Carleton College and others all have outstanding Revolving Loan Funds that are earning not just revenue but prestige, higher recruitment rates, and increased development opportunities. Carleton got its seed funding via the equivalent of looking for loose change in their couch cushions — students performed a financial audit of their student government and discovered $35,000 of unused funds that had been sitting in an obscure account for years.

These funds can grow at an amazing rate. Maclester College’s Clean Energy Revolving Fund was started by students working with faculty, staff, and alumni with an initial grant of only $700. After implementing pilot projects in building insulation, water conservation, and appliance efficiency, completing a full-campus retrofit of four-foot fluorescent bulbs, and earning some grant additions from administration, the fund now totals $102,000 after three years, and CERF has become the pride and joy of the campus. More importantly, CERF has helped change the campus mindset, reframing sustainability as a smart investment, as well as an imperative.

Additional Funding Methods

Of course, these are only two strategies. The funding toolkit I published this fall, titled “Raise the Funds” (aimed at student organizers and administrators), covers five other mechanisms beyond green fees and RLF’s that universities can employ to get large-scale sustainability initiatives off the ground. These include alumni funding, energy-service companies, and endowment money, among others. As money gets harder to find, we will have to become financial innovators as well as campus sustainability gurus.

The revolution of student-initiated Green Fees and Revolving Loan Funds is more than just a means of funding. It’s new paradigm of student organizing. Rather than students acting as an outside lobby group that calls for internal change from their administration, students are recognizing and embodying their new role as thought-leaders, decision-makers and change-makers on their campus and in the world. The instigators of these transformative projects are inspiring and empowering their own generation of young leaders, who are transforming their campuses into models of sustainable innovation for the country.

Rachel Barge is director and founder of Campus InPower, a non-profit consulting firm specializing in innovative financial mechanisms to support on-campus sustainability. She is a winner of the David Brower Youth Award, Wild Gift Fellowship, Morris K. Udall Fellowship, and World Wildlife Fund Environmental Leadership Award.  As an undergraduate, Rachel co-created The Green Initiative Fund at UC Berkeley, a 10-year, $2 million student fee-based revolving loan that enacts large-scale energy, infrastructure, and sustainability upgrades to the campus. Her program, Campus InPower, provides resources to help other colleges with similar initiatives.