The Summit’s theme is transforming energy efficiency upgrades from expenses to high-return investments, focusing on how colleges and universities play pivotal roles in reducing greenhouse gas emissions. To register for the event, please email conference@greenbillion.org. More information, including the conference agenda, can be found at here.

The green revolving fund model helps colleges and universities finance urgently needed energy efficiency upgrades on campus. However, many schools face challenges in designing, implementing, and managing revolving funds. This webinar draws on the direct experience of administrators from schools with revolving funds, and from AASHE and SEI’s new publication: Green Revolving Funds: An Introductory Guide to Implementation and Management.

This webinar will include an overview by the Guide’s lead author, Joe Indvik, Consultant at ICF International. Susan Kidd, Director of Sustainability at Agnes Scott College, and Matt O’Keefe, Campus Energy Manager at the University of New Hampshire, will also present on how their fund implementation process was conducted and how the insights in the Guide can be helpful to other schools looking to start green revolving funds. The webinar will be moderated by Judy Walton, Chief Publications Officer at AASHE. Topics covered include sourcing seed funding, making the business case for a revolving model, auditing and identify projects, and measuring and verifying energy and cost savings.

Click here to register, and for more information email info@greenbillion.org.

Water efficiency projects are a natural fit for a green revolving fund (GRF) as they provide tangible environmental benefits and can have quick paybacks. Even smaller-scale projects such as installing low-flow showerheads, toilets, and faucet aerators in bathrooms or setting up water bins to collect rainwater for campus gardens can have big impacts. Schools like the University of Southern Maine, Harvard University, and Bethany College (Kansas) have already devoted some of their GRF funding to projects that conserve water.

Last year, the University of Southern Maine spent $17,000 from their Revolving Green Fund to upgrade over 300 showerheads in student dorms. These higher-efficiency showerheads reduced water use from 2.6 to 1.5 gallons per minute, as well as the amount of natural gas needed to heat the water. The project was paid back with cost savings in a little over four months, and is saving the University over $48,000 per year or around $200 a day. William Dunlay, the Director of Energy and Utilities at USM, says that the cost savings have actually increased since the project’s completion due to recent spikes in natural gas prices. This project’s environmental benefits are also impressive, with over three million gallons of water saved per year.

Harvard’s Green Loan Fund used a small portion of their $12 million fund to purchase high-efficiency toilets and waterless urinals. The water-saving equipment, which was installed in in three academic and administrative buildings in 2008, cost the fund $34,000. With a 37 percent return on investment and 2.7 year payback, the project has saved over 210,000 gallons of water each year since installation.

Grand Valley State University (Michigan) used a GRF loan to reduce plastic water bottles by installing 14 water stations on campus. The stations have removed 20,000 bottles from the school’s waste stream.

While many infrastructure changes at a university can save water, some schools focus on changing the behavior around consumption. The Bethany College Green Fund, for example, funded seven ‘hydration stations,’ or water bottle refill stations, through a GRF loan. Bethany’s student activities board gives out water bottles to the student body every year, which students can use at the new stations.To raise awareness of water use, the hydration stations measure the amount of water that users consume, a figure that Bethany tracks at an average of 5,101 liters per month. This equates to thousands of plastic bottles not used on the Bethany campus each month and more than 10,000 liters of water not used in the production of the plastic bottles. Students also benefit by saving money not spent on buying bottled water, a cost savings that Bethany uses to justify a 1.4 year payback.

“We chose this project as the first one to fund from our green revolving fund because it would impact students in their daily lives and would make the revolving fund more visible,” says GRF committee member and Bethany’s Campus Pastor Noni Strand, whose committee also advertises the GRF above the water refilling stations to promote the fund. “Water is becoming a limited resource in Kansas. People think we can keep using water and it will always be there, but it is becoming a huge issue.” Due to the area’s recent water scarcity, the grounds crew at Bethany has also taken some steps towards water conservation and recently removed some campus flower beds in favor of vegetation that is less water-intensive.

The potential for water conservation projects remains a largely untapped area for investment through the GRF model, but with the development of the Green Revolving Investment Tracking System (GRITS) it will become easier than ever to share successful projects with institutions across the country. Over the coming year, we hope to see more facilities staff, students, faculty, and administrators get creative about how their school can save water and become more sustainable campuses.

New guide provides framework for investing in building energy efficiency upgrades
Report provides step-by-step information on planning, creating, and managing a green revolving fund.

CAMBRIDGE, MA (January 15, 2013) — A new publication answers the call for guidance from colleges across North America in setting up and managing green revolving funds (GRFs) on their campuses. Green Revolving Funds: An Introductory Guide to Implementation and Management combines the expertise of energy professionals and college administrators from dozens of institutions. The goal of the Guide is to provide practical advice for designing, implementing, and managing a green revolving fund at a college, university, or other nonprofit institution.

A green revolving fund (GRF) is an internal investment vehicle that provides financing to parties within an organization for implementing energy efficiency, renewable energy, and other sustainability projects that generate cost-savings. These savings are used to replenish the fund for the next round of green investments. The Guide is a co-publication of the Sustainable Endowments Institute (SEI) and the Association for the Advancement of Sustainability in Higher Education (AASHE) and was developed with the consulting firm ICF International.

The Guide is part of a suite of resources associated with SEI’s Billion Dollar Green Challenge (www.GreenBillion.org), which catalyzes the creation of green revolving funds. The Guide responds to the need for assistance in developing and managing these funds – which have a quickly growing presence in higher education, with a 60 percent increase in the number of GRFs in operation between 2010 and 2012. In total, colleges have committed more than $111 million in capital to their own GRFs, which have financed more than 900 energy efficiency and resource-reduction projects on campuses across the country.

The Guide includes a 10-step roadmap for starting and managing a fund, which identifies key actions and decision points in the fund development process. In addition, the Guide demonstrates how to use existing research and strong data analysis to build a case for a fund, set up its structure, and identify and select projects.

The interviews and research conducted for the Guide identified challenges that many institutions have reported when considering a green revolving fund. The Guide outlines those issues and offers best practices for overcoming them based on insights from GRF leaders. Many obstacles are of a financial nature, and the Guide helps readers gain a comprehensive understanding of their institution’s accounting system, incentive structure, and sustainability investment portfolio in order to inform the fund’s design.

The Introductory Guide to Implementation and Management comes at a time when the green revolving model is expanding to new sectors including healthcare institutions, K-12 schools, and municipalities. The model also has potential to continue expanding into private companies, government, and beyond. The Guide joins a host of other tools which provide support for smart implementation that takes advantage of emerging best practices, allowing GRFs to continue capturing financial and environmental benefits, engage and educate campus communities, and build the business case for sustainability.

Publication Partners: American College and University Presidents’ Climate Commitment (ACUPCC), Association for the Advancement of Sustainability in Higher Education (AASHE), Center for Green Schools at U.S. Green Building Council, Clean Air-Cool Planet, Clinton Climate Initiative, Focus the Nation, National Wildlife Federation Campus Ecology Program, Net Impact, New England Board of Higher Education, Responsible Endowments Coalition, Rockefeller Philanthropy Advisors, Rocky Mountain Institute, Second Nature, UNCF Building Green Initiative, U.S. EPA’s Green Power Partnership, and Vermont Energy Investment Corporation.

Funded By: David Rockefeller Fund, John Merck Fund, Kresge Foundation, Merck Family Fund, Rockefeller Brothers Fund, Roy A. Hunt Foundation, and Wallace Global Fund.

Access the full report here.

Greening the Bottom Line 2012 continues research into the rapid growth of green revolving funds (GRFs), a sustainability financing mechanism that colleges, universities, and nonprofits have increasingly adopted as a means to fund sustainability initiatives inside their buildings and operations. These initiatives typically reduce energy and resource use which result in decreased operating costs and an improved environmental impact. Though many of these GRFs are young- there have been 36 new funds created since 2010- their portfolios have already begun to post impressive returns, with a median reported return on investment of 28 percent.

Implementing efficiency measures can benefit not only the institution itself, but also the students, faculty, staff, and community members that call the campus their home. Greening the Bottom Line 2012 found that a growing number of schools are seeking to implement efficiency projects by reaching into the campus community for inspiration, research, and volunteers. Greening the Bottom Line 2012 also reports on the project- and fund-specific energy savings, cost savings, and fund structures of GRFs across North America.

Other trends featured in the 2012 report include:

• A 60% increase in the number of GRFs in operation between 2010 and 2012;
• More than $111 million in capital collectively committed among established GRFs;
• Over 900 energy efficiency projects initiated with the support of GRF funding;
• GRFs launched in 31 U.S. states and 2 Canadian provinces;
• Reported return on investment between 20 percent (Georgia Institute of Technology and the University of North Carolina at Chapel Hill) and 57 percent (Boston University).

Publication Partners: American College and University Presidents’ Climate Commitment (ACUPCC), Association for the Advancement of Sustainability in Higher Education (AASHE), Center for Green Schools at U.S. Green Building Council, Clean Air-Cool Planet, Clinton Climate Initiative, Focus the Nation, National Wildlife Federation Campus Ecology Program, New England Board of Higher Education, Rockefeller Philanthropy Advisors, Rocky Mountain Institute, Second Nature, UNCF Building Green Initiative, U.S. EPA’s Green Power Partnership, and Vermont Energy Investment Corporation.

Funded By: David Rockefeller Fund, John Merck Fund, Kresge Foundation, Merck Family Fund, Rockefeller Brothers Fund and Wallace Global Fund.

Access the full report here.

We will be holding webinars that feature a virtual tour of GRITS in the next few weeks.

• If you are based in New England and interested in participating in the Leaders in Energy Efficiency Financing (LEEF) Network, please sign up for the webinar on November 7 at 12pm EST. Please register here.
• There will be another webinar held November 13 at 2pm EST for all other interested institutions. Please register here.

Students can be a powerful driving force for campus sustainability. However, student initiatives are often plagued by barriers including funding shortages, resistance to institutional change, and the perception that sustainability is an expense rather than an investment.

A green revolving fund (GRF) is a great strategy to overcome these barriers, a case I made in a previous blog. The number of universities with a GRF has quadrupled since 2008, growing to at least 47 by the end of 2011 (and preliminary research shows the number has nearly doubled since). Most exciting of all, 17 of those funds were started by student entrepreneurs! And yet, while the GRF model is compelling, it is not a sure bet—for every success story there are also tales of failed proposals and fizzled ideas. The key is to learn from these efforts if we hope to accelerate growth in student-led GRFs in the next few years.

This post presents nine rules for students to live by when designing and pitching a GRF. These ideas are informed by my experience as the co-leader of a student team that successfully established a $1 million GRF at Dartmouth College, as well as my current work on GRFs at ICF International. This list pulls no punches. It is cynical by necessity, optimistic by design, and intended to arm you with the insights you need to get your GRF right.

1. Don’t reinvent the wheel
A wealth of work has already been done on green revolving funds, so your first task is to learn all that you can. Intelligently using existing materials can shave months off the proposal process and dramatically boost your chances of success. A great place to start is the Resources section of the Billion Dollar Green Challenge site. Also look for SEI’s GRF implementation guide (coming soon).

2. Build your dream team
A successful proposal starts with the people who power it, so build a dream team who will see it through until the bitter end.

At Dartmouth, our dream team consisted of a particularly motivated subset of six students in a senior Environmental Studies seminar. We were a diverse cast of characters: The Big Idea Woman who kept things on track and the focus on the big picture; The Quant, who ran financial analyses and built the business case for the fund; The Networker who leveraged her extensive campus connections to get us those coveted meetings with administrators; The Engineer who provided technical perspective on the projects that our fund would actually finance; The Sweet Talker whose silver tongue and crafty presentation skills were our saving grace more than once; and The Environmentalist who made sure that we maintained a true “triple bottom line” mentality.

I affectionately referred to this squad as the Planeteers—and while we may not have formed a royal blue crime-fighting superhero, we did manage to direct $1 million into meaningful sustainability projects. After our departure, the proposal was fully implemented by a second generation of GRF advocates, including key administrators, facilities staff, professors, and the Sustainability Director and her team. This highlights another important consideration: make sure that you have committed individuals to carry the idea forward once your dream team graduates, and ensure that the principles with which you designed the GRF are observed by the fund managers when it is up and running.

Dream teams can be built from classes, student groups, Greek houses, friends, or elsewhere. Just remember that the rest of these rules mean nothing if they are not backed by a team that is passionate, capable, diverse, and a little bit crazy—you are, after all, setting out to alter the strategic direction of a major institution.

3. Start small, dream big
By our senior spring, everyone on Dartmouth’s GRF proposal team had seen more than one good student sustainability proposal permanently shelved. One such proposal put forward a comprehensive plan for achieving carbon neutrality at Dartmouth—including economic analysis, project timelines, and even suggestions for specific renewable energy developers to partner with. The plan was a thing of beauty, and it was personally presented to the College President by the proposal team. While enthusiastic, he didn’t exactly bust open the College coffers.

We were determined to stand on the shoulders of these giants and build a proposal that would create real change. Our approach was to develop a focused and compelling idea that could be refined by our proposal team and easily digested by risk-averse decision-makers. Our GRF would be fiscally disciplined (only financing projects that would pay back in 10 years or less) and would initially focus on projects that Dartmouth’s Facilities, Operations, and Management Department had already approved. We would start with a $10,000 fund, demonstrate success, and grow it over time.

This approach did not always win us friends among our fellow environmentalists. It required hard, sometimes hostile conversations with well-meaning folks who wanted to try and save the world with one all-inclusive initiative. Our goal was to use the GRF model to build a tightly reasoned business case for sustainability—a case that would appeal to wide range of stakeholders and lead to measureable change.

Despite the importance of starting small, watch out for opportunities to go big. In one of our early meetings with the Chief Financial Officer, we explained that our proposed GRF would initially only finance projects with strong payback periods. “I appreciate your emphasis on fiscal discipline,” he said. “But I think we can drive more change if we scale back on that a bit.” When the CFO of an Ivy League institution that manages a $3 billion endowment tells you that you’re being too stingy, you know you’ve built a compelling proposal. He continued: “As a matter of fact, I think starting with $10,000 is too small. I think $1 million is a more appropriate size.” We immediately followed up by molding our proposal into a bigger and more ambitious model (see Rule 4: Mold Your Model).

In a single meeting, our GRF had transitioned from a small, focused concept to an officially endorsed seven-figure powerhouse. Most exciting of all, not only would our GRF stand on the shoulders of previous proposals, but it could actually allow them to come to fruition by providing funding and support. I am convinced that this opportunity to go big arose not in spite of starting small, but precisely because of it.

4. Mold your model
Perhaps the most powerful attribute of the GRF model is that it can be adapted to the unique challenges, goals, and opportunities of your institution. Your fund should speak to the distinct character of your school. Things to consider: Will you finance only quick-payback projects or those with poorer savings but more social value? How will you inform and engage the broader community? Are there any creative ways you could structure the fund to take advantage of unique opportunities at your school?

As Dartmouth’s CFO highlighted (see Rule 3: Start Small, Dream Big), we began with two ideas that were seemingly at odds. On the one hand, there was a massive opportunity for quick-payback energy-efficiency investments that could only be implemented by Facilities, Operations, and Management. On the other, we had a deep culture of student entrepreneurship and activism in sustainability, and we wanted to ensure student ideas were not overshadowed by large Facilities projects. The solution? We created a first-of-its-kind GRF that leverages clean energy project savings to finance community-led projects. To do this, we adopted a two part-model: a Facilities fund that finances only projects with strong financial paybacks, while directing 10% of the savings from these projects into a smaller Community Fund. This fund then supports educational or cultural projects regardless of whether they can pay back.

In the end, we scaled back our initial emphasis on fiscal discipline and found ways to make fiscal goals complement, rather than compete with, environmental goals. There are no hard-and-fast rules for how a GRF must be structured, so be on the lookout for opportunities to innovate.

5. Talk to people
From the very beginning of your proposal until final implementation of the GRF, spend time talking with people. Successful GRFs require buy-in from a diverse set of stakeholders on campus: administrators, students, faculty, accountants, and particularly facility managers (see Rule 7: Facilities Are Your Friends). When student proposals fail, it is usually because they are out of touch with the political, economic, or logistical realities faced by the institution. The remedy for this is to engage with decision-makers early and often, ask tough questions, and continually adjust your proposal as you learn. Figure out what keeps your audience awake at night and design your proposal to address those practical challenges head-on.

6. Search for buried treasure
Identifying sources of seed funding for your GRF should be a top priority. Luckily, there are a variety of funding options available to universities and they can be mixed and matched. Be sure that you dig deep into current budgets and spending plans to identify the best funding option(s). You may be able to tap into money that has already been dispensed but is going unused. Seed funding sources may include endowment funds, capital improvement budgets, operating budgets, student “green fees,” alumni donations, savings from projects that have already been financed by other means, and more. See
SEI’s Investment Primer for more information.

7. Facilities are your friends
Facility managers are the gatekeepers of sustainability. Without their expertise, solar panels do not go up and light bulbs do not get screwed in. Make sure you get them on your side early. A couple of tactics:

Learn the parlance: If you don’t know what the words “HVAC”, “32-watt T-8”, and “high-efficiency boilers” mean, learn quickly. Sustainability really boils down to the built environment; the language of sustainability is ultimately the language of building engineering.

Figure out what ails them and fix it: In several years of working with facility managers, I have found that they are almost universally overworked, understaffed, and undervalued. Remember that the first priority of any good facility manager is to keep things running; a second priority is to make them do so efficiently. Your task is to understand the particular challenges faced by your facility managers (e.g. staffing shortages, a slow project financing process, lack of funding) and design a GRF that can overcome those challenges.

8. Manage your messaging
This is the business end of Rule 5: Talk to People. Now that you’ve engaged with key stakeholders, tweak your messaging strategy so that it speaks to them. Pitching to environmentalists? Focus on the power of GRFs to reduce greenhouse emissions, conserve resources, and shift administrative attitudes. How about financial managers? Tout the superior return-on-investment of existing GRF’s and the value proposition for your own. And facility managers? Per Rule 7, make sure you emphasize that the financing process will be streamlined and easy.

At Dartmouth, there were two key arguments that proved instrumental in convincing administrators to back the GRF. First, we ran the numbers. Our team designed an Excel model to forecast the financial and environmental performance of the fund. We worked with Facilities to identify the projects it would actually finance, collected energy price projections from the Energy Information Administration, and calculated key metrics like return on investment, net-present value, and annual carbon mitigation through 2030. It’s one thing to claim that GRFs produce superb financial and environmental savings, but it’s another thing to demonstrate them with data-driven graphs of net savings skyrocketing over time.

Our second key argument was simple: “Harvard is doing it.” The knowledge that rival institutions (like Harvard, in our case) are pursuing this strategy with great success provokes two emotions in key decision-makers: comfort with the GRF concept and concern that others are already capitalizing on it. In a world of higher education where reputation means everything, never doubt the power of competition to drive real change.

9. Never, never, never give up
GRFs will likely be a major force in shaping the future of energy-efficiency and renewable energy, and student entrepreneurs can lead the way. As a student, you are uniquely positioned to create systemic change—a nice way of saying that you can get away with things that other groups on campus cannot. Administrators will listen to you and, if nothing else, will be impressed by your panache in proposing a GRF. Use that to your advantage. Inform yourself, stay grounded, and keep your eye on the prize.

Most of all, do not settle. Resist the urge to write your ideas down in a report and call it a day. Two decades of continuous schooling often convinces us that a well-written research paper is the measure of success. But with a GRF, your measure of success is cold, hard cash invested in meaningful clean energy and sustainability projects—more akin to starting a business than publishing a thesis.

Write a proposal, not a report. And back it up with an organized, informed, and unrelenting campaign to turn that proposal into reality.

About the author:
Joe Indvik is a consultant and “intrapreneur” focused on finding cost-effective strategies to reduce greenhouse gas emissions and scale clean energy. As an undergraduate and later independent consultant, he co-led a team to establish a $1 million green revolving fund at Dartmouth College. He is now a consultant in the Climate Change and Sustainability Division at ICF International in Washington, DC, where he works with clients to design and implement their own GRFs. He happily does free-of-charge work with students to help them set up GRFs and other sustainability initiatives, so just ask!

Stephanie Gardner and Bari Wien, members of the Dartmouth GRF proposal team, contributed to this post. You can contact the author at: joe.indvik@gmail.com.

Witness the extraordinary gathering of participants at the Financing the Future of Energy Efficiency Summit at Harvard University on May 15. Attendees included chief financial officers, facilities directors, sustainability coordinators, foundation representatives, college faculty, college presidents, as well as people from the business world. What did they have in common?

They came to the Summit because they understand that the single most important catalyst for implementing sustainability initiatives is to make the financial case for doing so. They came with a desire to better understand how to make green revolving funds work, not just to maximize the ubiquitous “ROI” (return on investment), but to integrate campus sustainability values with cutting-edge financial tools. Most importantly, participants joined regional and national colleagues, forming what will become a vibrant network of technical support and educational resilience.

Although the trend towards green revolving funds is relatively recent, the Billion Dollar Green Challenge has already amassed a portfolio of best practices, case studies, and readily applicable models and scenarios for a range of institutional situations. The Summit presented a suite of hands-on workshops, catering to a just-in-time approach to implementation, from colleges that are taking their first steps in identifying and securing capital, to those that are researching the best practices in accounting and tracking performance, to colleges that aspire to innovate and expand their efforts with green revolving funds.

As I wandered through the various sessions, eavesdropped on hallway conversations, and listened to the questions, suggestions, and ideas, I felt both anticipation and accomplishment. The Billion Dollar Green Challenge is building much more than a consortium of financial capital tools. It’s coordinating a network of social and intellectual capital—ways for participants to merge expertise with aspiration, to invent and experiment, and to work with multiple campus constituencies.

Five years ago when the American College and University Presidents’ Climate Commitment was launched, the biggest obstacle to the potential success of these programs was how they would be financed. Now higher education institutions know that creative and disciplined financial tools enable campuses to implement these initiatives as cost-saving approaches. Sustainability makes economic and ecological sense.

The Billion Dollar Green Challenge is still in its first year. The early-adopter Founding Circle and Charter Institutions will get a great head start. We should all be grateful for their willingness to take the lead with green revolving funds. What the Summit proved is that there is growing interest in this initiative. Campuses are financing sustainability breakthroughs that otherwise would never have been launched. Meanwhile, the importance of gathering and sharing data is crucial. Financial accountability demands a comprehensive approach.

Near the conclusion of the Summit, Felicia Davis of the United Negro College Fund’s Building Green Network made a compelling case that the Billion Dollar Green Challenge would only reach its full potential when its reach expanded to include minority serving institutions, community colleges, and other under-served constituencies. Our goals should be not only to raise one billion dollars of cumulative green revolving funds, but to make sure that access to such capital is possible for the widest-range of institutions.

The Billion Dollar Green Challenge intends to be comprehensive and inclusive, analytical and creative, accountable and accessible. That was clearly the spirit of the Summit, and reflects a uniquely compelling path to financing the future of energy efficiency.

Mitchell Thomashow
Director, Second Nature Presidential Fellows Program
Consultant, Billion Dollar Green Challenge

In the last few years, universities have emerged as a hotbed of investment in clean energy and efficiency (“cleantech”).

An increasingly popular and innovative tactic for making these investments is the green revolving loan fund (GRF). A GRF issues loans to finance cleantech and sustainability projects that can generate monetary savings. The returns from these projects flow back into the fund (“revolve”) and are re-invested in future projects. GRFs are often managed by a committee of community members who review loan applications and oversee fund operations.

The number of universities with a GRF has quadrupled since 2008, growing to at least 47 by the end of 2011. The Sustainable Endowments Institute (SEI) along with numerous partner organizations including AASHE, recently launched the Billion Dollar Green Challenge, an ambitious campaign that encourages and facilitates university investment in GRFs, with the ultimate goal of directing $1 billion of capital into these funds nation-wide. With an estimated $65 million already committed to GRFs as part of the Challenge, continued growth is expected.

On the surface, this growth should not be surprising, as the case for making cleantech investments on campus is well established. Schools regularly report annual return-on-investment (ROI) in excess of 30% for cleantech projects (for additional statistics see the publication, Greening the Bottom Line). These projects usually pay for themselves in less than five years, and often much faster, while also reducing carbon emissions among other environmental benefits.

However, the choice to use a revolving loan mechanism to make these investments is not always so obvious. Any investment made by a GRF could also be made by spending directly out of the operating budget, capital improvement budget, or endowment. Energy savings would then be absorbed into the operating budget with no strings attached. So why use a GRF?

In my experience, there are several key factors that make GRFs the best choice for universities looking to make cleantech investments.

• The “sizzle” factor. A GRF is a unified, purposeful investment vehicle that is easy to market and generates a more positive public image than traditional investments. It demonstrates concrete commitment to sustainability in a way that one-time investments cannot.

• Turn expense into investment. Despite the massive cost-saving potential of cleantech investments, many colleges and universities are stuck in the rut of thinking about them as an expense only. By definition, the “revolving” mechanism brings savings into the limelight and explicitly directs them into future investments. When presenting this concept to administrators, I have shown the following graph. The first bar is annual ROI for the stock market (S&P 500). The second bar is annual ROI for university GRFs (reported to SEI).

• Leverage savings into opportunity. GRFs are a great way for schools to capitalize on the savings from cleantech projects to promote sustainability in general. For example, the Dartmouth Green Revolving Fund (full disclosure: I am a co-founder) directs 10% of the savings from renewable energy and energy efficiency projects into a Green Community Fund. Students, staff, and faculty can then apply for money from this fund for projects that promote sustainability on campus, whether or not they have financial paybacks.

• Bring the ivory tower down to the community. A GRF can engage the community by bringing diverse stakeholders to the table to make decisions about investments and chart a path toward sustainability. This happens via interactions on the management board and through the participatory process of writing proposals for funding. At a more basic level, GRFs are often started by students. Of the 47 funds surveyed by SEI, 17 were student-driven.

• Predictability and staying power. A GRF charter is usually written with specific requirements for projects to ensure fiscal discipline and environmental responsibility. Unlike investments made on a case-by-case basis, a GRF helps guarantee that money will be spent according to the criteria the founders intended.

• Check the box. Many rating systems, surveys and reporting programs look specifically for the existence of a GRF when reviewing organizations.

• Performance tracking. You can’t manage what you don’t measure. A GRF allows a school to draw a figurative box around a body of money, invest it in sustainability projects on a recurring basis, and then track the financial and environmental performance of those projects. This model lends itself to metrics like payback period, return-on-investment, carbon mitigation per dollar, and so on. For example, check out the “By the numbers” section of Harvard’s fund website. Clean, simple, and compelling. Try doing that with a suite of traditional capital allocations!

• Infinite scalability. GRFs can be effective with starting capital of $10 or $10 million. Whether the first investment is one lightbulb or a solar array, the model works. Many schools have started their funds off small to demonstrate effectiveness, then scaled them up once the administrative machinery is up and running.

I am convinced that Green Revolving Funds are the wave of the future for cleantech investment on campus. They have a notable financial, environmental, and educational upside and negligible downside in most cases. With initiatives like The Billion Dollar Green Challenge and student entrepreneurs leading the way, it will be exciting to see what the next few years have in store.

You can contact the author at Joe.Indvik@gmail.com.