Green Revolving Funds: An Annuity for Sustainabilty

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Courtesy of Courtesy of Connexion

Connexion ExclusiveAccording to a survey report by the Sustainable Endowments Institute, Green Revolving Funds (GRFs) have become more popular within the last two years across all sizes and types of learning institutions.

All revolving loan funds operate on a fairly simple premise: An initial sum of money is set aside for the fund. The fund then finances sustainability projects that have a quantifiable monetary savings or return. These projects are in the area of energy cost reduction or sustainability.

A portion of the returns (energy savings realized) from these projects is then reinvested into the fund until the project has been paid off. The money is then reused for more energy conservation projects.

Like with all well-planned energy upgrades, they lower operating costs and help 'green the bottom line'. In the GRF program, we have a virtual green annuity - a means of funding sustainability projects in perpetuity.

What a great idea for the private sector...

The report also includes a section on some of the main challenges to establishing and running a revolving fund, such as accurately accounting for savings, collaboration among departments. The key attributes of the GRF are it's robust revolving nature; an almost permanent source of sustainability project funding and performance tracking - both of the project and the fund.

The report, called 'Greening the Bottom Line: The Trend Toward Green Revolving Funds on Campus', provides an overview of revolving funds and their performance at various institutions across the country. It revealed that the oldest working fund was established by Western Michigan University in Kalamazoo in 1980. After that, only 10 schools established Green Revolving Funds prior to 2008. More than four times that number were the number of schools establishing these funds from 2008 to 2011.

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