You might not know his name, but you would probably recognize what Mark Orlowski—a polarizing figure in higher education's sustainability movement—is known for.
Soon after graduating from Williams College, in 2004, Mr. Orlowski founded the Sustainable Endowments Institute, or SEI, which issues the College Sustainability Report Card. It was the first of many "green" evaluations that give colleges stars or demerits for their environmental practices—or lack thereof—and became a source of bitterness for colleges that got failing grades. For better or worse, the report card got college administrators' attention, and it started conversations about sustainability on campuses across the country.
Now Mr. Orlowski has a new project designed to help push energy efficiency—but this time, to the relief of some sustainability advocates, it's kinder, gentler prodding. This week he will announce the start of the Billion Dollar Green Challenge, a campaign that strives to add sex appeal to a thoroughly unsexy topic: green revolving funds. The challenge, which had 34 institutions signed up as participants at press time, days before the announcement, will encourage colleges to collectively put $1-billion into sustainability funds that keep themselves going through money earned from energy-efficiency savings. Institutions from the California Institute of Technology to Unity College, in Maine, are part of the challenge.
Mr. Orlowski sees his effort as a way to frame disparate energy-efficiency efforts on scores of campuses. "A lot of institutions are doing ad hoc efficiency projects, and a lot of people don't even know that is going on," he says. About $65-million has been put into green revolving funds on about 50 campuses, so he and his institute have some work ahead of them. He and his staff picked the billion-dollar goal because it was both challenging and sensational. "We also considered the $227-Million Green Challenge, but the ring of that didn't have quite the same impact," he says wryly.
The potential is huge, he contends. "When you look at the need that exists in higher-ed institutions, in terms of making improvements to buildings and deferred maintenance, it totals hundreds of billions of dollars. So a portion of that has to do with projects where there are some clear energy-efficiency gains to be had."
What's more, revolving funds can get returns of 30 percent or more—rates unheard of in the financial markets these days.
Some speculate that Mr. Orlowski is looking for a way to shift the focus of the Sustainable Endowments Institute away from the report card, which went on hiatus after a large group of sustainability administrators complained about the way the organization tallied its grades. (Many colleges have started participating instead in the Sustainability Tracking, Assessment & Rating System, better known as Stars.) When asked if the green challenge was a transition to something new, Mr. Orlowski paused before answering. "Not exactly," he said. "We wanted to develop an initiative that didn't just evaluate institutions and point to leaders and laggards, but also provided direct assistance to these institutions in helping to overcome budgetary challenges."
He says the green report card will return next year.
Regardless, sustainability directors saw the challenge as a welcome change. Dedee DeLongpré-Johnston, at Wake Forest University, says the institute's focus on revolving funds is "an important niche" and "a nice direction for the organization to head, away from the green report card and [toward] something that is more specifically about investments."
Funds That Pay Back
Green revolving funds might not be as eye-catching as grades on a report card, but the money they can save is undeniably attractive. Among those in higher education's sustainability and facilities-management sectors, such funds are fairly well-known methods for paying for energy-efficiency projects, even if they are underutilized.
Here's a highly simplified explanation of how they work: A college sets aside money to take on energy-efficiency projects, like replacing the lights in a building. After the new, energy-efficient lights have been installed, the college uses the savings to repay the fund, which then goes to another project with savings potential—hence the "revolving" nature of the fund. Energy-services companies, commonly known as "ESCO's," use a similar financing model, but the companies reap the energy-efficiency savings as their profit.
Of course, there are caveats. Colleges must closely track energy consumption before and after a project is completed, or else they might repay the funds with savings that are merely illusory. To replenish the funds quickly, colleges also need to invest in a mix of projects with short-term and long-term paybacks. Lighting replacements, for example, can pay back in a year or two, while the savings on window replacements can take decades. There are also questions about how much money to put into a fund, where that money should come from, and whether the fund should grow through interest.
"When you get into the details, these things are fairly complex, unless you just make them small—in which case you are not going to have as much of an impact," says Nilda Mesa, assistant vice president for environmental stewardship at Columbia University. Some colleges might see revolving funds as easy money, she says, and might not track the actual savings or anticipate other complications. (Columbia has been kicking around the notion of starting a revolving fund, she adds.)
Mr. Orlowski hopes that his green challenge will help administrators navigate around those potholes. This spring the Sustainable Endowments Institute released a report on the landscape of college revolving funds. Of the 52 funds examined, three-quarters had been created since 2008. Annual returns ranged from 29 percent to 47 percent.
This fall the institute will release a series of case studies about revolving funds. Early next year, it will release a guide to starting them.
Mr. Orlowski says he will provide various online tools and a network of experts to consult with colleges that join the challenge. The Association for the Advancement of Sustainability in Higher Education, the American College & University Presidents' Climate Commitment, Clean Air-Cool Planet, the Rocky Mountain Institute, and the U.S. Environmental Protection Agency are among the groups backing his effort.
There is a price for all this. The Kresge Foundation, the Rockefeller Brothers Fund, the Merck Family Fund, and other philanthropies have contributed money in the "mid-six figures" to start the Billion Dollar Green Challenge, Mr. Orlowski says, but his hope is that it will eventually be self-sustaining.
Colleges that join will eventually pay an annual fee of 1/20th of 1 percent of the size of their revolving funds. Those contributions would be capped at $2,500. If Mr. Orlowski reaches his goal of $1-billion in members' sustainability funds, that could produce an annual income stream of $500,000 for the institute.
Although Mr. Orlowski may not reach that goal, he certainly has plenty of panache. Those who know him in higher education describe him as smart, media savvy, competitive, and dogged—and it seems that he always was so. Educated at Waldorf elementary and middle schools, which emphasize creativity in learning, he quit high school two weeks into his freshman year because he didn't think the other students (even those in the honors program) were serious about their education.
Instead, as a 15-year-old, he enrolled at Berkshire Community College. By the time he went to Williams, where he majored in political science with a focus on environmental studies, he had already knocked down two years of college. He also joined Williams's shareholder-advisory committee, work that helped later in his founding the Sustainable Endowments Institute.
Adding the Sizzle
Mr. Orlowski's precociousness and networking style have put off some people, but his impact on the world of sustainability is undeniable. "Where were we five years ago on this? Nowhere," says Dave Newport, director of the Environmental Center at the University of Colorado at Boulder. "SEI has made a big difference in the debate and visibility."
Mr. Newport hopes that the Billion Dollar Green Challenge will invigorate revolving funds, just as the Presidents' Climate Commitment raised awareness and rallied colleges around climate-neutral practices. Colorado has a revolving fund of $500,000, contributed entirely by students, and its various projects are earning an average return of about 30 percent. But as a cause, revolving funds "just don't seem to have sizzle," Mr. Newport says. "I am hopeful that Mark's initiative will add the sizzle."
Mr. Orlowski has found some institutions that exemplify what revolving funds can do—and Caltech is one. John Onderdonk, manager of sustainability programs there, has appeared at sustainability-conference sessions with Mr. Orlowski, talking about Caltech's $8-million revolving fund.
When Mr. Onderdonk arrived at Caltech, three years ago, he sat down with the campus's energy manager and figured out that the university was spending $20-million a year on utilities—and that the cost was projected to rise by tens of millions of dollars in years to come, as Caltech grows.
He learned that he could get loans for green projects through the university's endowment, so for a demonstration project, he asked for $25,000 to replace old lights in a parking garage with more-efficient LED's. That project paid for itself in a year. "When we took it to the Board of Trustees, their response was, 'Why can't we do more of this? Why can't we go faster?'" Mr. Onderdonk says. "That was the challenge that was thrown down."
He figured out that with access to $8-million, he could tackle $30-million in projects that have short payback periods. The resulting green revolving fund is getting a return of about 30 percent, he says. But he doesn't want to make it sound easy: Caltech put considerable money and manpower into installing metering to help track the savings.
The process was as much political as it was technical. When he told a Caltech research group that it was using more energy than any other lab on the campus, he recalls, "everyone applauds and high-fives each other in the room, because that says, We must be doing twice the amount of work." He had to emphasize carefully that his energy-efficiency program was not trying to shut down research.
He was also careful about Caltech's association with the sustainability institute, given the past controversy over the organization and its report card. (Caltech got a C-minus in the first edition of the report card and an A-minus in the latest edition.) Mr. Onderdonk thinks the days of the report card "are sort of numbered" with the advent of Stars, the alternative rating system.
But, he says, he was happy to help Mr. Orlowski by telling Caltech's story. "I wasn't concerned about the past," he says. "Going forward, we thought that we should be sharing what we were doing."