“Repelling death,” read the letters written in chalk on the sidewalk outside The New School in New York City on Tuesday.
The slogan voices one of the demands of the anti-war protests on campuses, which are calling on colleges and universities to divest their donations from companies that profit from the war between Israel and Hamas.
Campaigns to pressure universities to divest for political or ethical reasons go back decades, at least to the 1970s, when students pressured schools to withdraw from investments that benefited South Africa under the apartheid regime. More recently, in the early years, schools have created rules that prohibit investments in things like alcohol, tobacco and gambling, according to a report by the National Association of College and University Business Officers (NACUBO) and Commonfund.
By the beginning of the next decade, a significant minority of endowments incorporated a number of environmental, social and governance criteria into their portfolios, expanding the factors considered when weighing the value of an investment beyond just profits and lose.
For example, college and university endowments contain hundreds of billions of dollars in assets, while Columbia University will reach $13.6 billion by 2023. Now protests on campus are drawing attention to who controls university endowments and how decisions about those investments are made.
Endowments are the assets and investments that higher education institutions, foundations, and some nonprofits manage as a kind of perpetual savings account. Many use the financial returns these assets generate each year to help finance the institution’s ongoing operations. Donors often give money to institutions to ensure they have resources well into the future.
Many schools, from the largest to the smallest, work with outside investment managers, such as investment banks or hedge funds or specialty firms that have access to investment vehicles not available to private investors, says Todd Ely, associate professor in the School of Public Affairs. at the University of Colorado Denver.
“Colleges and universities have pretty limited discretion in the actual specific investments where their endowment funds go, because they’ve hired these outside experts to make those decisions. And sometimes those decisions are even proprietary,” Ely said, meaning the investors don’t publicly share what’s in their portfolio.
Endowments are typically managed by a university board of directors and the purpose of each donation is agreed upon by the donors, usually for the benefit of the institution. They do not ‘belong’ to current students, teachers or alumni, but to the organization itself.
Georges Dyer, executive director and co-founder of the Intentional Endowments Network, said it can take time and be difficult to determine what exposure a school’s endowment may have to a specific company.
“It’s not as easy as some people think; maybe it’s just selling shares in a particular company. That said, I think anything is possible in today’s financial services industry,” said Dyer.
His network helps connect organizations with donations to learn from each other about how to align their donations with their mission and how to make their investments sustainable and responsible, for example in the context of climate change. The network also recommends that transparency is a principle of sustainable and mission-driven investing.
The call for divestment from fossil fuel companies, which began in 2011, is not only a moral argument but also a financial one, he said, helping win the support of the administrators and boards that direct university investments.
“The link to the investment, and the financial performance and the investment performance, is not always very clear,” Dyer said of calls for divestment based on geopolitical issues.
The protesters’ demands also raise questions about what a university’s priorities and responsibilities are, Ely said.
“Are you trying to maximize returns or promote a social or political agenda?” Ely asked. “And those who actually manage the endowments on a day-to-day basis are focused on risk and return until they are otherwise managed by those with administrative authority for the college or university.”
Despite the pressure student protesters from California and Columbia University in New York City are putting on their schools’ leadership, Dyer of the Intentional Endowments Network said he hasn’t heard much from their member schools and institutions about divestment in this context.
Fierce disagreement over support or opposition to the war within campus communities is another reason schools likely did not take action. Many on campuses hear calls for divestment from Israel or an end to the war as an attack on the Jewish people more broadly or as a cover-up for the deaths and pain caused by Hamas’s Oct. 7 attack that killed 1,200 people.
Jennie C. Stephens, a professor at Northeastern University, has a forthcoming book on the climate justice movement at universities, including calls for fossil fuel divestment. She said the first response from universities when called on to divest from fossil fuels was also to say their funds were mixed with other investors, managed by third parties or that they did not know what they were investing in. Schools that committed to quitting fossil fuels have figured out how to do it.
“These elite institutions with large endowments have a lot of power and concentrate wealth and power through their endowments,” Stephens said. “And they have control over how that money is invested.”
No. But divestment campaigns have proven successful through the use of different tactics.
At Pomona College, students voted in February to approve a referendum calling for disclosing investments in weapons manufacturers or companies that benefit from what they called Israel’s “apartheid” system, and then divesting from those companies divest. Kouross Esmaeli, a visiting professor of media studies at Pomona College, said school leaders and administrators have told students and professors that they cannot make all their investments public.
“Oh, we can’t make this public. This is hard to do. It is impossible to find out where our investment is,” Esmaeli said. “All these kinds of excuses as to why we as an institution can’t control our own money, and no one buys it.”
Pomona College spokesman Mark Kendall said the administration has offered to meet with protesters and provide information about their investment policies and will continue to do so.
“Endowment investments support our educational mission, including academic excellence and generous financial aid, over the long term,” Kendall said in an emailed statement.
Esmaeli acknowledged that divestitures could take time and that the donations could be complex, but he said the first demand from student protesters and faculty is that the university commit to divest companies that profit from the war. He said the university can start with those identified by the Boycott, Divest and Sanction movement.
“Different choices can be made and rules can be changed to allow us to have an open donation where we know where our donation is going,” he said.
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