Apr 30, 2024 - Business

Endowment secrecy complicates campus "divestment" demands

Illustration of a felt pennant with dollar signs on it, and a redaction box across the dollar signs.

Illustration: Brendan Lynch/Axios

"Financial divestment" is the top demand of pro-Palestinian protesters at Columbia University. But none of them know where Columbia's money is invested. Nor does almost anyone else.

Reality check: Columbia, like most private schools, keeps most of its financial information under wraps.

  • Its trustees do publish annual financial reports, including top-line investment performance and asset class allocations from its $13.6 billion endowment.
  • But those reports don't detail specific investments, such as stocks and private equity funds — let alone their geographies.

Why it matters: Divestment appears to be more of a rhetorical demand by those seeking an end to the Israel-Hamas war than it is a pragmatic strategy to bring about that end.

  • Historically, institutional divestment is much less powerful than corporate divestment (i.e., when companies stop doing business in or with a country).

Zoom in: Even the rhetoric at Columbia is a bit strained.

  • Student protesters are demanding divestment "from companies and institutions that profit from Israeli apartheid, genocide and occupation in Palestine."
  • If one were to grant legitimacy to those controversial nouns, it's unclear how companies or institutions profit from them. Save, perhaps, for defense contractors.
  • In another section of their website, the students urge "Columbia to divest all economic and academic stakes in Israel."
  • Columbia President Minouche Shafik announced Monday that the university "will not divest from Israel" and that negotiations with student protesters had stalled.

Look ahead: There may be a small silver lining that could lead to more effective dialogs in the future.

  • The protesters also have asked for the school to "ensure accountability by increasing transparency around financial investments," and Shafik says that she offered to do so during recent negotiations.
  • At Northwestern University, protesters reached an agreement with the administration to re-establish an Advisory Committee on Investment Responsibility that will include students, among other concessions.
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