Tools
Change country:
- Politics
- PowerPost
- Fact Checker
- The Fix
- Monkey Cage
- Opinions
- Act Four
- All Opinions Are Local
- ComPost
- Book Party
- Erik Wemple
- The Plum LineThe Plum Line
- PostPartisan
- PostEverything
- Rampage
- Right Turn
- Tom Toles
- The Watch
- D.C., Md. & Va.
- Answer Sheet
- Capital Weather Gang
- Inspired Life
- Sports
- Sports
- AllMetSports
- D.C. Sports Bog
- The Insider
- Maryland Terrapins
- Soccer Insider
- Washington Capitals
- Washington Nationals
- Washington Wizards
- National
- Innovations
- Morning Mix
- Business
- On Leadership
- Lifestyle
- Arts and Entertainment
- Solo-ish
- Reliable Source
- Arts & Entertainment
- Comic Riffs
- Going Out Guide
- USATODAY - MLB Top Stories
- USATODAY - Healey
- USATODAY - News Top Stories
- USATODAY - Nation Top Stories
- USATODAY - Washington Top Stories
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- USATODAY - College Football Top Stories
- GANNETT Syndication Service
- GANNETT Syndication Service
- USATODAY - Fantasy
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- USA Today - MMAjunkie
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- USATODAY - Money Top Stories
- USATODAY - Tech Top Stories
- GANNETT Syndication Service
- USATODAY - Gaming
- GANNETT Syndication Service
- GANNETT Syndication Service
- GANNETT Syndication Service
- USATODAY - The Cruise Log
- GANNETT Syndication Service
- Home - CBSNews.com
- Us - CBSNews.com
- Politics - CBSNews.com
- World - CBSNews.com
- Science - CBSNews.com
- Technology - CBSNews.com
- Health - CBSNews.com
- Entertainment - CBSNews.com
- Moneywatch - CBSNews.com
- Evening News Cbs News Investigates - CBSNews.com
- Opinion - CBSNews.com
- Video - CBSNews.com
- Cbs This Morning - CBSNews.com
- Evening News - CBSNews.com
- 48 Hours - CBSNews.com
- 60 Minutes - CBSNews.com
- Sunday Morning - CBSNews.com
- Face The Nation - CBSNews.com
- Strange - CBSNews.com
- Politics, Policy, Political News Top Stories
- Congress
- Health Care
- Defense
- Economy
- Energy & Environment
- Politics
- Playbook
- Morning Tech
- Morning Money
- POLITICO Pulse
- Huddle
- Morning Energy
- Morning Defense
- POLITICO Influence
- Morning Score
- Morning Transportation
- Morning Education
- Morning Tax
- Morning Agriculture
- Morning Cybersecurity
- Morning eHealth
- Morning Shift
- Morning Trade
- The Atlantic
- Best of The Atlantic
- Politics | The Atlantic
- Business | The Atlantic
- Culture | The Atlantic
- Global | The Atlantic
- Technology | The Atlantic
- U.S. | The Atlantic
- Health | The Atlantic
- Video | The Atlantic
- Education | The Atlantic
- Ideas | The Atlantic
- Family | The Atlantic
- Books | The Atlantic
- Science | The Atlantic
- Letters | The Atlantic
- News | The Atlantic
- Press Releases | The Atlantic
- Newsletters | The Atlantic
- The Masthead | The Atlantic
- The Atlantic
- News from California, the nation and world
- Hockey
- Soccer
- Travel
- World & Nation
- High School Sports
- UCLA Sports
- Angels
- Chargers
- Bill Plaschke
- USC Sports
- Lakers
- Dodgers
- Clippers
- Rams
- Sports
- Opinion
- Politics
- Science
- Lifestyle
- Food
- Awards
- Music
- Company Town
- Books
- Movies
- Television
- Orange County
- Climate & Environment
- Entertainment & Arts
- Technology
- Autos
- California
- Business
- Hot Property
- Media | New York Post
- New York Post
- New York Post
- New York Post
- New York Post
- Fashion News, Photos, and Video | New York Post
- Living | New York Post
- Technology News & Reviews | New York Post
- Real Estate | New York Post
- Metro | New York Post
- Sports | New York Post
- Opinion | New York Post
- Entertainment | New York Post
- Business | New York Post
- News | New York Post
- CNN.com - RSS Channel - Intl Homepage - News
- CNN.com - RSS Channel - World
- CNN.com - RSS Channel - Regions - Africa
- CNN.com - RSS Channel - Regions - Americas
- CNN.com - RSS Channel - Regions - Asia
- CNN.com - RSS Channel - Regions - Europe
- CNN.com - RSS Channel - Regions - Middle East
- CNN.com - RSS Channel - US
- World business news - CNNMoney.com
- CNN.com - Technology
- CNN.com - Science and Space
- CNN.com - RSS Channel - Entertainment
- CNN.com - RSS Channel - Sport
- CNN.com - RSS Channel - Sport - Football
- CNN.com - RSS Channel - Sport - Golf
- CNN.com - RSS Channel - Sport - Motorsport
- CNN.com - Tennis
- CNN.com - RSS Channel - Travel
- CNN.com - Travel
- CNN.com - RSS Channel
- CNN.com - RSS Channel
Appearance
Settings
Ideas | The Atlantic
Universities Could Divest If They Wanted To
theatlantic.com
Students at dozens of colleges and universities across the country are occupying quads, lawns, and buildings in opposition to Israel’s bombardment of Gaza, demanding that their universities divest from arms manufacturers and Israeli companies. But is cutting such financial ties even possible? And even if it were, would the loss of colleges’ investm
Universities Could Divest If They Wanted To
Students at dozens of colleges and universities across the country are occupying quads, lawns, and buildings in opposition to Israel’s bombardment of Gaza, demanding that their universities divest from arms manufacturers and Israeli companies. But is cutting such financial ties even possible? And even if it were, would the loss of colleges’ investments actually change the bottom line for businesses operating in the region or providing arms for the conflict?Institutions of higher education hold close to $1 trillion in their endowments, much of it parked in index funds, hedge funds, and private-equity funds that invest in equities, bonds, derivatives, real estate, start-ups, and so on. They do not generally make individual investments themselves, meaning that divestment would not be as simple as executing a few stock orders.That does not mean they have no say over where their money is going, however. Many universities already can claim that they avoid pouring money into industries that damage the planet or hurt people. In one survey of 688 schools with endowments, 187 said they had a “responsible investment strategy.” Many put their cash in “ESG” funds that invest only in firms committed to meeting environmental and social standards (such as measuring their carbon output and reporting on the gender and racial balance of their workforce). Other endowments engage in “impact investing,” pushing cash to for-profit enterprises working for the common good (such as ones building homes, grocery stores, and schools in low-income neighborhoods). Still others bar investment in gambling and tobacco.Plus, universities have divested before. In the 1980s, protesters at schools around the country formed encampments and demanded divestment from businesses operating in apartheid South Africa. Many schools agreed. (Endowments were smaller and simpler then.) In the past decade, scores of colleges and universities—including Columbia, Brown, and Harvard—have divested from fossil-fuel firms after being petitioned by campus activists; others pulled money out of Russia after its incursion into Ukraine; others divested from private prisons and the retailers of assault weapons.Divestment from Israel would not be straightforward. It might not be immediate. (And at least one state, Ohio, has a law barring its public universities from divesting from Israel.) But it is certainly possible, Charlie Eaton, a sociologist at UC Merced who studies university endowments, told me. “If you’re a Columbia or a Brown or a Princeton or a Harvard, you have a lot of leverage as a very large investor. If you’ve got an endowment that’s valued in the tens of billions of dollars, you can find somebody who will manage the funds according to your preferences.”If schools chose to do this, they would face little financial risk. Their investments are so big that pulling back from arms manufacturers and Israeli companies, a tiny share of the global economy, would do essentially nothing to their bottom line.[Annie Lowrey: If you’re worried about the climate, move your money]The specific decisions a college would have to make are more complicated. Schools could divest from Israeli firms and military contractors around the world if they actually wanted to. But what about firms with major operations in Israel? Firms whose wares or services are purchased by the Israel Defense Forces? Some students at Columbia argue that the school should drop its investments in all companies “profiting from Israeli apartheid,” including Amazon, Airbnb, Hyundai, and Google, among others.A yet-bigger question is whether divestment would do anything. In terms of changing the financial outlook for the firms being called out, the clear answer is no, not much. The old investing chestnut applies: For every seller, there is a buyer. If University A sells its shares in military contractor B and Israeli technology firm C, pension fund D is going to pick them up. Unless a huge share of the world’s investors refuses to put money into the companies in question, share prices and financing costs won’t be impacted much. Indeed, studies of ESG investing show no effect on a company’s expected returns. The South Africa divestment campaign did not seem to do much either.That said, some studies of fossil-fuel divestment show a small, but measurable, effect. Divestment has reduced the share price of American coal companies, for instance. The world’s financiers came to see investing in coal as riskier, in essence, and lower returns as likelier.Still, this kind of analysis misses the point. Most students understand that divestment would not bring down the Israeli economy or end the war. Their goal is not really a financial one but a political one: They don’t want their universities supporting Israel or associated with the human tragedy in Gaza. They oppose the war.Likewise, the real opposition to divestment is political, not technical. Most Americans believe that Israel has a valid reason to be targeting Hamas; the country is split on whether the campaign of bombardment itself is justified. Many donors to colleges and universities find the protests anti-Semitic, and support Israel, and don’t want to see administrators give in. Some are even promising to quit giving money to their alma maters if the schools divest.University administrators, for their part, seem to be searching for ways to make everyone happy, by promising to study the issue or hold votes on their investment strategies. Brown committed to meet with a divestment coalition. The University of Minnesota agreed to share more information about its holdings. It seems unlikely that much will come from these initiatives. But if colleges felt compelled to divest, they could certainly do so.