The History of Campus Divestments
WHY YOU SHOULD CARE
Recent Israel divestments on college campuses are following in the footsteps of divestments past.
What do apartheid, tobacco, fossil fuels and Israel all have in common?
Student groups across the United States are participating in college divestment activism, asking their universities to stop investing in companies that profit from the Israeli occupation of the West Bank. The issue has inspired passionate debate across the country, particularly in University of California schools where the pro-Palestinian BDS movement (Boycott, Divestment & Sanctions) has gained momentum.
The divestment resolutions are largely symbolic and passed (or not) by student votes. Regardless of how the student votes turn out, the universities’ leaders are under no obligation to heed students’ wishes. At Cornell University, for example, the student government tabled indefinitely a divestment resolution.
This is far from the first time divestment has been used as a tactic to spread awareness for a cause. In the 1970s and 1980s institutions around the U.S. divested from companies conducting business in South Africa, in protest of the apartheid regime. Students picketed board meetings and held sit-ins in college presidents’ offices in order to persuade their universities to divest from firms involved in South Africa.
Hampshire College was the first college to divest in 1977, after a string of regular demonstrations by students. The University of California’s expansive system divested $3 billion. It was one of the most publicly visible and far-reaching divestment campaigns, and has inspired similar movements on college campuses and in investment institutions around the world.
Whether or not divestment is financially impactful is up for debate, but for many students, that’s not the point.
Like any large business, universities invest money in the stock market, often significant sums that are counted upon to provide the institution with another revenue source. Since student fees are part of those investments, students claim they have a right to influence what the money goes toward and, moreover, whether or not they want to accept these kinds of profits.
The National Association of College and University Business Officers reports that university endowment assets amounted to $448.6 billion in 2013. The institutions surveyed reported that their endowments fund an average of 8.8 percent of their operating budgets and are often used to fund financial aid and programs for students and faculty.
Divestment as activism isn’t just happening on campuses, of course. In June, the Presbyterian Church voted to divest holdings from American companies it believes are supporting the Israeli occupation. Reporter Yarden Katz says it is crucial not to call this a “divestment from Israel” but instead an “all-American divestment from the Israeli occupation.”
In the 1990s tobacco was the main focus of divestment campaigns at college campuses, in an attempt to warn people about the dangers of tobacco. Harvard and City University of New York both eliminated stocks of tobacco companies from their investment portfolios. In 1987 Harvard’s tobacco portfolio was worth an estimated $25 million and was estimated to be worth at least twice that in 1990 when it divested. Harvard, along with Rice, the University of Texas, Duke and the University of Rochester, was one of the universities holding the most tobacco stock.
Beginning in the early 2000s, divestments in companies associated with fossil fuels has been the new ask; however, this student demand has met with more resistance than the anti-tobacco campaign. Some institutions, like Wellesley, say that many fund managers would decline the school’s business if they were restricted to fossil-free investment options. “The [Wellesley] Investment Office estimates that reinvesting assets in fossil-free options would reduce endowment earnings by $1.6 million a year,” reports USA Today. This risk could “jeopardize Wellesley’s commitment to need-blind admissions and financial aid support.” Instead, Wellesley is working on alternate projects, including a new set of ethical investing guidelines and a revolving green fund.
Also, the argument over which fuels are and aren’t clean is far less clear cut than the issue of tobacco’s health effects. Some critics suggest that fossil fuels like natural gas are needed as “bridge fuels,” and thus if any divestment should occur, it should be focused on coal, often seen as having the most negative impact on the environment. Divestment critics say university divestments won’t have any economic impact, especially in an industry like coal, which is cheap, abundant and in demand.
Whether or not divestment is financially impactful is often up for debate, but for many students, that’s not the point. Activists use divestment to raise public awareness for a cause and increase opposition to something like apartheid or tobacco, shaping public discourse along the way. The Israel-Palestine conflict is much more nuanced than taking a stance against an apartheid government, and is thus creating intense conflict on campuses.
Regardless of where your allegiances may lie, it’s no secret that money talks, and many student activists are trying to make it also walk — away from Israel.