Aiming for divestment, pro-Palestinian students push schools to open books on Israel

Protesters demand university endowments disclose assets linked to Israeli companies or those doing business with Jerusalem, though colleges have many reasons to resist calls

Activists hang a placard from a window of an upper floor of a building at Rhode Island School of Design, Tuesday, May 7, 2024, in Providence, Rhode Island, as students and supporters, who have taken over a portion of the building, are demanding that the school condemn Israel's war effort in Gaza, and that the school divest from investments that benefit Israel. (AP Photo/Steven Senne, File)
Activists hang a placard from a window of an upper floor of a building at Rhode Island School of Design, Tuesday, May 7, 2024, in Providence, Rhode Island, as students and supporters, who have taken over a portion of the building, are demanding that the school condemn Israel's war effort in Gaza, and that the school divest from investments that benefit Israel. (AP Photo/Steven Senne, File)

MINNEAPOLIS, Minnesota — On college campuses across the country, a rallying cry of pro-Palestinian, anti-Israel protesters has been “Disclose, divest! We will not stop, we will not rest.”

Now some are winning the first of those two demands: Promises to provide information about how much university endowment money is invested in companies linked to Israel or profiting from the Israel-Hamas war.

As part of that effort, the University of Minnesota, for one, disclosed this week that about $5 million of its $2.27 billion endowment investments — or less than a quarter of 1% — are tied to Israeli companies or US defense contractors.

To Ali Abu, a 19-year-old University of Minnesota student and member of Students for Justice in Palestine, the disclosure is a first step in what he described as “just the beginning of our fight.” The ultimate goal, he said, remains divestment. A meeting with the university’s Board of Regents is scheduled for Friday.

But Jewish leaders have raised concerns, and endowment experts say the potential fallout from disclosure is hard to predict. Transparency, they say, has pros and cons.

“I think the broader trend towards transparency is probably healthy. In response to a very charged situation, I think people get nervous about it. Once the information is there, what’s done with that information?” said Kevin Maloney, a former investment manager who is now chair of the finance department at Bryant University in Rhode Island.

A graduate student in orange rolls up tents in front of a sign that says ‘Gaza Solidarity Encampment, Divest Now!’ on the University of Minnesota campus in Minneapolis, Thursday, May 2, 2024. (AP Photo/Trisha Ahmed, File)

Endowments face little federal regulation compared with other fundraising institutions. And there have long been calls for more transparency.

Maloney said portfolio managers might just say they don’t want to bother with all the attention.

University endowments have increasingly been targeted for divestment by activists. Over the last decade, students have pushed universities to cut financial ties with fossil fuel producers, weapons manufacturers, tobacco companies and prison firms. Often it has been done in tandem with students in the Boycott, Divestment and Sanctions movement, which seeks to isolate Israel from being able to participate in the global economy by pressuring companies or artists to boycott the Jewish state.

Most colleges have held firm, saying their investments provide financial aid for future generations and should be protected from politics.

Neal Stoughton, a professor of finance at the University of Waterloo in Canada, said colleges are wary of releasing information because they don’t want competition from other universities or institutions. He likened it to billionaires’ reticence to share investment tips.

“Those types of people don’t tell you exactly where all their money is,” said Stoughton, the former director of the Endowment Research Center at Vienna University of Economics and Business in Austria. He is currently doing research and consulting at the University of Arizona.

At the University of Michigan, officials responded to recent calls for divestment by saying the institution’s decades-old policy “is to shield the endowment from political pressures and to base our investment decisions solely on financial factors such as risk and return.”

Michigan’s policy allows for exceptions — it divested from tobacco companies and apartheid-era South Africa — but the bar “has intentionally been set extremely high.”

Officials disclosed only that there are no direct investments with Israeli companies and that indirect investments through funds amount to less than $15 million, a small fraction of the university’s $18 billion endowment.

Universities also cite the complexities around divestment. Much of endowments is often held in investment funds that bundle large numbers of assets together. It can be difficult to trace exactly where the money goes, and universities generally can’t pick and choose among a fund’s investments.

Other schools that have opted for the disclosure route include Northwestern University outside Chicago, which said in an agreement posted to its website last week that it will answer questions from any internal stakeholder about holdings.

Signs are displayed outside a tent encampment at Northwestern University on Friday, April 26, 2024, in Evanston, Illinois. Students want the university to divest from funds connected to Israel or that profit from its war in Gaza. (AP Photo/Teresa Crawford)

The University of California, Riverside, also said it would start posting information online with a goal of “full disclosure of the list of companies in the portfolio and the size of the investments.”

And in New York state, Vassar College vowed “greater transparency about major independent contractors,” as well as a review of a proposal for divestment from defense-related investments.

At the University of Minnesota, the decision to provide more endowment details came as part of a deal to end protesters’ encampment on the Minneapolis campus.

Tye Gregory, CEO of the Jewish Community Relations Council, said disclosure will just lead to calls for divestment and that risks harming Jewish students without actually changing the course of the fighting in Gaza.

“From my experience, unless you give in to all of their demands, they’re not going to relent against the administration,” he said. “And the administrations are not in a position to give in to all their demands. So my advice — not that they’re going to take it — is just not to negotiate on that. You’re not going to make them happy.”

Abu, who is one of the protest leaders, said the students plan to demand full disclosure of all investments at Friday’s regents meeting, beyond just the $5 million that university leaders have provided details about already.

The information provided by the school names different companies that the university has holdings in through investments or through funds. The list includes defense contractor Honeywell, which protesters have singled out during rallies. Honeywell didn’t immediately return an email message from The Associated Press seeking comment.

The goal, Abu said, is to “target all weapons companies that the university is invested in, and all stocks or contracts and bonds in countries that are complicit in war crimes.”

Anti-Israel student protests over the Israel-Hamas war in Gaza and academic ties with Israel have spread across the United States, where encampments have been set up at many schools.

People rally on the campus of Northwestern University demanding the school divest from Israel, on April 25, 2024, in Evanston, Illinois. (Scott Olson/ GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Critics of the encampments — from US President Joe Biden to college presidents to Jewish students and leaders — have condemned instances of antisemitism at the protests and reports of Jewish students being harassed. The rhetoric at protests has explicitly denied Israel’s right to exist, with chants such as “We don’t want two states, we want ’48” and “There is only one solution, Intifada revolution” being commonplace.

The war broke out on October 7 when Hamas terrorists infiltrated Israel, killing some 1,200 people, mostly civilians, and kidnapping 252, while committing mass atrocities and sexual assault.

The ensuing Israeli offensive against Hamas has killed over 34,000 people in Gaza, according to the Hamas-run Gaza health ministry. This figure cannot be independently verified and does not differentiate between civilians and members of terrorist groups. Israel says it has killed over 13,000 Hamas operatives in Gaza since the beginning of the war and about 1,000 in Israeli territory on October 7.

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