In an effort to stem the protests that have rocked campuses across the country, a handful of universities have agreed to reconsider investments in companies that do business with Israel.
With only a few days left until students’ summer vacation, the agreement, which eased tensions on campus, would have been unimaginable a week ago. And they are a gamble, potentially putting the university in conflict with influential donors, politicians and students who support Israel.
Schools are still far from being able to withdraw funds. Brown University, a liberal Ivy League institution, agreed this week to hold a board vote this fall on whether to divest its $6.6 billion endowment from its Israel-related holdings. Instead, a pro-Palestinian encampment on the campus’s main lawn was cleared.
Northwestern University and the University of Minnesota also struck deals with student demonstrators to clear their camps in exchange for promises to discuss investment policies for schools around Israel. The move could increase pressure on administrators at universities such as Columbia University, the University of Michigan and the University of North Carolina, where protesters have made divestment from Israel a central rallying cry.
The issue of financial divestment from Israel has long been an untouchable issue in American politics and for the Wall Street titans who control university endowments and are the source of large amounts of donations. Taking sides now is a surefire way to galvanize at least one faction in a conflict that divides the campus, divides the Democratic Party, and hands Republican lawmakers a club with which to attack the organization.
Even new talk about divestment has sparked alarm among wealthy donors, whom most universities dare not oppose, and has been the first since the Oct. 7 Hamas attack on Israel and subsequent invasion of Gaza on college campuses. It has been influential in the debate. Billionaires including fund manager William A. Ackman and private equity boss Mark Rowan are taking issue with the presidents of Harvard University and the University of Pennsylvania over their handling of anti-Semitism on their campuses. A campaign was launched to have him removed from office.
Brown’s agreement will allow students to make their case and for the university’s governing body, the Brown Corporation, to vote on the issue in October. Parts of the plan were negotiated in part by University President Christina H. Paxson, who met with student protesters in person last Friday, and on Monday, a small group of activists spoke to companies about a proposed sale later this year. It proposed a “path forward” that included allowing talks. The university announced “on the moon.”
However, Dr. Paxson’s original proposal did not include putting the divestment proposal to a vote. The deal comes after two university negotiators and six students involved with the Brown Divest Coalition, one of the groups behind the movement, reached an agreement on Tuesday, the university and several students said. That’s what it means.
The agreement allows the university to begin managing the facility immediately, allowing students to finish classes and hold in-person graduation ceremonies and reunions this month. One investor, who has donated heavily to the university and described himself as an Israel supporter, said government officials had assured him that Mr. Brown ultimately had no intention of withdrawing from Israel. .
The donor said the administration could still take steps to block the vote.
Braun spokesman Brian Clark said the company is “fully committed” to voting on the issue.
Some other donors said they see the deal as a prudent way to postpone the issue until the situation in Israel and Gaza is less intense.
But several donors, ranging from recent graduates to billionaire investors and billionaires, said in interviews that making a divestment would cross a line. They said they would reduce or cut donations to universities entirely.
They were skeptical that Mr. Brown would ultimately pull money from Israel-related investments, but some expressed concern that their alma mater had capitulated even partially to the protesters. I was disappointed in what I saw. Most requested anonymity due to the sensitive nature of the issue.
Harry Chalfin, a 26-year-old Brown University graduate whose parents also earned degrees from Providence, Rhode Island, said he will be watching the sale discussions closely.
“We will consider using our family’s considerable, but not insignificant, financial strength to pressure Brown on this matter,” said the investment manager. said Chalfin, who is a father.
The university carefully manages its endowment, typically disclosing little about how it invests its billions of dollars, and considering moving the funds out of Israel is a major threat to the institution’s commitment to Gaza. It’s a victory for agitated protesters who say they are receiving insufficient support from the government. This position equates investing in Israel with investing in fossil fuels, which is now off-limits for many universities.
“There are going to be some donors who are against this. Our argument is, ‘That doesn’t matter,'” said the Brown University sophomore who spearheaded the protest on the university’s main lawn. Raffi Ash said.
Divestment campaigns targeting Israel predate the current Gaza war. Brown University’s formal campaign dates back to at least 2019, when students voted in favor of a referendum that called for the university to divest from “companies complicit in human rights abuses in Palestine.”
In 2020, a university committee reviewing Brown University’s investment ethics standards recommended that Brown University divest from 10 companies it found to be supporting human rights abuses by Israel. It also outlined criteria for considering ethical investments in the context of the Israeli-Palestinian conflict.
At the time, Dr. Paxson rejected the effort, saying donations were “not a political tool” to solve complex problems. In 2021, she refused to proceed with her sale proposal because it lacked the “required level of specificity”.
The latest divestment proposal uses the same criteria set in 2020 and borrows heavily from the older proposal. Student protesters see this as a practical way for the school to pressure Israel to agree to a ceasefire, citing Brown’s divestment as a precedent. From South Africa in the 1980s, Darfur 20 years ago, and direct investment in fossil fuels since 2017.
Supporters of Israel say the comparisons are misplaced and see the country’s invasion of Gaza as a defensive response to the October Hamas outrage and hostages. One long-standing response to these calls is that divestment from Israel stems from anti-Semitism. Activists are targeting the world’s only Jewish state and are not seeking divestment from other countries accused of human rights atrocities.
And Rhode Island is one of more than 20 states that have enacted laws punishing efforts to boycott, sanction, and divest from Israel, citing free speech. It is being objected to.
However, there are also practical challenges to divestiture efforts. One is simply identifying what to sell and how to define the terms of such a policy.
Some academics have questioned whether divestments work, with studies finding they have little effect on the profits or behavior of target companies. Others point to the complexity of the logistics of a sale. As a private institution, Brown is not required to disclose all of its endowment investments and, in fact, says little about its endowments. Approximately 96 percent of the vault is invested through external asset managers.
The Brown Divest Coalition said it is calling on universities to divest “stock, endowments, donations, and other financial instruments in companies that promote and profit from Israel’s human rights abuses.” The report outlined criteria for divestment from certain companies, based on a list compiled by three organizations, including the Office of the United Nations High Commissioner for Human Rights.
The students admit they don’t even know if Brown has invested in those companies. That’s because what Brown does with that money, and how the institution and other schools dispose of them, is anything but straightforward.
Brown does not disclose external asset managers or their investments. Members of Mr. Brown’s corporation did not respond to requests for comment.
“The university does not support the proposed sale,” Brown University spokesperson Clark said in a statement. “Whether you are for or against divestment, this vote will bring clarity to an issue that has long been a concern to many members of our community.”
Several steps remain before the Brown board votes on the sale. First, five of the protesting students are scheduled to meet with five members of the corporation at a regular meeting this month. In a letter to university officials on Tuesday, Dr. Paxson said he hoped the meeting would “enable a full and frank exchange of views.”
“This is a great way to put the issue aside,” said Brown University alumnus and donor Stewart Baker.
