Students’ Demands for Divestment From Israel Have Mostly Failed

Last spring, many of the students protesting the war between Israel and Hamas demanded that their universities divest from weapons manufacturers and other companies profiting off the bloodshed in Gaza. Some called for total divestment from Israel, accusing college leaders of being complicit in a genocide as the death toll of Palestinian civilians continued to climb.

Multiple universities agreed to weigh the divestment demands—among other concessions—often in exchange for students dismantling encampments. So far, few have actually moved to divest; some boards are still weighing the option while others have voted against it. But a handful of institutions have vowed to disclose their holdings, and some, such as San Francisco State University, have agreed to re-evaluate their investment screening processes.

Divestment Decisions

Most boards that have voted on divestment have shot down the idea.

Earlier this summer, boards at Occidental and Williams Colleges defied student demands by voting against divestment from weapons manufacturers or companies with ties to Israel. Each offered a similar explanation for its decision, arguing that divestment was a divisive move fraught with financial risk to its endowment.

At the University of Minnesota, the Board of Regents announced late last month that it will adopt an institutional neutrality policy governing its endowment, rejecting divestment demands from protesters.

“For the past several months, we have sought out expert analysis and a variety of perspectives on how the University invests its Consolidated Endowment Fund,” board chair Janie Mayeron said in a statement announcing the decision. She added that, in seeking feedback, it was “clear our community is divided on the topic” and the decision not to divest “honors our fiduciary duty and the long-term needs of the University.”

Disappointed pro-Palestinian student protesters responded with a march on the Twin Cities campus. In a social media post, they accused the board of skirting “responsibility for divestment” and financing “human rights violations in Gaza,” promising to press the issue further this fall.

But San Francisco State University has charted a different course.

Following recommendations from a working group that included students, faculty and administrators, the university, part of the California State system, will disclose its investment quarterly and add new screening policies for investment decisions, Jeff Jackanicz, vice president of university advancement and president of the San Francisco State Foundation, announced in a letter to the campus community.

“Current guidance which limits investment in fossil fuels while emphasizing investments which advance race and gender equity will be expanded to remove investment in any company whose revenues come from weapons manufacturing,” he wrote. Jackanicz added that the foundation will screen out investments in any company making 5 percent or more of its revenue from weapons manufacturing.

That change appears to mean that the university will divest from weapons manufacturers Leonardo and Lockheed Martin, the software company Palantir, and Caterpillar, according to an SFSU Students for Gaza statement that accused all four of supporting “Israel’s genocidal attacks on Gaza.”

A final vote is scheduled for late this year, according to SFSU spokesperson Kent Bravo.

“The changes have been approved by the board’s investment committee and the executive committee. It moves to the full board for a first reading and discussion at the September board meeting and official vote in December. Because of the heavy consultation with these two committees, we do not anticipate concerns when it goes before the full board,” Bravo said.

The move follows a similar decision at Union Theological Seminary in the City of New York, which announced in May it will apply new investment screenings to its endowment holdings to divest from companies profiting off the war between Israel and Hamas and other conflicts. Union Theological Seminary was likely the first U.S. institution to vote for a divestment effort, though its president told Inside Higher Ed in May it has long avoided weapons manufacturers and other industries it finds objectionable, so there was little to divest.

California State University, Sacramento, took similar action in May. University officials announced that the institution has no direct investments “in corporations and funds that profit from genocide, ethnic cleansing, and activities that violate fundamental human rights” but that it will review indirect investments and “pursue [a] human rights–based approach to investments.”

Evergreen State College also began exploring the divestment process over the summer, creating a task force to revise investment policies with an emphasis on shedding holdings tied to companies profiting off the war or the occupation of Palestinian territories.

At Brown University, a divestment vote is looming in October. Ahead of that vote, attorneys general from two dozen Republican-led states warned university leaders in a letter late last month that divesting from Israel could prompt states “to terminate any existing relationships with Brown and those associated with it, divest from any university debt held by state pension plans and other investment vehicles, and otherwise refrain from engaging with Brown.”

Wesleyan University and Chapman University will vote on divestment later this month.

Other institutions, such as the University of Massachusetts at Amherst and the New School, have been criticized by student protesters for not taking action or delaying divestment discussions.

Responding to Demands

With the war nearing the one-year mark and no end in sight, divestment demands continue to animate students who want colleges to leverage pressure on Israel to end the fighting.

And the early days of the fall semester have already been marked by disruptions and arrests. But despite the pressure, experts expect few institutions to yield to student divestment demands, due to the financial complexity and the potential political consequences of such action.

Chris Marsicano, an assistant professor of educational studies and public policy at Davidson College and founding director of the College Crisis Initiative, noted that the universities that have moved forward on divestment tend to put forth rather narrow and targeted proposals.

At San Francisco State, for example, four companies have been tagged for divestment. Divestment proposals at Brown are focused on eight companies. Those specific calls for divestment are easier to accommodate than the sweeping demands students often make, he said.

“In most cases, [protesters] have asked for divestment from not just Israeli businesses, but businesses that do business with Israeli businesses or the Israeli government,” Marsicano said.

Such demands might mean cutting financial ties with companies like Amazon, Coca Cola, Google and other marquee stocks, which he said are “a hard sell for university endowment managers” because students are essentially asking institutions to divest from the global economy. Most endowment managers, he said, aren’t willing to isolate themselves from such investments.

Michael Poliakoff, president and CEO of the American Council of Trustees and Alumni, believes divestment is “an unimaginable slippery slope” that boards and administrators need to reject.

“They need to make it clear that management of the portfolio is the duty of the trustees,” Poliakoff said.

Divestment efforts could lead to serious harm for institutions, he said. And in rejecting divestment, “responsible trustees” are “having to clean up the mess of administrators who didn’t have the will to enforce campus rules right from the very start.”

While “there will be no end to the amount of political posturing and pressure” on universities to divest, Poliakoff said, he believes universities need to draw a sharp line on protests and provide clarity for students on the consequences for violating campus rules.

Recent guidance that ACTA provided for trustees calls for the same approach, urging board members to resist a movement the organization casts as antisemitic and fiscally irresponsible.

Regardless of how a board votes, there will likely be consequences, whether it’s political backlash from divestment opponents or student outrage over the decision not to cut ties with certain companies.

While administrators were largely caught off guard when encampments popped up in the spring, Marsicano believes they are better prepared for fall protests. The summer break—and in some cases, the concession to consider divestment—have bought them time, which he compares to taking a timeout while trailing late in a basketball game. During that timeout, colleges have been able to draw up new game plans, including code of conduct changes and other policy tweaks.

“The colleges promised that there would be a vote on divestment. They did not necessarily promise that the vote would go the way the student protesters wanted,” Marsicano said.