The Board of Regents has announced it will not divest from companies linked to Israel, reaffirming its longstanding policy to shield the endowment from political pressures and base investment decisions on financial factors such as risk and return.
“The Board of Regents has heard multiple calls for divestment from our endowment of companies linked to Israel. We have listened carefully,” Regent Sarah Hubbard said at the board’s March 28 meeting. “We are not moving to make any divestment of any kind.”
more information
The primary purpose of the university endowment is to generate the greatest possible income, subject to the appropriate amount of investment risk, in support of the university’s missions of teaching, research, patient care and service.
Hubbard noted that, to accomplish this, it is important that the university maintain a diversified investment portfolio. “To do otherwise would be to increase our investment risk and decrease our investment returns,” she said.
This investment approach has been reviewed and consistently affirmed by university leaders, including the regents, most recently in 2015 and in 2017.
“The university’s governing board and officers have a fiduciary responsibility to protect our assets for the long term so that we may leave to succeeding generations a university at least as strong as the one with which we have entrusted,” she said.
Regent Michael J. Behm noted he had seen inaccurate information shared about the university’s investments, specifically that one-third of the endowment was invested in companies with ties to Israel.
“I asked the endowment team about that and, in actuality, less than one-tenth of 1% of the endowment is invested indirectly in such companies,” he said. The university has no direct investments in such companies.
The university’s endowment is essential to sustaining academic excellence because it provides a guaranteed, perpetual source of income through distributions, over 90% of which last year supported scholarships, instruction, health care and research.
Gregory Croisdale
I am unsure how it is simultaneously true that “less than one-tenth of one percent of the endowment is invested indirectly in such companies [with ties to Israel]”, but divestment would “risk and decrease our investment returns”. Is it the right message to send to the world that our supposedly insignificant investment in an unambiguously territorial war is somehow crucial to the operation of the university? Is there no room for moral guidance in our fiscal decision-making? I am sorely disappointed in the university’s position and explanation here.
Andrew Thompson
Regent Behm says: “…less than one-tenth of one percent of the endowment is invested indirectly in such companies.” And the Record continues “The university has no direct investments in such companies.” OK. That sounds great. That makes divestment seem like a very, very easy thing to do in this case. 1/1000th of an almost $18 Billion total endowment equals only about $18 Million in investments. Lets move those $18 M somewhere else.
Regent Hubbard says: “The university’s governing board and officers have a fiduciary responsibility to protect our assets for the long term so that we may leave to succeeding generations a university at least as strong as the one with which we have entrusted.”
Similar to the divestment from fossil fuels, which endanger future generations and the long term viability of UM, I would argue that investing in Israeli assets during wartime is also hurting current students, long term viability of the U, and international security. We decided to divest from Russia in ’22 during their military campaign. There is also the moral position of divesting from an apartheid state, which UofM decided to do in ’88 after more than a decade of pressure from students and politicians. I hope it won’t take as long in this case, but it seems the divestment movement is clearly growing, not shrinking.
Andrew Thompson
Completely agree!
Stephanie Collier
This is embarrassing and disgraceful. The same university is currently pushing a new policy to more harshly punish and even criminalize students who are bravely pushing back and protesting leadership’s stance on Israel.
Free Palestine.
Aidan Carry
“less than one-tenth of 1% of the endowment is invested indirectly in such companies,”
“To [divest] otherwise would be to increase our investment risk and decrease our investment returns,”
If the investment size is so insignificant, then why is it so hard to invest that money elsewhere? This is unbelievably disappointing. These statements come off as tone deaf and bring shame to the university.
Vic Divecha
I hope the comments highlighting the history of divestiture and inherent contradictions will make our leadership quickly reconsider and re-evaluate their positions. Divestiture works and we can be leaders and the best to prevent starvation and decimation of a culture.
Kevin Chan
So as to not restate what has already been written, I concur with ALL of the above comments.
Robert LaRoe
It’s always about the money. Even at a public institution.
If anyone is curious, the board of Regents is made up of: 5 JDs and 3 MBAs. Is it any surprise they prioritize finalitial gain/stability over doing what’s right? I’m sure they are all wealthy, and that’s what they understand. Money.
This doesn’t feel like a representative group, especially in times like this.
Ruth Gretzinger
For those of you who want the regents to ‘do the right thing’ the good news is they’re already doing it! So you don’t need to worry. 😉
Thank you, Regents and President Ono.
Robert LaRoe
@Ruth That’s condescending and dismissive. In an effort to have a meaningful discussion, why do you think their decision is correct?
Shamma Siddiqi
To echo other comments, if the amount of investment is so small, it should be easy to divest. You’ve already set a precedent for divesting from South Africa and Russia. The Admin is being cowardly and has no moral compass. So disappointing.
Camron Amin
The following criteria have been offered regarding the creation an ad hoc committee to explore divestment (which is understood to be a departure from standard investment practice):
“1) The concern to be explored must express the broadly and consistently held position of the campus community over time;
2)There must be reason to believe that the behavior or action in question may be antithetical to the core mission and values of the University.
3)There must be reason to believe that the organization, industry or entity to be singled out may be uniquely responsible for the problems identified.”
It seems these criteria have been met in regard to the crisis in Gaza. The ad hoc committee formed in regard to this issue would not necessarily recommend divestment in all cases. However, in cases where it did, the rationale for divestment would serve as an important affirmation of our “core mission and values.” And while what the Netanyahu government is doing may be the specific catalyst for this divestment question, the ad hoc committee could also help us formulate investment policies that are fiscally sound but more in line with our core mission going forward. The principles at stake here are not partisan or national but protecting fundamental human rights, even in the context of war and conflict.
It would be helpful if the Regents would clarify how the criteria have not been met to form an ad hoc committee in this circumstance. And, having articulated that, the Regents should then give advocates of divestment an opportunity to respond with evidence for the Regents to consider. Without that kind of serious and urgent engagement, the Regents are effectively claiming that making money for the university mission is always good, no matter how it’s made. And that somehow our hands are tied when it comes carefully reviewing alleged corporate misconduct- especially when the allegations are made in a politically charged environment.
That can’t be what we’re about.
It may be the case that divestment is not feasible or effective in changing corporate behavior in this circumstance . But using that unproven assumption to “shield” the Regents from a difficult decision to accept or reject a duly appointed ad hoc committee’s recommendations is not a model of leadership that can reassure or help heal a very wounded campus community.