The headline captured the stalemate following campus protests that swept U.S. universities this spring. “Divesting University Endowments: Easier Demanded Than Done.”
As a professor and researcher, Todd L. Ely has been inundated by requests from the media to unravel the complexities of university endowments, which totaled more than $1 trillion in 2021.
Ely wrote the essay posted under the stark headline published by The Conversation, an online site.
Student protesters remain adamant that their demands be met. As a way of expressing solidarity with Palestinians, they want divestment of university holdings that might support Israel, and therefore the Israeli Defense Force’s war in Gaza.
Protests have been peaceful on local campuses, with only a few arrests at the University of Kansas in Lawrence. But the end of the semester is not likely to stifle the push for disinvestment.
Concern about the fighting in Gaza, along with conditions that predated Hamas’ murderous Oct. 7 attack on Israeli citizens, has grown in recent months.
In fact, pressure to react to the plight of Palestinians is circling back to elected officials.
Many of the protesters who marched through the Country Club Plaza on Saturday will gather Thursday afternoon in the Kansas City Council chambers. They’ll support recognition of the Palestinian American Medical Association (PAMA) and urge Mayor Quinton Lucas and council members to press for a ceasefire.
Council member Johnathan Duncan was the only elected Kansas City official who spoke at the rally on Saturday.
“I am asking you to not only email your city council members. I am asking you to call. I am asking you to send letters. I am asking you to show up in person and to make sure that they understand that this is not some distant crisis,” Duncan said. “But it is right here, right now in their faces.”
Dr. Jamil Abuzetun, a Kansas City area cardiologist and a member of PAMA, also spoke.
Later, right before the marchers circled the Plaza, Abuzetun explained that Palestinians in Gaza are a young population, which is one reason the death tolls since Israeli forces began fighting Hamas have included so many children.
Health care conditions were poor prior to the fighting, he said. Now, hospitals are virtually non-existent.
PAMA evacuated five of its health care workers from Gaza during the weekend, but 14 more remain.
‘Dissent about America’s role in the world’
On Sunday, President Joe Biden addressed the demands of student protesters during a commencement speech at Morehouse College in Atlanta.
Some of the graduates in the audience turned their backs to Biden during the speech, during which the president acknowledged “dissent about America’s role in the world,” according to coverage by NPR.
Morehouse, a historically Black campus, has seen student protests like the ones on local campuses, but without building encampments or arrests.
Morehouse President David Thomas vowed to end the graduation ceremonies before he would allow scenes of students being arrested and led away in national media coverage.
The valedictorian, DeAngelo Fletcher, ended his remarks by calling for a ceasefire, according to NPR.
“For the first time in our lives, we’ve heard the global community sing one harmonious song that transcends language and culture,” Fletcher said. “It is my sense as a Morehouse Man, nay — as a human being — to call for an immediate and a permanent ceasefire in the Gaza Strip.”
Like the appeals being made to Kansas City council members, support for a ceasefire is relatively straightforward.
In contrast, the issue of disinvestment is thorny, and filled with complications.
Moreover, by highlighting endowments, student protesters have tapped funding problems beyond the current crisis overseas.
Institutions of higher education, both private and public, have grown increasingly dependent on endowments in recent decades. As state legislatures cut funding, this opened the door to private equity to play a larger role in university finances, experts said.
The result is a deepening of inequity in higher education and access to the lifetime earning benefits of a college degree.
States block divestment
The protesting student’s pleas echo what happened in the late ‘80s and early ‘90s, when colleges divested from holdings believed to be supporting South African apartheid.
And yet, investments, along with university dependence on them, are more complicated today, several experts said.
Moreover, Kansas and Missouri have legal obstacles to disinvestment.
Both states passed laws in recent years against cutting contracts and investments that benefit Israel. About 40 states have similar laws.
The anti-boycott and disinvestment laws are a hard stop, Ely and other experts said.
“In a lot of ways, it just right away takes that discretion from the institutions and kind of lets them off the hook,” said Ely, an associate professor of public affairs at the University of Colorado in Denver.
The University of Kansas in Lawrence is a good example.
When asked by media about its endowment holdings, KU replied that it doesn’t generally discuss investments beyond what is posted online.
University investments are managed with this goal: “to ensure that the funds that donors entrust to us are managed so that they can support KU in perpetuity,” said Michelle L. Keller, assistant vice president of communications for KU Endowment, in a statement.
“We are constrained by Kansas law (UPMIFA) and the Endowment’s policies, which prohibit us from incorporating political attitudes or social issues into our investment decision-making,” read part of a statement. “Instead, the law requires that we seek to maximize returns within an acceptable level of risk. Instead, the law requires that we seek to maximize returns within an acceptable level of risk.”
KU Endowment was founded in 1891 and is the oldest of its kind and one of the largest at a public institution in the United States, according to the most recent report of the Kansas University Endowment Association.
Total assets in the fiscal year ended in June 2023 were reported at $2.86 billion, up from $2.76 billion the previous year.
KU student Rose L. (who asked that Flatland use only her last initial), was among those who gathered at the “solidarity encampment” in May outside of Fraser Hall, calling for the disinvestment of the university’s finances from Israel.
“We don’t know what they’ll decide,” she said of KU administrators. “We think what we’re doing is totally fine.”
Local police were later called by the university and the area was cleared of the encampment.
‘Bankers in the Ivory Tower’
Beyond allowing sustained protests, the Kansas law, approved in 2017, would have to change for the response to be much different.
“Public universities are governed by state governments however state lawmakers choose to exercise that authority within the framework of state constitutions and any superseding federal laws,” said Charlie Eaton, in an email. “So, divestment would require changing any state laws that prohibit it.”
Eaton is an associate professor of sociology and the cofounder of the Higher Education, Race, and the Economy Lab at the University of California, Merced.
The Merced campus is noted for its small endowment portfolio in a survey by U.S. News.
Eaton’s expertise is in university financing, particularly how declining state support for higher education has led to increased reliance on financial markets.
Eaton is the author of “Bankers in the Ivory Tower: The Troubling Rise of Financiers in U.S. Higher Education.”
The 2022 book chronicles “the financialization of higher education,” tracing how private equity hedge funds, investment banks, commercial banks and their leadership have contributed to rising inequality in the U.S.
It’s a piece of the protective stance that institutions are taking with their endowments. Higher education is more dependent on such investments than in previous decades, in part due to how state funding for higher education has been cut by legislatures.
One outcome that concerns Eaton is the fact that wealthy people tend to give to elite universities that enroll fewer students, and certainly fewer of less advantaged backgrounds.
“We could do a lot more for higher education equity and inclusion if we increased public university funding with higher taxes on financiers instead of letting financiers donate mainly to elite private universities,” Eaton said in a February 2022 interview with Inside Higher Education about his book.
Further, federal law and policy hinder divestment from Israel.
At the national level, doing so is seen as possibly discriminatory against Israelis and not in the U.S.’s best interest because Israel is considered innovative, and doing business there enhances the nation’s competitiveness.
Those policies, however, predate the current conflict.
Moreover, universities don’t control enough assets for their investment divestiture to have an impact on most of these industries.
“The existing evidence suggests that divesting doesn’t negatively affect from a financial perspective,” Ely said. “It does become largely symbolic and kind of seeking legitimacy for a claim and a belief.”
The global nature of investing makes this so.
Ely and others noted that universities could be more transparent and do a better job engaging students, who are upset that institutions where they pay tuition might be funding the war that has killed a reported 35,000 Palestinians and more than 1,200 Israelis since October 7.
But neither protesters nor universities seem to be engaging.
“Presidents of universities keep coming out and saying, ‘We can’t do this. We can’t do this,’ “Ely said. “And there hasn’t been any shift in the demands or the strategy taken by the protesters. So, it doesn’t appear that anybody is listening to each other.”
Flatland’s Cami Koons contributed reporting. This story was originally published by Flatland, a fellow member of the KC Media Collective.
