One of the demands of the campus protestors is for the universities to "divest from Israel". Do any of these universities actually send money to Israel? Do they fund or invest in foreign arms companies? If so, why? And what money is used for it? Not student tuition fees, right? Given all the media attention on these protests I am surprised that more hasn't been covered on this part of it.
Universities are obliged to take very conservative investment stances when it comes to endowments and other revenue sources. And most will have a mix of active and passive investment pools. The passive ones, for example market index funds? They simply 'shotgun' the market concerned, investing in all the listed entities in that market in proportion to that companies weight/capitalization as a % of the total market. As a result they inevitably end up with investments like the ones being complained about. The thing is though that no conscious bias is shown when they do so. Basically Unis are investing in the MARKET or the index itself not any specific company in it. Further complicating the issue is that listed companies can and do sell products and components to second parties both domestic and foreign who utilize those items in end products that they sell on to controversial clients - in this case for example the Israeli defense forces. You can use 'ethical' investment strategies but that involves active portfolio management and hire fees. Simply put its very hard not to invest in some company that some activist group on campus won't have an objection to and more expensive to try because its extremely hard to winnow out all the interconnections between what could be regarded as unethical and ethical firms.
I am surprised that Universities are investing at all. They are always asking alumni for money so I figured they would not have much it any excess.
Universities have endowments that are invested to generate interest. This interest/investment gains can pay for all kinds of things, faculty lines, student fellowships, athletics, .... In our department, we have several endowed fellowships for graduate students. The investing is handled by the university administration, so I have no idea what they invest in. My feeling: Most likely broad market based index funds. These are likely to include investments in US defense contractors who ship arms to Israel. In fact, I probably have those companies in my own 401k portfolio, since I invest myself in S&P500 index funds. This is what the "divestment" calls are about, the protestors are trying to defund the Israel war effort. Much of the endowments ususally come from donors, many of them alumni. This is how the game is played in the opposite direction. Wealthy Jewish alumni donors can threaten to withdraw donations, which is exactly what one of them did to get the Harvard president fired.
