Where Does our Money Go? Divestment and the WWC Endowment
Cal Dooley | November 6, 2024
Israel’s genocide in Gaza, which has now resulted in the deaths of over 42,600 people including at least 16,765 children, has sparked global outrage and resistance. Here in the United States (U.S.), students have drawn attention to the endowments of their universities and colleges, many of which hold investments in Israeli companies and the U.S. arms manufacturers supplying Israel or otherwise have institutional ties to Israeli occupation.
Last year, nearly 140 colleges across the U.S. saw demonstrations, according to the BBC. These included rallies, sit-ins and most notably encampments demanding an end to complicity in the genocide. Shortly after these protests erupted, a group formed at Warren Wilson College (WWC) put forward a petition demanding WWC “Divest from companies supporting Israeli apartheid and human rights violations in Palestine,” which reached 183 signatures online and more in person.
To learn more about how our tuition money is being invested and get an update on the divestment campaign, I spoke with Mary Davis, the school’s controller, and Anthony Rust, chair of the investment committee as well as two students representing the WWC Divest from Israel Campaign.
Divestment campaigns trace their roots back to the movement against South African Apartheid, particularly with the actions of the Student Nonviolent Coordinating Committee (SNCC) and Students for a Democratic Society (SDS) in the 1960s. Divestment expanded to greater popularity as a rallying call among students in the 1980s. Similar campaigns cropped up again in the 2010s, this time focusing on divesting from the fossil fuel industry.
One such student campaign took place at WWC in 2015 at WWC, successfully leading the board of trustees to reassess the school’s investment policies. Students with the current divestment group have pointed to the 2015 changes as examples of what they hope to achieve.
Israel’s dependence on the U.S. comes in various forms, including a cumulative $230 billion in military aid and $80 billion in economic assistance since the state’s creation in 1946, the largest cumulative recipient of U.S. aid. Alongside military aid, the U.S. also has significant economic and educational ties with Israel. To challenge U.S. support of Israel and to directly target economic cooperation with Israel, activists with the BDS National Committee sparked a movement that “aims to put pressure on Israel to comply with international law and to persuade private companies to end their participation in Israel’s crimes.”
Most recently, a major focus of the BDS movement has been college and university endowments. WWC’s endowment currently sits around a market value of $55 million. This money is controlled by the Board of Trustees Investment Committee, chaired by Rust. The investment committee passes on their recommendations to Meketa Investment Group, a Massachusetts-based investment consulting and advisory firm hired by the school. Together, they select the range of investment firms that handle the endowment’s funds. WWC’s investment policy has made significant shifts in the past decade, a change which Rust says began with the fossil fuel divestment campaign led by students in 2015,
“We started on this journey to transform how we look at and manage our endowment fund 10 years ago with the divestment of fossil fuels from the portfolio,” Rust said. “As you probably know we were one of the early endowment funds to do this. That was a pivotal turning point for us and we subsequently decided then to be all in on our endowment fund engagement.”
WWC reached 100% divestment from fossil fuels in 2020. Since 2015, WWC has also partnered with the nonprofit “As You Sow,” to implement a proxy voting system aimed at influencing corporations towards greater transparency and better practices regarding environmental, social and governmental (ESG) issues.
A main point emphasized in WWC’s shift toward more ethical investment has been through the hiring of firms under more diverse ownership.
“In 2015, the list of investment firms managing our money were all white male owned and managed,” Rust said. “Fast forward to today, because of our Responsible Investment Policy (RIP) mandates to be more inclusive and grant opportunities to all investment firms, today approximately 30% of the investment firms who manage money for Warren Wilson are diverse investment managers e.g. investment firms of color and women-owned investment firms.”
While information on our investment policies and portfolio is not currently available to the wider community. Rust says that transparency is no issue for the board.
“Upon request, we are happy to provide this information,” Rust said. “We do not put this information on the school's website as there has never been enough interest in this information to warrant taking up space on the school's website.”
The board also implemented a system for inclusions and exclusions in our investments, based on the guidelines created by the ESG subcommittee. This means that certain positive investments in areas such as local economic development with a focus on low-income communities, racial equity, and environmental sustainability have been added to WWC’s portfolio.
While some positive changes have been made over the past decade, students with the BDS group still hold concerns about where the endowment’s money is being invested, emphasizing the severity of the issue at hand:
“I think it's easy to feel hopeless in the face of such great adversity on active genocide,” one of the students with the BDS group said. “And I kind of imagine, if I was alive during the South African anti-apartheid movement, or during World War Two, as the Holocaust was going on, this is our generation's large justice movement around an apartheid regime and active genocide of entire peoples. I can't, as we said, I can't be complicit.”
While WWC’s endowment has taken steps towards defining more ethical guidelines, the student’s concerns are not unfounded. The current investment guidelines, shared with us by Rust, only include fossil fuels as a target for exclusion. Rust did not share whether or not the endowment is invested in BDS targets, such as Intel, Caterpillar, Chevron and Volvo.
Rust confirmed that the investment committee was made aware of the divestment group’s petition and discussed it at their meetings last April. While a decision hasn’t been reached, Rust shared that the issue would be on the agenda again for their meetings in October, though he added that all issues other than hurricane relief had been put on pause following Helene. Neither Rust nor Davis offered comment on what investments WWC’s endowment has in Israeli companies or those targeted by the BDS campaign.
Davis was able to share that WWC’s endowment has between 0.2-0.3% exposure to arms manufacturing.
“By way of comparison, we studied the fossil fuel divestment subject for 8 to 9 months before we made a decision,” Rust said. “We had our investment advisor do lots of research and analysis on the financial impact on the endowment funds portfolio if we were to divest. We would in all likelihood pursue the same type of diligence for arms manufacturers.”
While the BDS group sees securing exclusions for companies complicit in the genocide as the immediate goal, students also expressed the long-term goal of having more active involvement in decision-making on school policy and urged students to get involved with the campaign.
“Holding Wilson accountable for these ethical promises that they continue to make, trying to build a relationship with administration — a long-term relationship where divesting from Israel in any way is the baseline,” the student said. “A broader focus is a more general collaboration between the BDS movement and all of campus. Forming together into one group is going to be better than, you know, individually boycotting a particular brand or whatever, if we can all come together and specifically ask for Wilson to divest, we have a greater chance of success. A broader focus is a more general collaboration between the BDS movement and all of campus.”
The group recently had planned a fundraising event to be held on October 6, which was delayed by Hurricane Helene. Updates for meetings and events can be found on their Instagram page WWC Divestment.