Hamas conflict have been dominating the airwaves. In

April, Columbia University turned into the epicenter of the

student protest movement, which quickly spread to more than 100

universities, including prestigious names like Yale,

Harvard and UCLA. One of the primary demands voiced by the

student protesters is - DISCLOSE - DIVEST

Across a number of college campuses, all throughout the

United States, students have taken over quads and campus

buildings, building encampments, arguing that their institutions

should divest their endowments from Israel, basically meaning

divesting from weapons manufacturers that support the

Israeli war effort. divesting from businesses in Israel and

divesting from businesses that do business.

Endowment, the financial backbone of many educational

institutions have become a pivotal point of student

protest. The significance of these endowments cannot be

overstated. They are the lifeblood that keeps many

universities running. Simply put, a simple glance at their

endowment would reveal how rich these universities are.

Currently, Harvard University is leading the pack with a $49.5

billion endowment that's important

To understand what university endowments are and how they

operate. These are the results of philanthropic contributions

from alumni gathered over time and then invested to support

some of the operating costs of the universities. Tuition only

covers usually a minority of the operating costs, the majority

comes from the proceeds of imbalance.

So in just a few weeks, college students all across the country

are going to start graduating and the second they graduate,

they're going to start receiving letters and phone calls from

their institution asking them to give to their endowment. What

they'll do is they'll give sometimes a small amount,

sometimes if they're particularly wealthy, a large

amount to the endowment. And what that means is an endowment

manager will then take that money and invest it in a variety

of options- whether it's ETFs, or index funds or private

equity, or hedge funds. And then after time each year, spin down

the returns on that. So they'll gain some returns, take some of

it out of the endowment, use it towards the operating funds to

fund a new generation of students who will eventually

graduate, start getting asked for money, start giving money

and the whole cycle begins again,

These endowments have famously okay. So there is a very often

not any information publicly available about what is

happening to these funds. And that is in fact one of the

student demands as well.

It's really hard to know exactly how much money of these

endowments is invested in Israel. It's hard to know for

variety of reasons. First off, endowment managers aren't stock

pickers are not managing day trading through an E trade

account. What they're doing is building a comprehensive

institutional plan that involves ETFs, involves hedge funds,

involves private equity. With all of those funds, it's

difficult to know what in those funds at any given time, which

companies in those funds at any given times are doing business

with Israel.

Corporate filings don't provide clear information on which

companies have exposure to Israel, because corporations can

list their foreign operations under any geographic unit of

analysis that they prefer. So some companies may list Israel,

these are the offices we have, these are the sales we have, but

they might group Israel within the Middle East and North

Africa, or they might group Israel within Europe and Asia,

but they might group Israel just as in abroad. They can choose

the geographic unit of representation on which they

report there is no requirement that you report at the country,

or even regional level. And so that makes it very hard to

understand who has exposure.

Student activists, however, are taking a proactive stance by

compiling a list of prominent companies engaged with Israel.

For instance, students from Colombia are advocating for the

university to sever ties with Google, Amazon and Microsoft,

among others.

It's pretty easy to find out whether or not Amazon is

providing Amazon web services to the Israeli government because

the Israeli government announces that Amazon is providing Amazon

Web Services. Ditto, Microsoft and Google anyone who's been on

the ground in Israel knows you can order a Coca Cola or Pepsi.

I mean, the global economy is so intertwined with the American

economy, that American marquee companies are nearly every and

so it shouldn't be a surprise that students are identifying

companies that are engaged with Israel because most companies,

at least those that would be in theS&P 500 are those that we

think of as major major companies in the global economy

are probably doing business with Israel.

(Students protesting the university's investments in

South Africa)

When discussing if divestment works, student protesters often

cite the South Africa divestment movement in the 1980s. In this

nationwide campaign against apartheid, US students convinced

more than 150 universities to divest from the involved

companies. Coincidentally, Columbia University, the

epicenter of the ongoing student protests was the first Ivy

League university to divest from South Africa.

( I ask you to give us your good wishes) 30 years ago, Nelson

Mandela was elected President of South Africa, functionally

ending apartheid. And part of the reason why South Africa was

able to achieve that massive political and social change was

because students all across the world and especially in the

United States were pushing for divestment. When they pushed for

divestment from South Africa, about 155 universities made some

action very few did a total divestment like what students

are asking for now. But 155 universities divested in some

way from South Africa. There's no clear evidence that

divestment from South Africa made any economic difference in

South Africa. But there's a lot of evidence that it made a

political difference, that the slow drip of headline after

headline after headline in the news agencies all across the

world, forced negotiators to the table and led to political

change rather than economic. So well divestment make a big

economic impact on Israel, probably not. When you divest a

fund somebody is buying it. But will it make political change?

We have some evidence that it is. Just last week, both

President Biden and Prime Minister Netanyahu mentioned

American college protests in speeches that shows that

students have their attention,

People that argue that divestment actually does work.

It's generally a case of shifting hearts and minds and

trying to make something morally unacceptable from the point of

view of social norms. And what I would say here is that on the

question of Israel and Palestine, that is very, very

difficult just purely on the basis of how divisive this issue

is.

Universities are reluctant to divest on any issue, because it

might lower the returns on their endowment, which would affect

their ability to serve the needs of future students. If we

introduce greater risk or lower returns in the endowment,

there'll be less funds available to cover the tuition, to cover

tuition assistance, to cover the running costs of the university

for students who may not even be born yet. There's a trade off

between meeting the demands of the students today and our

ability to meet the demands of the students in the future,

which isn't being taken into account by the students who are

demanding divestment. I think divestment is a shortcut. It

feels like you're doing something it feels like you're

demanding an action -sell the shares. And we think somehow

that's going to make a difference, but what we're

really doing is transferring ownership to people who care

less than us, and thus, we should think twice about whether

it really serves our purposes or serves our goals.