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Do not divest: a defense of the endowment

I was struck when I read the full list of demands presented by the Carleton College chapter of Students for Justice in Palestine (SJP) to the Board of Trustees on May 9, 2024 and later published and promoted by SJP. Several of SJP’s requests are fundamental hallmarks of Carleton, such as the protection of freedom of speech and peaceful demonstrations. Other demands, like expanding educational opportunities and supporting Palestinian students, are vital to our community. However, one particular element of the list of demands jumps out: 

“Carleton must release a statement that…. affirm[s] that the educational mission and moral imperative of the college is more important than the growth of the endowment.”

In my view, the educational mission of this college is to provide for its students; and the current divestment proposal jeopardizes the financial integrity of the college. I urge extreme caution when considering divestment proposals and I support the Board of Trustees’ current level of investment. This discussion focuses solely on the implications of divestment and the management of the endowment, and is not a commentary on the broader geopolitical issues or the plight of the Palestinian people.  

Faced with rising costs and high inflation, the growth of the endowment is essential to continuing the success of the college. A robust endowment is not a giant check to top administrators — it is reinvested in the community. I firmly believe that maintenance and growth of the endowment is essential to the functioning of this institution.

That is not to say that the endowment should supersede all else — indeed, directly funding organizations that perpetuate atrocities should be a nonstarter. This is why I agree with the Carleton Responsible Investment Committee’s (CRIC) report that, as President Byerly wrote in Carleton Today, “the college does not have any private partnership co-investments with Israeli companies, and it would not be possible for them to do the further analysis requested [by SJP and CSA].” CRIC further stated that there is “unambiguously no” endowment involvement in Israel’s war in Gaza.

I have heard many students decry CRIC as being nothing more than a lapdog for the administration. However, CRIC has long been on the side of student opinion. In 2015, they published a report on fossil fuel divestment, encouraging the Board of Trustees to divest, which was rejected, before being successfully implemented in 2022. Notably, one of the co-chairs of the committee is a student and students make up more than half the voting members of the committee. With a history of progressive divestment proposals and robust student engagement, CRIC’s job is to evaluate these concerns and make an assessment based on careful analysis, weighing the voice of students with the long-term needs of the college.

While Carleton was able to divest from fossil fuels, which are neatly grouped in the energy sector, investments that are “related to the Military Industrial Complex [sic]” highlighted in SJP’s demands are vague and not well defined, apart from providing three example organizations. One of these targets is General Electric, which is known for a wide variety of manufacturing. While it does have a defense and aerospace department, General Electric is also instrumental in expanding green energy and revolutionizing healthcare technology. Carleton must seriously consider the implications of divesting from these large conglomerates — a reactionary divestment decision could undermine our other values (e.g., green energy and healthcare) and our institutional goals (long-term financial viability).

Indeed, in an ideal world, our investments would only flow towards organizations that uphold the highest ethical standards without compromise. However, the reality of our global economy means that such organizations are rare or nonexistent. It is also important to recognize that divestment is not an instantaneous process. It involves a careful unraveling of existing investments and the identification of new opportunities. Yet, even with the best intentions, the alternatives available may still present similar moral dilemmas, and there is no guarantee they will yield equivalent financial returns. 

As I review the debate at Carleton concerning the demands for divestment, it becomes evident that the current proposals presented by the Students for Justice in Palestine lack practical feasibility and risk undermining the financial foundation of our institution. Growth of the endowment is critical to Carleton’s educational mission! It enables Carleton to maintain its commitment to offering comprehensive financial aid, supports faculty and staff and improves facilities — all of which are essential to sustaining our educational excellence. The notion that the college should divest from major conglomerates merely for their involvement in defense contracting overlooks the multifaceted roles these investments play in a balanced portfolio, not to mention their other positive impacts on society. The proposed reactionary divestment proposal could jeopardize the stability and future growth of the endowment, thereby impacting every aspect of campus life. As we move forward, it is critical that we engage in thorough, pragmatic evaluations of all investment decisions to safeguard the enduring success and mission of our college.

To our administration and trustees: Our educational mission demands a robust endowment. Secure Carleton’s future by prioritizing financial stability and growth. That is our imperative.

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