Danger in Divestment

Colleges and universities face renewed danger in the coming academic year. There is no doubt that the demonstrators will be back, louder and more determined. They will be better organized, well-funded, and will certainly have legal counsel and media by their side. More campuses will likely be affected. Sadly, the protesters will again show little respect for the time and generosity that the trustees devote to their institutions, or the wisdom and insight that they bring to higher education governance. Although this time their demands focus on Israel, if a precedent of capitulation to divestment pressure succeeds now, schools can be assured that they will be subject to similar tactics for other sociopolitical causes.

This brief guide will explain why an educational institution should adopt a position of strict institutional neutrality, as an increasing number of schools have done, following the wisdom of the University of Chicago in its Kalven Report. Institutional neutrality empowers colleges and universities to pursue their true mission of teaching and research, rather than serving as a largely ineffective and marginal political platform. Such a policy protects and fosters the freedom of expression and freedom of thought that are the lifeblood of liberal education. And it allows the institution to invest its funds subject only to the financial professionals whose duty it is to look after the strength of its portfolio. As fiduciaries of the institution, moreover, trustees who make decisions about the portfolio on grounds other than best financial practice could even be held personally liable for breach of fiduciary responsibility.