Divesting from Israel not a simple step for universities

RALEIGH, N.C. (WNCN) – Even as some protesters were physically removed by law enforcement on UNC-Chapel Hill’s campus, they continued to make their demands – divest from Israel.

“We will not back down, and we will not stop fighting until our demands are met. Our demands are for divestment of Israel,” one protester told CBS 17.

But specifically what investments? Their flier says, “divestment from companies complicit in this genocide.” So, what do they consider complicit? How much control do universities really have when it comes to what’s in a large investment fund that can include hundreds of companies in the U.S. and around the world?

“This isn’t an E-Trade account. They’re not day trading. They have comprehensive complicated strategies, and that’s why it’s very, very hard for students to achieve their goals of disclosure, even knowing what’s in those funds and then divestment taking away from those funds,” said Chris Marsicano, public policy expert and assistant professor of Educational Studies at Davidson College.

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“Think about Amazon, Google, Microsoft, Coca-Cola. These are all businesses that have a significant presence in Israel, some of which are connected to public organizations or government organizations, including the IDF. And so, you will have a hard time finding an endowment manager who says, ‘you know what, Google and Amazon, they’re a bad bet right now. We shouldn’t fund them’,” said Marsicano.

The nonprofit organization UNC Management Company manages the UNC-Chapel Hill and UNC System investment portfolios. On its website, it says it “manages the long-term assets of its investors through the UNC Investment Fund, a commingled investment vehicle with assets of over $10.6 billion. At the UNC Management Company our objective is to protect and enhance the value of the assets entrusted to us.” UNCMC nor UNC-Chapel Hill have responded to CBS 17’s request for comment.

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North Carolina State Treasurer Dale Folwell told CBS 17 that people should think of it in the same terms as their retirement investments.

“Whether it’s your 401K or the 401K of those that teach, protect and serve that we run at the Treasurer’s office, when you buy into an index fund neither you nor your station (CBS 17) or do we at the Treasurer’s office determine what’s in the index. So, you nor I, nor any of the participants in these have any quote ‘say so’ into the direct investments inside of these index funds. On occasion, as I’ve had an opportunity to meet with officials from the Government of Israel, it can regard to a bonds. Israel is a very conservatively managed country. They issue bonds for capital investment in their country, just like the United States of America,” said Folwell.

“And so it’s really hard for just Chapel Hill, as strong as the Tar Heels are, to force an ETF that’s traded by, you know, hundreds, if not thousands, if not millions of people across the country to divest from Israel. Endowment managers have a fiduciary responsibility. They can’t invest in it unless there is a clear short-term or long-term strategy to have revenue gains from that endowment. Even if there were products that didn’t have Israeli businesses in them that were available for purchase, you can’t guarantee that some of the companies that are in those products are not investing in Israel in some other way. It’s going to be a guarantee of a better return that endowment managers are focused on,” said Marsicano.

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