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The events taking place at American universities, from protests against the war on Gaza and criticism of Israel and the Biden administration, are the talk of the world, especially after the violent police intervention to disperse them, who funds these institutions And what is the story of the charitable "endowments" And who runs it
The questions about the "endowments" or funding for these world-famous universities, such as Harvard, Yale, Columbia, and others, come against the background of the demands that the protesters are seeking to achieve, including "stop investments with the Israeli occupation," so which investments are universities managing in the first place?"
These and many other questions shed light on the financing of these American universities, which mainly comes from charitable "endowments", that is, donations from wealthy people aimed at supporting these educational institutions, and this report monitors the story of these "endowments", who controls them, their size and other details.
"Endowments" of American universities
American universities and the most famous educational institutions in the West generally rely on" endowments "for educational purposes, donated by individuals, and those endowments turn into something like" investment funds", and from the returns of those investments, educational activities and everything related to them are financed. University buildings, laboratories and all facilities are constructed and salaries and wages of employees, including professors, researchers, administrators, security personnel, etc.are paid mainly from those revenues.
In general, the idea of an "educational endowment" is not alien to Muslims, but the West has expanded it and paid special attention to it, so these "endowments" have become the cornerstone of the largest and most famous educational institutions there.
The university endowments represent any funds or financial assets donated to colleges with the aim of investing them and achieving meaningful returns that are used to support the operational budget of the University and to help it invest in its future, including the provision of scholarships and financial assistance to students and to finance research and other initiatives. The federal and state governments of America treat those universities as non-profit organizations, that is, they are exempt from taxes.
Harvard University, for example, tops the ranking of universities around the world in most, if not all rankings. This university was founded in 1636 by John Harvard, a wealthy British who wanted to match the Universities of Cambridge and Oxford in his country. And after almost 4 centuries, the value of Harvard university endowments has become more than 50 billion, according to a report by the National Association of colleges and universities of America.
The National Association of colleges and universities includes more than 700 universities and educational institutions, most of which occupy advanced positions in the ranking of World Universities, and in general American universities occupy the first places in this ranking periodically, compared even with their European counterpart.
How are these huge funds managed
Endowments of this size are difficult or practically impossible even to be managed directly by university departments, as these departments are mainly educational and do not have investment management experience.
We are talking about investments worth more than tens of billions. Columbia University in New York, for example, has endowments worth almost 14 billion dollars, reports 2023. Thus, these educational institutions, or the majority of them, resort to external investment managers, such as investment banks, long-term investment funds or companies specializing in the field of investment vessels that are not available to retail investors, according to Todd Eli, assistant professor at the school of Public Affairs at the University of Colorado Denver.
"Universities and colleges have limited knowledge of the actual investments towards which their investment funds are directed because those universities hire outside experts to make those decisions . And sometimes those decisions are confidential, " Eli was quoted by The Associated Press, which means that investors are legally obliged after publicly disclosing the contents of their investment portfolio.
The endowment of Harvard University, the largest of all, includes 12 thousand investment funds, almost a third of which is managed by a university subsidiary, the Harvard Business Management Company, while the remaining percentage is managed by specialized companies.
Is it possible to change the investments of these "endowments"
Talk about these educational endowments came from the massive protests witnessed by American universities condemning the Israeli war on Gaza, one of the most prominent demands of the protesters is to" stop investments " with the Israeli occupation completely.
But it seems that achieving this is not as easy as some expect, as George Dyer, CEO and co-founder of the network of endowments with specific goals, told The Associated Press: "it's not as easy as some think, and it may be a sale of some shares in a particular company. But even so, I think anything is out of the question in the financial services industry today,"he said.
The network run by Dyer works to help connect organizations with endowments to learn from each other how to achieve the interconnection of Endowments and their goals and make investments sustainable and responsible, as in the context of climate change, for example. The network also advises that transparency should be one of the principles of sustainable investment that serves the purpose of the endowment.
The demands to stop investing in fossil fuel companies, which have been launched since 2011, have a moral aspect, but they also carry a material aspect, according to Dyer, adding that this material aspect contributes to obtaining the support of the administrators of the endowment and the boards of directors that manage University investments directly.
Commenting on the calls to stop investments based on geopolitical issues, Dyer says that "the link between the university, investment and the issue of financial performance may not always be very clear".
Eli believes that the demands of the protesters at American universities also raise questions about the priorities and responsibilities of those universities: "is the university administration trying to maximize revenues or support a societal or political agenda?" For those who manage these endowments on a daily basis, their focus is on risks and returns until they are directed towards another path by the governing authority of the endowment or endowments at the college or university,"he said.
Have universities made any changes
Despite the pressure exerted by protesters at American universities to stop investments with Israel, from Columbia University to the University of California and others, Dyer said that he had not "heard a lot from the administrations of those institutions about stopping investments with Israel "so far".
Politicians and businessmen in the United States claim that one of the reasons for the reluctance of university endowment administrations to take the step of disengaging investment with Israel is the "split" on campus between those who condemn the war on Gaza and those who support Israel.
In this context, the Joe Biden administration justifies these protests in support of stopping the war on Gaza and denouncing Israel by calling them "anti-Semitism" and institutions and members of Congress raise these accusations against the participants in the protests, and this is the general trend in the American Media.
The speaker of the House of Representatives, Republican Mike Johnson, along with senators Josh Hawley and Tom Cotton, visited the Columbia University campus on Wednesday, declaring their support for Jewish students and calling on the Biden administration to deploy the National Guard at the university to prevent those they called promoters of "hate speech and anti-Semites" from "spreading terrorist ideas in educational institutions," according to a report by the American magazine Politico.
This position, which confuses the condemnation of the atrocities committed by the Israeli occupation army against civilians in Gaza since the seventh of October with "anti-Semitism", is what most American politicians, especially Republicans, adopt in a fierce election year, in an effort to satisfy the influential Jewish lobby, according to many observers.
What is the position of universities on climate change
But the university endowment administrations in the United States can do a lot about the protesters ' demands to apparently stop investing with Israel. Jenny Stevens, a professor at Northeastern University, has prepared a book under publication about the climate justice movement on universities, whose demands include stopping investments in fossil fuels. Stevens told The Associated Press that the initial reaction from universities when demands rose to stop investing in fossil fuel companies was also to say that their investments are intertwined with other investors and are managed by a third party or they do not know where the University's endowment funds are invested. But in the end, universities that made a commitment to stop investing in fossil fuels were able to come up with ways to implement that commitment.
"These great educational institutions with huge endowments have a great deal of power and they accumulate wealth and power through the management of those endowments and their proceeds and they have control over how to manage those funds," Stevens said.
Are universities listening to the demands of the protesters
No, but campaigns to stop university investment have succeeded by using different tactics before. The squares and buildings of Columbia University have been at the forefront of the struggle against apartheid in South Africa, as they are now doing with the protests denouncing the Israeli war on Gaza.
On April 5, 1985, 7 students members of the "Coalition for a free South Africa" blocked the entrance to the administrative building of the University "Hamilton Hall Hamilton Hall", chained themselves with shackles and chains at the entrance to the building and on the stairs leading to it.
This step was not the first scene in the protests against the apartheid regime in South Africa, the Columbia campus squares have witnessed demonstrations over weeks, months, and even previous years, in which thousands of students have already participated. But this step (in April), which seems to be related to the student escalation since the Vietnam War and even the war on Gaza, was on the path of escalation to fulfill the basic requirement that Columbia University cut off any cooperation or investments with racist Pretoria.
This escalation continued and increased in size for about 3 weeks, until the victory of the movement and the students came on April 25, 1985, when the administration of Columbia University finally decided to listen to the demands of its students and decided to completely stop dealing with the apartheid system in South Africa, both academically and at other levels.
The" Coalition for a free South Africa "was founded in 1982, and succeeded in convincing the" Columbia University student senate " of the Justice of the demands so that the council would vote in favor of those demands and actively participate in demonstrations aimed at putting pressure on the university administration, so that the goals were eventually achieved.
Student protests condemning the Israeli war on the Gaza Strip have recently expanded to include dozens of universities and educational institutions in various states. For days now, students have been protesting at several American universities to demand"a permanent ceasefire in Gaza, an end to US military assistance to Israel and the withdrawal of university investments from companies profiting from the Israeli invasion".
U.S. security forces have invaded several universities, killed hundreds of students, researchers and faculty members, and arrested dozens of them. But that abuse inflamed the situation and the protests expanded on a daily basis to cover a larger number of American universities
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