Campus protests have called for schools to divest from Israel. Here’s how that would actually work

Student protests against the ongoing Israel-Hamas conflict have brought battalions of police in riot gear to college campuses, enraged some billionaire donors, and led to canceled graduation ceremonies.

One constant refrain at these protests is the call for college endowment funds to divest from Israel and the many American companies that do business there. Tech companies such as Google and Amazon and defense contractors such as Boeing and Lockheed are on that list.

“These endowments are famously opaque,” said Alison Taylor, clinical associate professor at New York University’s Stern School of Business. “So there is 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.”

Putting divestment into practice, though, is a tall order. Some universities, such as the University of California, Berkeley, agreed to review their investments. However, many universities have ignored the calls to divest from Israel or companies that do business there.

“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,” said Witold Henisz, professor of management at The Wharton School, University of Pennsylvania. “If we introduce greater risk or lower returns in the endowment, there’ll be less funds available to cover … tuition assistance, to cover the running costs of the university for students who may not even be born yet.”

Watch the video above to learn more about how divesting from Israel and companies who do business there would actually work, and how it would affect the tens of billions of dollars at stake in college endowment funds.