University of Minnesota regents decline to divest from Israel in response to war with Hamas

University of Minnesota regents on Tuesday declined pro-Palestinian activists’ calls to divest from companies with ties to Israel, adopting a policy that says they want endowment investments to be based primarily on financial concerns rather than social and political ones.

Board Chair Janie Mayeron said regents wanted to “let students and other members of our community know what our decision is with respect to our endowment before we start the fall semester together.”

Classes on the Twin Cities campus begin next week, and many students are now starting to move into dormitories or nearby apartments.

Leaders at colleges across the country spent the summer weighing how they would respond to calls from pro-Palestinian activists demanding that universities divest from companies that have ties to Israel or U.S.-based defense contractors. Some Jewish student leaders have urged colleges to resist those calls and instead invest in both Israelis and Palestinians.

While U leaders had previously agreed to disclose some details of their endowment holdings, Tuesday’s vote offered the first indications as to what they would actually do with those investments. A small group of pro-Palestinian activists sat in the board room, holding signs saying “there’s no neutrality in genocide.” After the vote, some of them shouted, “Shame. Shame. Shame.”

The U has two endowments. Newer donations are placed in a $3.6 billion endowment overseen by the University of Minnesota Foundation, a nonprofit that coordinates fundraising efforts for the U and says its business information is private. Older donations are held in a $2.27 billion endowment overseen by the U, and about $5 million of that is in stocks and bonds tied to companies based in Israel or U.S.-based defense contractors.

Returns on investments in that older endowment provide about $90 million for the U each year, money that goes to a variety of causes, including scholarships or funding certain positions.

In a meeting earlier this summer, the U’s chief investment officer, Andrew Parks, told regents his office spends every day trying to weigh the financial risks of various investments. But when it’s time to make decisions based on social issues — such as whether to blacklist companies based in a specific country — “that’s where I would look to the board and to the president for policy guidance,” Parks said.

Many of the U’s endowment investments are held indirectly in funds that are run by managers, Parks said, and can’t always be separated. Those decisions could affect the return on investments and could also change the types of fees that the U is required to pay.

The new policy approved Tuesday says the U will adopt “a position of neutrality with respect to the Endowment.” It says the board is declining requests to divest from companies tied to Israel, noting that regents have heard a “wide range of deeply held viewpoints regarding requests for divestment.” But it leaves in place past decisions to divest from fossil fuels and Sudan.

Regent Robyn Gulley, the only board member to vote against the policy, said, “I still really feel challenged by using the word neutrality in this way because to be neutral is to not do any of these other things, so it kind of makes my brain spin.”

Regents Ruth Johnson, Mary Turner and Bo Thao-Urabe were absent for the vote.

Fae Hodges, a member of Students for a Democratic Society, one of the groups that called for divestment, said members of their coalition were disappointed by the outcome but not surprised by it.

“Even if the money is coming from donors, it’s intended to fulfill our mission and build our university up, and using that money to fund war crimes and human rights violations is not in alignment with what the student body wants, the values the board claims to uphold, or what is right,” Hodges said.

Meanwhile, Ethan Roberts, deputy executive director of the Jewish Community Relations Council, which has been working with some Jewish student organizations on campus, thanked U leaders for their decision and for attempting to clarify the rules for protests this fall.

“They clearly were under a lot of pressure to divest,” Roberts said.