Is the call to divest feasible? Here’s why there are hurdles to Penn protesters’ demands.

Protesters holding down an encampment at the University of Pennsylvania want the school to divest its financial holdings from any companies profiting from Israel’s war on Hamas.

It’s a demand by protesters at many of the nation’s other colleges, too, but so far no university has taken steps to completely divest, according to the Chronicle of Higher Education, though several this week struck agreements with protesters to set up committees to take a closer look. Some faculty councils and student governments also have approved resolutions calling for it, and Penn’s student body is currently voting on a proposal on whether the school should divest from financial holdings benefiting Israel.

At Penn, which has a $21 billion endowment, the hurdles could be high: The university doesn’t disclose its investments, it’s a private institution and is not required to, so it’s impossible to know its ties. (Protesters have also demanded that Penn disclose all its financial holdings.)

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In Pennsylvania, state lawmakers have threatened the university and others over their alleged failure to protect students from antisemitism, and one Bucks County Democrat said he’s going to reintroduce legislation that would prevent the state from sending funds to any school that divests from Israel.

And, current university policy, dating to 2013, requires that Penn consider divesting only if the organization is considered “a moral evil ... that is creating a substantial social injury.” There also must be “a broad and sustained consensus of the university community” on that sentiment.

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Penn’s campus, like others, is divided on its stance toward Israel and its military tactics.

“The only broad consensus is that these are really challenging times,” said Peter Eckel, senior fellow and director of the global higher education program at Penn’s Graduate School of Education.

Penn also says it has no interest in divesting from Israel.

“The University of Pennsylvania strongly opposes sanctions, boycotts, or disinvestment targeted against Israel,” a university spokesperson said. “We have been clear about this issue for more than a decade. Divestment focused on Israel is also against the law in the Commonwealth of Pennsylvania.”

The university referred to a 2016 law that prohibits the state from entering into contracts with any entity that boycotts or divests from Israel.

Penn’s veterinary school for more than a century received tens of millions of dollars from the state. Lawmakers last year held up that funding after GOP House leaders created a task force and sent a letter requiring that the school put out an “unequivocal public statement” that antisemitism and calls for the genocide of Jewish people violate the school’s code of conduct. Asked whether Penn ever got the money for 2023-24, a university spokesperson said: “Funding is still under discussion.”

Republican lawmakers in the state House have also held up funding for state-related universities for the last several years for a variety of reasons, including what research and medical care the University of Pittsburgh and Penn State provide.

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State Sen. Steve Santarsiero (D., Bucks) said he plans to reintroduce legislation he sponsored in 2015 to prohibit the state from giving funds to any Pennsylvania university that divests from Israel. He said he plans to update that legislation to include a state-level provision of the federal Title VI regulation that requires any higher education institution to protect students from discrimination based on race, color and national origin.

Santarsiero, who is Jewish, said he introduced the legislation originally before his children were going to college, to make sure that they and other Jewish students would not be intimidated.

“Students and professors who wanted to speak their mind about Israel were still free to do that, as much as I would disagree with them,” Santarsiero said of his original bill. “If the schools took the extraordinary step of divesting or boycotting Israel, there would be a consequence.”

About the same time, Pennsylvania passed the bipartisan law in 2016 to ward off the boycott, divestment and sanctions (BDS) movement against Israel from taking root in the state.

“It is in the interest of the United States and the commonwealth to stand with Israel and other countries by promoting trade and commercial activities and to discourage policies that disregard that interest,” says the law, which prohibits the state from contracting with any organization that is boycotting or divesting from Israel.

Several legislative leaders did not respond to requests for comment about whether they would consider Santarsiero’s bill or take their own action against any Pennsylvania school that divests from Israel.

Another lawmaker, State Sen. Doug Mastriano (R., Franklin) said in a news release Thursday that he introduced legislation to prohibit the state from funding any school that “authorizes, facilitates or otherwise supports any event promoting antisemitism on campus,” including the encampments.

Divestment means selling off or getting rid of investments in companies that advocates find objectionable or harmful. The idea is to cause financial harm to the firms perpetuating the targeted acts, but also to make a statement about the target of the divestment.

Penn’s board chair, Ramanan Raghavendran, did not respond to a request for comment on whether the board would consider the protesters’ divestment demands. The university in the past has said it does not support divestment against Israel.

Penn has faced calls to divest from other things in the past, including tobacco and fossil fuels. Under its policy, members of the Penn community can ask the university to divest based on “thoughtful, thoroughly considered, and sustained social responsibility concerns.”

The university’s decisions on investment are largely aimed at maximizing the university’s resources to support its teaching, research and clinical care.

“There is a strong presumption against the university making investment decisions based upon political, social, or ethical positions held by members of the community,” its guidelines state.

A proposal by some professors to divest from tobacco stocks died in 2014. Efforts to get the university to divest from fossil fuels met resistance at first, but in recent years, the university set the goal of reducing net greenhouse gas emissions from its endowment investments to zero by 2050.

The university also said it would refrain from making any new commitments in “private equity vehicles dedicated to investments in fossil fuel production.” It also said it would continue to refrain from making direct investments in companies involved in the production of fossil fuels.

Penn’s student government last week approved taking a vote by the student body on whether the university should divest from Israel. The vote began last week and concludes Friday, after which the results will be posted. It may become the clearest indication of where the student body stands.

The idea of urging universities to divest is far from a new concept. There were also calls to forgo investments in South Africa during the anti-apartheid movement. Some campuses, including Columbia University, took that step, according to the Chronicle.

Those seeking divestment from companies supporting Israel’s military often go after Lockheed Martin, Boeing, Raytheon and other companies that have supplied airplanes and missiles, according to the Chronicle. Rutgers University’s endowment has $7.7 million in investments with such companies, according to a March article in the Daily Targum, the student newspaper.

Some experts have argued that divestment would be more symbolic and would have little financial impact on companies tied to Israel.

“The impact of even a lot of universities selling would be negligible,” wrote James Mackintosh, senior markets columnist for the Wall Street Journal. “There are far more people with huge amounts of money who don’t care about links to Israel. ... Investors who sell to protest against Israel will find others willing to buy for purely financial reasons. And some deep-pocketed supporters of Israel may have money to spare that would once have been a university donation.”

Protesters would be better off urging the U.S. government to make military assistance to Israel contingent on a plan for peace, wrote Michael S. Roth, president of Wesleyan University, in the Forward, a more than century-old independent publication for a Jewish American audience.

“I so wish this was the object of student protest against the war in Gaza, rather than the fantasy of divestment,” he wrote. “Pressuring the American government to insist on a humanitarian cease fire coupled with a concerted effort to release the hostages would do far more to lead us from the narrow place that Gaza has become.”

Several colleges have struck agreements with their protesters in recent days that include establishing task forces or committees to look at questions about investments.

Northwestern University will form an advisory committee, made up of students, faculty and staff, that will serve as a liaison to the investment committee. The university said it would answer questions “to the best of its knowledge and to the extent legally possible” about its investments, according to the Chronicle.

Brown University, another Ivy League school, committed to forming a committee to develop a recommendation on divestment by September and vote on whether to divest financial holdings from Israel a month later, the Chronicle reported.