When Should A College Divest?

Forty-seven years ago, the College decided that some investments were not worth holding.

In December 1979, the Board of Trustees voted to divest from companies tied to apartheid South Africa when those companies violated human rights. The decision did not end the issue. By 1985, students were still pushing the College to go farther, calling for full divestment from the $7.5 million Colby held in corporations with assets in South Africa. Later that year, the board voted unanimously to fully divest from companies with direct investments there by May 1987.

That history is relevant once again as divestment has returned to campus politics.

In April 2024, Colby Action for Palestine called on the College to divest from companies financially tied to the Israeli government and cut certain institutional ties. The Administration responded by calling for dialogue. The disagreement was not about Israel and Gaza alone. It was also about a question Colby had faced before. When should the College decide that it no longer wants its money tied to a particular company or government?

Apartheid South Africa and the Israel-Gaza conflict are not the same situation. Treating them as interchangeable would be careless. Also, consulting a precedent does not mean that every movement for divestment deserves the same answer. It does, however, show that the College has already accepted the basic idea that investments can carry both ethical and financial responsibilities.

That did not end with South Africa. Colby’s 2023–24 endowment report says the Board of Trustees has maintained investment restrictions related to direct investments in companies doing business in Sudan since 2006. The College keeps a no-purchase list for direct holdings.

So the real question is not whether politics or ethics should ever enter Colby’s investment decisions. They already have.

The harder question is what standard should apply.

Critics of divestment can argue that an endowment exists to support the College, not to make foreign policy. I understand that concern. Students also should not expect the College to sell an investment every time a group objects to a company or government. If that became the rule, long-term investing would be difficult.

Divestment also looks different now than it did in the 1980s. Colby’s endowment was worth about $1.16 billion at the end of fiscal year 2024, and much of it was invested through funds managed by outside firms that pool money from many investors. In many cases, the College does not directly pick every company in those funds.

I would argue that difficulty is not the same as impossibility. Demands for divestment should have to answer serious questions. How directly is Colby’s money connected to the harm being protested? Is there strong evidence for the claim? Can the College realistically remove the investment? Would the same rule be used if the political issue were different?

Students should also know who answers those questions. An endowment is not some abstract money sitting somewhere outside the College. It helps fund financial aid, academic programs, and other parts of Colby life. The people managing it have a responsibility to protect it. But when the College decides that an investment crosses an ethical line, students should be able to understand why.

The stakes have become even higher. In September, the U.S. House of Representatives passed a bill that would threaten certain federal funds for colleges participating in some commercial boycotts of Israel. The bill was later sent to the Senate Committee on Health, Education, Labor, and Pensions. Divestment is no longer only an argument between student protesters and college trustees. The federal government is entering the debate too.

The College does not need to treat every political cause the same. But I do think it needs a standard it can explain.

If the College could decide that some investments connected to apartheid South Africa were unacceptable, and if it still places restrictions on certain investments tied to Sudan, then students are fair to ask where that line sits today. We may disagree about where Colby should draw it, but I do not think the line should be invisible.

 

 

~ Stephen Owusu Badu `27