Pro-Palestinian protesters in Texas demand divestment from universities. Here's what that means

When Jumana Fakhreddine attended the anti-war protests at the University of Texas at Austin last week, she said organizers organized a peaceful teach-in with speakers and pizza. Their purpose was to pressure the university's leadership to divest from companies linked to Israel's war effort in Gaza, she said.

But the moment instead devolved into chaos as dozens of students were arrested by state and local police officers dressed in riot gear, who used force to quell the demonstration and prevent students from venting their frustrations.

“The only reason we were there was simply to demand divestment and to stop supporting the ethnic cleansing and genocide of Palestinians,” said Fakhreddine, a 21-year-old biology and medical student. “I think we all just want the occupation to end.”

The ongoing protests at UT Austin are a response to Israeli-led efforts against Hamas following the Oct. 7 attack that killed more than 1,200 Israelis and held dozens captive. Since then, more than 34,000 Palestinians have been killed in the war between Israel and Hamas, according to Gaza's Health Ministry.

What is divestment?

These protests are not limited to the UT Austin campus. Similar demonstrations occurred on other public and private campuses across the state and country. While reports and photos of a brutal police response to the protests have dominated headlines, some students say the message about divestment hasn't resonated as much as it should.

What exactly is divestment and why are protesters calling for it? It all starts with university endowments – essentially donated money and assets that are invested to generate income.

Investopedia editor-in-chief Caleb Silver told the Texas Newsroom that the UT System has one of the largest endowments in the world. In fiscal year 2023, it was worth about $44.9 billion.

Silver said “divestment” is a broad term, but in light of the protesters’ demands, it includes three key elements.

“What you're seeing in these protests is that students … are calling on the university and its foundations to stop investing in companies that either do business directly with Israel or with companies in Israel, or that invest in companies that are based in Israel have.” he said. “So it is a comprehensive request for the UT [System] Foundation or some of these campuses.”

Last Wednesday's protest at UT Austin was organized by the Palestine Solidarity Committee in Austin, a student organization, and specifically called for “a ceasefire in Gaza and UT involvement with weapons manufacturers that supply Israel,” KUT reported.

Some students have also said they do not want their tuition fees to go to funding what they call a genocide against Palestinians. That's not too far-fetched, as Silver noted some University endowments are partially funded by student fees.

“Endowments are generally established from students’ tuition fees. They also consist of gifts from former students and alumni who are influential figures associated with the university,” he said. “You often see wealthy donors giving millions – if not billions – of dollars to a university’s endowment.”

Pro-Palestinian students at UT Dallas continued their call on Friday, April 26, 2024, calling on the school to divest from companies that supply weapons to Israel as the Gaza war approaches its seventh month. Some representatives met briefly with UTD President Richard Benson to make their demands.

Calls for divestment are not a new strategy. In fact, they date back at least to the 1960s, when colleges and universities were gripped by protests demanding an end to the war in Vietnam. Calls for divestment followed in protest against South African apartheid and later the fossil fuel industry in Texas.

Aside from this story, predicting the actual impact of the divestiture is somewhat complicated.

Chris Marsicano, an assistant professor of education and public policy at Davidson College in North Carolina, told NPR that the anti-fossil fuel movement hasn't made a significant difference. And it is unclear whether the current campaign will produce results that the protest movement deems meaningful.

“When universities divest from fossil fuels, it doesn’t have much of an impact on the stock prices of those fossil fuel companies, nor does it appear to have an impact on university endowments,” he said. “There are also some parallels to South Africa in the 80s. But even then, research shows that most divestment efforts resulted primarily in a global political movement. And I don’t know whether we have reached our goal yet with disinvestment from Israel due to the Gaza conflict.”

Calls for divestment aren't just limited to the UT Austin campus. Students at the University of Texas at Dallas staged sit-ins last week and ultimately met with university President Richard Benson, KERA reported.

“Our demand is disinvestment. Our demand is that our university ends its complicity in the genocide,” said Fatima Tulkarem, a member of Students for Justice in Palestine at UTD.

However, protesters did not move forward with their demands and said the meeting did not lead to meaningful discussions.

The downside of disinvestment

Nationwide, at least one student protest movement has made some progress. Brown University in Rhode Island announced Tuesday that an agreement had been reached under which protesters would disperse their camp and a university advisory committee would meet to discuss students' divestment demands.

“The university agreed to invite five students to a meeting with five members of the Corporation of Brown University in May to present their case for withdrawing Brown's endowments from 'companies that enable and profit from the Gaza genocide'” the school said in a statement statement. Brown President Christina H. Paxson will also “request the University Resource Management Advisory Committee to make a recommendation on the divestiture question by September 30, which will be presented to the corporation for a vote at its October 2024 meeting.”

But Investopedia's Caleb Silver said there's a downside to divestment: When universities ultimately agree to divest from a particular company or organization — whether in Texas or elsewhere — they give up any say in how they proceed .

“You are losing your voice in what this company can do in the future. And if you’re a major shareholder — as is the case with many of these big university foundations — you have a pretty big impact on how these companies operate,” Silver said.

“Well, you withdrew your money, you walked away, you let your money run. But you have lost your ability to influence strategy and create change within the company.”

Anna Harden

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