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University Endowments Could Lose Billions if They Boycott Israel, Report Warns
Edited by: TJVNews.com
A recent report from JLens, a financial advocacy group that has been part of the Anti-Defamation League (ADL) since 2022, highlights the significant financial risks for U.S. universities if they decide to divest from companies that do business with Israel. According to the report, the top 100 American universities could collectively lose an estimated $33.2 billion over the next decade if they adhere to the demands of the Boycott, Divestment, and Sanctions (BDS) movement against the Jewish state. As The Jewish News Syndicate (JNS.org) reports, this unprecedented analysis provides a stark warning to university administrators about the long-term consequences of such actions.
Colleges & universities will lose tens of billions collectively fm their endowments if they capitulate to demands to divest fm Israel & companies that do business with it: new report released Thursday by JLens, Jewish investor network, part of the Anti-Defamation League. pic.twitter.com/vg4uR5aqcB
— Rita Rosenfeld (@rheytah) September 23, 2024
The report, described as the “first of its kind” by JNS.org, was compiled by the ADL and uses historical performance data to compare two hypothetical large-cap U.S. equity portfolios. One of these portfolios is broadly diversified and free of restrictions, while the other excludes companies that are targeted by BDS campaigns. The analysis revealed a notable gap between the two portfolios’ returns, with the portfolio boycotting Israel-linked companies trailing behind with an 11.1% return, compared to 12.9% for the unrestricted portfolio. This 1.8 percentage point difference could have significant implications for the financial health of university endowments, as highlighted by JNS.org.
Boycotting Israel Could Cost Top 100 US Universities $33.2B
(JNS) – The endowments at the top 100 American universities could lose a total of $33.2 billion over the next decade if the schools boycott the Jewish state, according to a report from JLens, which has been part of the… pic.twitter.com/tF4ecE4VnJ— The Jewish Voice (@TJVNEWS) September 23, 2024
Among the companies excluded from the BDS-affected portfolio are major global players such as Alphabet (Google’s parent company), Amazon, Caterpillar, Lockheed Martin, and Microsoft. These corporations have substantial business interests in Israel and have been frequently targeted by BDS activists. JNS.org notes that the exclusion of these highly profitable companies results in a significant performance disadvantage for any portfolio adhering to BDS guidelines, potentially leading to billions in lost returns over the long term.
Some of the most prominent American universities with large endowments stand to suffer the greatest losses. According to the report, Harvard, Yale, Stanford, and Princeton are projected to collectively lose over $8 billion in returns on their endowments over the next decade if they divest from Israel-related companies. JNS.org highlights that the potential financial fallout could undermine the resources these universities use to fund scholarships, faculty positions, research initiatives, and capital improvements.
Today we released a report quantifying how much universities could lose over 10 years if they acquiesced to BDS demands to divest from Israel.
We found that the 100 largest US university endowments could collectively forgo $33.2 billion in returns.https://t.co/mW1y53w7ym pic.twitter.com/BNLdercRwq
— JLens (@jlensnetwork) September 19, 2024
One particular institution facing immediate pressure is Brown University, which is actively considering calls to divest from companies doing business with Israel. According to JNS.org, Brown’s $6 billion endowment could lose an estimated $309,787,060 in potential returns if it proceeds with BDS demands. These staggering losses underscore the complex financial choices that university investment committees must navigate as they balance ethical considerations with fiduciary responsibilities.
Jonathan Greenblatt, CEO and national director of the ADL, warned that the implications of divestment from Israel go beyond financial concerns. As JNS.org reports, Greenblatt stated, “Calls for universities to divest from companies doing business in Israel are not only morally dangerous, but may also be financially dangerous.” He emphasized that university investment committees have a duty to “prudently steward institutional resources,” a responsibility that would be compromised by adopting BDS-aligned investment strategies.
The report from JLens, according to JNS.org, serves as a reminder that the economic repercussions of boycotting Israel could be far-reaching. While the BDS movement continues to gain traction on some college campuses, the financial risks associated with its demands are becoming increasingly clear. By excluding high-performing companies from their investment portfolios, universities not only undermine their own financial stability but also risk compromising their educational missions. Endowments play a critical role in funding academic programs, research, and student support services, and any significant reduction in returns could force institutions to make difficult budgetary decisions.
The JNS.org report underscored that the BDS movement has long been a point of contention within academic circles, with activists calling for divestment as a way to pressure Israel over its policies toward the Palestinians. However, critics of the movement argue that such actions are counterproductive, damaging not only to Israeli businesses but also to the financial interests of the very institutions that adopt them. As the JLens report makes clear, the decision to boycott Israel could carry significant financial consequences that may not be immediately apparent to university leaders.
In conclusion, the ADL’s report, as detailed by JNS.org, paints a sobering picture for universities considering alignment with the BDS movement. The projected $33.2 billion loss across the top 100 universities over the next decade is a stark warning of the financial risks involved. With prestigious institutions like Harvard, Yale, and Stanford potentially losing billions in returns, university investment committees must carefully weigh the ethical and financial ramifications of their decisions. As Greenblatt pointed out, the choice to divest from companies doing business with Israel is not only a moral issue but a financial one, with far-reaching consequences for the future of American higher education.
