Being an educator and advocate of financial awareness, I was encouraged to read a recent article written by a student at George Washington University in Washington, D.C. on the negative repercussions that divestment could have on university endowments.
Published in the student newspaper, GW Hatchet, this article calls for a thorough look at divestment action and how it could impact the future of the university’s funding. Specifically, the author, Kendrick Baker, points out that GW cannot afford to ignore the potential consequences of divestment since the university is more dependent upon their endowment than other universities:
“At GW, 11.6 percent and 13 percent of endowment income goes toward student aid and professorships, respectively. Although these figures are not outliers compared to institutions like GW, they demonstrate that our endowment still represents a vital funding stream for the University. We cannot afford to miscalculate or ignore the financial costs of divestment, because our endowment has an impact on our financial aid and our professors’ jobs.”
Baker, who does not ignore the social causes that lead to divestment in the article, asks that a study be conducted on the pressure that divestment will place on the university’s endowment. He also asks that students thoroughly understand the cause that they are supporting and the resulting consequences before moving ahead with their strategy.
This article is a reassuring sign that students are starting to realize the implications that divestment has on the future of their schools, professors, and scholarships. It should also encourage city and pension board members to seriously think about the ramifications divestment action could also have on city officials and pension holders.
Divestment is not an action to be taken lightly. Everyone should read up on the issue and understand the effects of making financial decisions based on social wishes rather than facts. Hopefully this article will resonate with others as we move into the start of the new school year.