Campus protesters are calling for divestment. What does that mean?

The cardboard sign carried strong words, written in the colors of the Palestinian flag: “USF has blood on its hands.”

Seen Tuesday during a protest at the University of South Florida in Tampa, it’s underlying message echoed the recent chants heard on college campuses across the nation.

Disclose. Divest. We will not stop. We will not rest.

Students and activists are calling on universities to cut financial ties with defense companies and weapons manufacturers they say are supporting Israel’s military response to the Oct. 7 Hamas attacks, resulting in more than 34,000 civilian deaths in Gaza.

The movement has picked up momentum in Florida, with actions that include a hunger strike at USF earlier this spring and campus protests that have resulted in more than three dozen arrests across the state.

Meanwhile, the USF Student Government passed a resolution urging the school to divest from five companies — Hewlett Packard, Boeing, Lockheed Martin, Northrop Grumman and Caterpillar. And the University of Florida faculty union joined efforts to pressure the school to both disclose its investments and divest of the ones that help Israel.

The concept is at the heart of the turmoil that has rocked campuses across the nation in recent days.

What is divestment?

At its most basic level, divesting is the act of getting rid of something.

Companies do it for strategic reasons, often to unburden themselves of an asset to improve the bottom line. Other organizations do it too, sometimes under pressure, to make a statement about an issue that goes beyond financial well-being.

The concept of divestment first took hold during the anti-apartheid movement in South Africa. In 1987, after two years of protests, USF’s foundation removed its investments from a number of companies that supported South Africa. It was one of more than 100 schools to do so at the time. Congress passed an anti-apartheid bill that banned new investments, and several cities — including St. Petersburg, Tampa and Gainesville — passed divestment resolutions or restricted new investments to South Africa.

More recently, universities in other parts of the country — including Columbia University, which has been at the forefront of protests this spring — have divested from fossil fuel companies.

The Boycott, Divest, Sanction movement to impose economic sanctions on Israel in support of Palestinians started in the early 2000s. At USF, the movement gained traction in 2013, when a divestment referendum was put on the Student Government ballot, before being removed. The following year, students led a divestment petition and garnered 10,000 signatures, but the university said it would not change its investment policy.

In 2016, USF’s Student Government passed a bill in favor of divestment from companies that support Israel, but it was vetoed by the student body president and vice president.

The issue resurfaced in March, when 18 USF students embarked on a hunger strike, again asking the board of trustees to reconsider its investments tied to Israel.

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Gov. Ron DeSantis, while standing against the recent calls to divest from Israel, has also used divestment as a strategy when it comes to other nations.

Last November, he signed a bill requiring Florida to divest from companies that support Iran. It directed the State Board of Administration to divest Iran-related holdings in the Florida Retirement System, and certain companies were prohibited from contracting with state agencies or local government entities.

He supported a similar bill, passed in March, to divest from Chinese-owned companies.

What are the protesters demanding?

Across the state, various groups are making different demands of Florida’s public universities.

While several companies have been identified, it’s unclear how much state money, if any, is going to them. Under Florida law, foundations that support public universities generally are not required to disclose the specifics of their investments, with some exceptions.

The protesters have targeted several companies, including Hewlett Packard, Boeing, Lockheed Martin, Northrop Grumman, Caterpillar, RTX (Raytheon), Kratos Defense and L3Harris. But some groups have gone further when they talk of divesting.

At USF and UF, protesters are also asking for student involvement in overseeing where future investments go. Some UF protesters are calling on the university to terminate all partnerships with weapons, arms and artificial intelligence contracts connected to Israel, and boycott speakers affiliated with the Israeli military.

At the University of North Florida, protesters want the school to end its partnerships with Haifa University in Israel. Florida State University protesters are asking that the campus Chabad and Hillel chapters end their participation in the Birthright Israel program, a free 10-day heritage trip to Israel for Jewish students.

What the schools say

While universities are not required to disclose their investments, their process makes it difficult to separate out individual funds.

At the University of Florida, the UF Investment Corp. manages the school’s investment portfolio.

“The University of Florida is not changing its investment strategy,” UF spokesperson Steve Orlando said in an email. He said the university had nothing to add.

At USF, the board of trustees told hunger strikers in March that the university contracts with fund managers and doesn’t directly invest in any company.

The university issued a statement saying the fund managers invest “in a variety of asset classes, which include companies in most major industries.” It said state laws forbid them from taking action based on social or political issues. Board chairperson Will Weatherford also said the university wouldn’t make changes that could negatively affect employee pensions.

Florida Statute 1010.04 says universities can’t “give preference to a vendor based on the vendor’s social, political, or ideological interests.” And House Bill 3, signed by DeSantis a year ago, says those responsible for investing state money can use only factors that “have a material effect on the risk or return” and may not consider “the furtherance of any social, political, or ideological interests.”

This past week, a USF spokesperson underlined those rules.

“We have made this position clear many times,” Althea Johnson said in an email. “USF’s investments are guided by its mission, fiduciary responsibilities and state and federal laws. USF does not select individual stocks or companies for investment.”

The universities’ investments come from their endowments, which do not include funds from student-paid tuition.

Some have poked holes in these arguments.

Mari Marks, policy manager for the Council on American-Islamic Relations Florida, said the group’s attorneys are looking into state laws regarding investment rules. She contends they refer to purchasing, not divestment.

“That’s also just excuses,” Marks added. “They absolutely have the power to find out where their investments are going. They can definitely find out how to divest. We are a country of excellent minds in financial matters. They can figure out how to do it. It’s been done.”

Does divestment work?

University of Colorado Denver professor Todd Ely said “there’s very little academic evidence” that divestment affects the market.

“The flip side,” he said, “is that calls for divestment become very visible and campus protests play an important symbolic role.”

Jonathan B. Berk, a finance professor at Stanford Graduate School of Business, said in a 2021 interview there is little evidence that divesting from fossil fuels has been an effective strategy.

According to Berk, roughly 86% of investors would have to divest from a company to have a 1% impact on its business operations — a hypothetical scenario he called “very unlikely.”

Jacob Ivey, a history professor at Florida Memorial University who researched anti-apartheid movements in Florida, said divesting is less about the monetary amount and more about raising consciousness about the roles individuals and companies play in conflict.

Chris Marsiano, a professor of public policy at Davidson University, said the recent protests had more impact than divestment would.

“The fact that Biden has spoken on the issue — (and) that (Israeli Prime Minister) Bibi Netanyahu has mentioned university protests — means that students have done enough to draw attention.”

How some schools are responding

While Florida universities have not made concessions, other schools have made some deals to end the protests.

The University of Minnesota pledged to disclose funds by May 7. It also pledged to drop charges against protesters and present a divestment resolution.

Brown University agreed to take a vote on divestment this fall.

Rutgers University did not agree to divest or end a partnership with an Israeli university, but met eight of the protesters’ other demands. Those included issuing a statement calling for a cease-fire, creating scholarships for displaced students and establishing a partnership with a university in the West Bank, according to protesters.

Northwestern University reestablished an advisory committee for “investment responsibility.” It also agreed to offer new visiting faculty positions and scholarships for Palestinian students at risk and create a space for Middle Eastern, North African and Muslim students.

Columbia University, at one point, offered to make investments in health and education in Gaza and publish a process for students to access their direct investment holdings. It is unclear where that offer stands.

Times staff writer Justin Garcia contributed to this report.

Divya Kumar covers higher education and Ian Hodgson is an education data reporter for the Tampa Bay Times, working in partnership with Open Campus.