Divesting University Endowments — Max Schanzenbach (Northwestern University)

In this episode of the CLE Vlog & Podcast Series, Max Schanzenbach (Northwestern University) and Karol Rutkowski (ETH Zurich) discuss the paper "Divesting University Endowments", which examines the legal and financial principles governing university endowment divestment and evaluates both historical and current divestment efforts. Professors Schanzenbach and Sitkoff (Harvard University), the authors of the study, argue that nonfinancial divestment is legally permissible only when it aligns with a university's charitable mission of research and education and has a reasonable impact on the endowment portfolio — a standard that is difficult to meet under modern investment practices. They also find that, contrary to common belief, universities have rarely undertaken broad divestment campaigns, including during apartheid in South Africa. The authors demonstrate that a divestment for moral abhorrence could pass fiduciary muster as consistent with the public benefit principle of charity law if supported by a clear public policy established by confirmatory governmental actions.Paper Reference:Max Schanzenbach (Northwestern University)Robert H. Sitkoff (Harvard University)Divesting University Endowmentshttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=6332018Audio Credits for Trailer:AllttA by AllttA https://youtu.be/ZawLOcbQZ2w