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What to know about university endowments and divestments

Students gather outside a college campus. They have tents set up on a lawn, and they use chalk to decorate a sidewalk. Palestinian flags and posters populate the lawn.
Emily Files
The group of protesters pass time at the encampment by decorating the sidewalk with chalk, playing volleyball, and sharing meals.

Late last week, pro-Palestinian encampments came down across UW campuses after demonstrators reached an agreement with university leadership. A lot of the student protests centered around divesting from Israel, and fuller transparency around University investments. And while the encampments are down, those conversations are just beginning.

Liam Beran is a Madison-based reporter who wrote about the protests and endowments to learn what the demonstrators are asking for.

This interview has been edited for length and clarity.

Jimmy Gutierrez: What are pro-Palestinian protesters on campus asking for?

Liam Beran: They have outlined six demands. First off, are divestment from companies that are aiding Israel and the war efforts during the Israel-hamas war. Disclosure of our university foundation's investments, so that's the UW Foundation, who doesn't have to publicly disclose individual investment details. They've also asked to cut ties with Israeli institutions, so those are research programs, study abroad programs, there's a graduate exchange fellowship, which has been named. They've asked our university to call for an immediate and permanent ceasefire. They've asked the university to get cops off campus, and they've asked the university to stop land grabs and cease expansion.

Gutierrez: What exactly are they getting specific about that's in the portfolio that students have issues with?

Beran: This is a really good question because it's pretty complicated. Partially, what the protesters are looking at is the UW Foundation and that's the nonprofit, private corporation that manages UW Madison's nearly $4 billion investment endowment, which the university can draw upon in order to receive funds.

Endowments are largely sourced from donors, and can range from multi-million to multi-billion dollar investments. So one of the parts with the UW Foundation is that because they aren't required to disclose their investments it's not really a [clear] idea of what's going on.

Protest organizers I spoke to said without being able to know what specific individual investments are being made we don't know where all of it's going. I spoke to a foundation spokesperson who said they outline their overall endowment details in a financial report, but don't disclose individual investment details.

Gutierrez: What do we know, or should we know, about the UW Foundation, which you've kind of referencing as far as who's controlling the money?

Beran: The UW Foundation has a governing board composed of UW Madison alums and donors. It's important to keep in mind that this is a donor focused organization, so they have fundraisers throughout the year in order to raise money and that governing board would be the one controlling the UW Foundation.

Those would be the people that protesters would be eventually connected to. The chancellor of the university administration does not have any sort of control over how that endowment is spent or what it's invested in. And that's a sticking point.

Gutierrez: The term endowments, and how they work, still feels a bit fuzzy to me. I understand that it's like a piggybank that universities have and can use and spend at their discretion, but I would love if you could break down what they are and why they're important here. And it seems specifically to UW-Madison, too.

Beran: Endowments are largely donor sourced assets or funds that accrue annual interest. So they're a nice way for the university to have a stable source of financial income, even given whatever other expenditures or circumstances happened in a given year.

Madison's philanthropic profile makes it an outlier in terms of funding for UW system schools. We've seen over the past year that a lot of the other UW system schools are facing furloughs, layoffs and budget cuts in response to deficits. Madison actually was able to tank some of those budget cuts, $7 million of them, because of its strong philanthropic profile: 33% of the university's revenue in 2023, compared to about 4.9% for other UW system campuses.

Gutierrez: You touched on the cuts in state funding, which has been front page for a while now with the UW system, and I would love for you to touch on what role the state funding, or lack of, play in a process like this.

Beran: State funding is certainly a concern. I haven't heard anything in terms of how the legislature is receiving all this news, but I suppose it would be on their minds as well. But in terms of this particular aspect, it's not super clear at this point how actively the universities are considering what's happening in terms of state funding.

In terms of what it does with the endowment disclosure, with divestment, I really haven't seen a clear indication from the university in terms of what state funding plays in that decision making process.

Reporter, Liam Beran
Provided by Liam Beran
Reporter, Liam Beran

Gutierrez: What's coming up for you as you report on the protests at the university you attend, and you're set to graduate from next semester and the protests you're seeing across the state?

Beran: Wednesday, I'm willing to say, was probably one of the most stressful reporting experiences I've ever had, and it's tough to watch what was happening to people who might be your professors or students, coworkers, so that's definitely something that was on my mind as I was reporting it.

It's been a tense time on campus in general, and so I really don't think that's off anyone's mind throughout the press corps reporting on this, in terms of the amount of stress that people are under and we're seeing this happen nationally, we're seeing it happen across the state, even Milwaukee, most prominently. But then Oshkosh and Eau Claire have now done protests as well.

And so it's an interesting time to be a reporter in Madison reporting on this, especially because we are seeing the university become really concretely tied to these national stories about what's going on with the encampments. It definitely feels like a really intense moment for students, both in the encampment and outside [of it].


Jimmy is a WUWM producer for Lake Effect.
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