by James A. Bacon
I didn’t see this one coming, but I’m delighted to hear of it: Secretary of Education Aimee Guidera and Secretary of Finance Stephen Cummings have written the presidents of Virginia’s public universities asking them to verify that their endowment investments are not influenced by political considerations.
The state wants to ensure higher education institutions “invest in a manner that prioritizes risk-adjusted investment returns independent of social, political or ideological interests,” wrote Guidera and Cummings, according to Cardinal News, which obtained a copy of the letter.
The query follows a conversation between Gov. Glenn Youngkin and the state Council of Presidents in March that was prompted by calls of pro-Palestinian groups on college campuses to divest university assets tied to Israel, according to the letter.
I’ve followed this issue closely for the Jefferson Council as it has played out at the University of Virginia, and I refer Guidera, Cummings and Bacon’s Rebellion readers to this article: “Board Shows No Interest in Israel Divestment.”
President Jim Ryan and the Board of Visitors have ignored a resolution passed by the student body to divest companies doing business in Israel from UVA’s endowment.
However, UVA’s investment arm, UVIMCO, does have an ESG (environmental, social, governance) policy, and it maintains an Advisory Committee on Investor Responsibility. UVIMCO’s primary ESG focus has been mitigating systemic risks of climate change.
Does that count?
Meanwhile, Cardinal News reports a remarkable response from state Senator Mamie Locke, D-Hampton, and chair of the Senate higher education subcommittee. Said she: “This is another case of the administration dipping its political toe into higher education where it shouldn’t be.”
Let me get this straight: Team Youngkin is being “political” by asking universities to keep political considerations out of their investment decisions?
Yeah, right.
Locke’s further comments only confused the issue. Here’s how Cardinal News summarized them:
Locke, a retired Hampton University political science professor, said that while endowments are typically aligned with a university’s goals for education and research, they’re often also tied to strict specifications from donors regarding how those donations are invested and spent.
She said she doesn’t see how the state retirement system’s investment policies could be applied to education endowments and foundations. “They have separate purposes which have been established. You can’t make them one and the same.”
She later added: “You can’t make the square peg fit into that round hole.”
Locke is conflating different things. Yes, many gifts to universities are dedicated to specific purposes that are political or ideological in nature. Team Youngkin is not questioning the right of donors to endow a professorship of Hegemonic Beauty Standards or an institute dedicating to saving democracy from MAGA fascists. But that’s not what Guidera and Cummings are asking about. They want to know if there are strings are tied to how that money is invested. They want to ensure that endowments generate the maximum risk-adjusted return and aren’t hijacked to advance a crusade that most donors never signed up for.
We’re talking about a lot of money. UVA’s endowment exceeds $14 billion. As of a couple of years ago, according to an AI search, Virginia Tech’s endowment surpassed $2.6 billion and Virginia Commonwealth University’s $2 billion. Both are probably larger today.
Once the precedent has been established that universities can use their endowments to promote for political and ideological goals, what’s to stop Boards of Visitors from using endowments to advance conservative goals — divesting companies whose health care plans pay for abortions, say, or hospitals that conduct transgender surgeries, or corporations that trade with leftist regimes beloved by progressives?
Do we really want to open that Pandora’s box? Do we really want to launch another front in our culture wars? Aren’t we exhausted enough already?
James A. Bacon is contributing editor of the Jefferson Council. The views expressed here are his own.
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