The University of Maryland SGA on Wednesday is expected to discuss a resolution calling on the University System of Maryland Foundation and the University of Maryland College Park Foundation to divest from certain security, defense and military companies.
The resolution said institutions and organizations should divest their endowment funds from companies that “consistently, knowingly, and directly facilitate and enable state violence and repression, war and occupation, or severe violations of international law and human rights.”
More than 100 students at this university attended SGA committee meetings over the past two weeks to gain voting rights before the resolution is introduced.
The Diamondback looked at what the calls for divestment mean and how this university manages its endowment.
What is divestment?
Divestment is when institutions withdraw funds that their endowments have invested in specific companies.
Institutions divest “to avoid complicity in activities they deem unethical or harmful,” according to CNN. Recent advocacy for divestment has focused on companies with ties to Israel.
The SGA resolution specifies human rights violations in places such as Palestine, Sudan, Guatemala, Myanmar, Yemen, the Philippines and at the United States-Mexico border.
[UMD students attend SGA committees in anticipation of divestment resolution]
Support for divestment has increased over the past year amid Israel’s war in Gaza. Hamas killed at least 1,200 people and took about 250 people hostage in an Oct. 7, 2023, attack on Israel, according to the Associated Press. Israel declared war on Hamas the next day, and its military has since killed more than 42,000 Palestinians in Gaza, the Associated Press reported Sunday.
What is an endowment?
An endowment is the total assets of an organization, such as a university, that can be invested.
A university’s endowment fund consists of donated cash, securities and other assets, some of which are designated for specific programs and services.
Small portions of the fund are used to support the university, while most of it is invested to sustain the endowment.
Who manages the University of Maryland’s endowment?
The University of Maryland College Park Foundation is a nonprofit corporation that manages and invests assets donated to this university, according to the foundation’s website.
UMCPF pools its endowment funds with other institutions in the University System of Maryland and contracts with the university system foundation, according to the UMCPF website.
The university system foundation serves 23 institutions including universities, community colleges and other foundations, according to its website. The foundation currently manages an about $2.2 billion endowment pool.
The endowment funds scholarships, fellowships and university departments and schools across the system, according to the university system foundation’s 2023 Endowment Report.
[Two major defense contractors gave UMD more than $46 million from 2010 to 2023]
The university system foundation has an investment committee comprised of volunteers with backgrounds in finance and investment. The committee oversees the funds and makes decisions to invest the money in a way that preserves and grows the pool. The UMCPF Board of Trustees appoints some members of the committee.
UMCPF referred to this university in response to a request for comment from The Diamondback.
This university did not respond to questions from The Diamondback about the endowment fund. The university system and the university system foundation did not respond to a request for comment about the fund.
What does the university system foundation invest in?
If an ESG factor presents a “material risk” to the endowment, the university system foundation will “mitigate those risks sufficiently or not make an investment,” the statement read.
The university system foundation in 2016 decided to not make any “direct investments” in the top 100 public coal, oil and gas companies with the highest potential globally, according to the 2020 statement.
The university system foundation divested from companies that “invest primarily in fossil fuel extraction,” four years later the statement said.
What do calls for divestment at this university look like?
The divestment resolution on SGA’s agenda this week is similar to a resolution the general body failed to advance in April that urged divestment from “companies engaged in human rights violations.” Other divestment resolutions did not pass in 2017 and 2019.
The resolution said that the university system foundation may invest in companies that are implicated in “human rights violations,” including Lockheed Martin and Northrop Grumman.
If this semester’s resolution passes, the SGA will begin lobbying efforts for divestment directed at this university, the UMCP foundation, the university system and the university system foundation.
In a statement to The Diamondback on Friday, this university wrote that “any Student Government Association debate of the proposed [divestment] resolution will be conducted and led by students, and the outcome will have no bearing on university policy or practice.”
CORRECTION: A previous version of this story misstated that the University System of Maryland Foundation is a private company. The foundation is a public charity.
