Divesting University Endowments for Social/Political Reasons: Part 1

The law

Back in the day (2000-2010) there was a website called Tech Central Station a.k.a. TCS Daily, which “was an online magazine with commentary and analysis on current news from a free-market perspective.”

I was a regular contributor between 2004 and 2007. With the website now dead, my posts disappeared and now can only be found on the Wayback Machine.

Several of my TCS Daily articles dealt with divestment, starting with Those Divesting Presbyterians in 2004. Despite that head start, however, I never got around to writing a law review article on the law and policy of divestment. And now I don’t have to.

Max Schanzenbach (Northwestern) and Robert Sitkoff (Harvard) have posted two new articles on divestment. Divesting University Endowments deals with the legal issues surrounding “endowment divestment for nonfinancial reasons.” University Trustees Should Say No to Divestment, as the title foreshadows, “argues that universities should commit their endowments to a non-divestment policy, investing solely for risk and return.”

In this article, I tackle the first paper. The next will address the policy arguments in the second paper.

Overall, as you’ll see, I feel quite vindicated.