Several University of Texas System schools have joined dozens of campuses across the country embroiled in student protests calling on schools to sever financial ties with Israel and defense contractors amid the Palestinian conflict.
Schools in the University of Texas System, including schools in Austin and Dallas, have invested millions of dollars in prominent defense contractors through endowments, according to the University of Texas/Texas A&M Investment Management Company, which manages the endowment funds.
Students say the companies listed in the University of Texas System 2023 Permanent University Fund – Lockheed Martin, Boeing, Northrop Grumman and Raytheon – have helped arm the state of Israel.
According to Women for Transparency in the Arms Trade, one group that tracks stock holdings in defense contractors found that the University of Texas/Texas A&M Investment Fund held as much as $62 million in stock in arms and defense manufacturers in 2021. He said he will have approximately $31.2 million by 2023.
The fund's public equity portfolio, worth more than $26.1 billion as of August 2023, includes more than $100 million invested in Microsoft, more than $64 million in Amazon, and more than $57 million in Apple.
For companies like Boeing and Lockheed Martin, each worth more than $100 billion, the University of Texas Endowment's holdings represent only a few percent of those companies' shares.
The University of Texas has the second largest endowment in the United States, valued at more than $50 billion. BloombergHe did not respond to requests for an interview. dallas morning news.
However, UTD President Richard Benson recently agreed to meet with Palestinian students and the Jewish student body to discuss their demands.
Hundreds of students protested at the University of Texas at Austin, and some were arrested. Groups like Students for Justice in Palestine have previously urged universities to divest from defense companies through petitions.
Pro-Palestinian student organizations such as Students for Palestine Justice and the Palestine Solidarity Committee also did not respond to requests for interviews.
What is a donation?
A university endowment is money or assets donated to a university by individual donors, typically alumni. Investopedia says universities often do not repay endowment balances in full, allowing the endowment to continue to function as a self-sustaining source of funding.
These often fund things like professor salaries, facility upkeep, and scholarships, making them an important source of supplementary income for universities. The legal terms of endowments are usually very strict and do not allow universities to violate the donor's wishes. Bankruptcy filings are notorious for being one of the only ways universities can use endowments for other purposes, such as fiscal consolidation.
Sandy Baum, a senior fellow at the Urban Institute who studies university finance, said endowment endowment sales often take a long time.
“Universities that agree to divest from private prisons and fossil fuels typically take years to make that decision and then take time to implement the decision with minimal damage to their endowments.” she said.
Historically, there have been several examples of universities selling companies for political reasons. In 1977, Hampshire College in Massachusetts sold thousands of dollars in stock in Texaco, Exxon, International Harvester, and Clark Equipment, becoming the first school to separate capital from South African companies during apartheid.
But stricter limits on endowment funds now could make it easier to exit companies that support Israel, Boehm said.
“If you own individual stocks, you can sell them,” she says. “Of course, the timing of the sale can have a measurable impact on the value of the endowment. But often they own these stocks as part of an index fund or mutual fund, and the overall fund , which is a much bigger move than selling individual stocks.”
In 2017, Texas passed a law banning state agencies from investing in companies that boycott Israel, similar to laws protecting fossil fuel and firearms companies.
Are Texas universities funding Israel?
UT System schools own thousands of shares of stock in companies worth millions of dollars, including Lockheed Martin, Boeing, Northrop Grumman and Raytheon.
The university owns 3,206 shares of Northrop Grumman stock valued at approximately $1,388,595, according to the most recent Permanent University Endowment Audit Report.
The university also has 2,185 shares of Lockheed Martin stock, valued at approximately $979,836, and 6,795 shares of Raytheon stock, valued at approximately $584,622, publicly traded. He also owns 38 shares of Boeing Company stock, valued at approximately $8,452.
The fund also owns about $9.2 million in stock in Israeli software company Check Point and about $100,000 in stock in Tel Aviv-based Teva Pharmaceuticals. Additionally, it holds $1 million in Israeli government bonds and $10 million in Israeli shekel currency.
But saying a school is “funding Israel” is complex and has no easy answer, Baum said.
“First of all, it's not that easy to see the individual companies that universities invest in,” she says. “The majority of their holdings are in index funds and other mutual funds. They don't manage the individual stocks in these funds, and it would take quite a bit of research to figure it all out. right.”
She says it's also complicated to get a definition of what “funding Israel” means because of the wide variety of expressions in the student movement.
“Of course, we need to define 'financing Israel,'” Baum said. “There are multiple definitions, and even those who share the same goals may not agree on what should be included.”
While it's possible that UT System schools like UT Dallas and UT Austin may someday end their involvement with defense companies, Boehm said that day is likely not in the near future.
“Defense companies are doing a lot of things,” she said. “Even those who support a withdrawal from aid to Israel may be reluctant to completely divest from some of these companies.”
