On Thursday, Jan. 16 the University’s Public Interest Investment Advisory Committee (PIIAC) released a report that declined a divestment proposal. The proposal, drafted by Hopkins Justice Collective (HJC), an organization of Hopkins students, staff and alumni that has been vocal in its advocacy for Palestine, requested that the University divest its endowment from companies with ties to with the state of Israel, specifically those involved in the production of weapons. HJC’s proposal also asked that Hopkins disclose the financial investments of its endowment, both now and in the future. The PIIAC declined both requests with a vote of 15 to 1.
The PIIAC was created by the University’s Board of Trustees to advise them on investment decisions for the University’s endowment, especially those that may be accompanied by considerable social impact. The 16 committee members were appointed by the provost and executive vice president for finance and administration. The PIIAC cited their reasons for rejecting HJC’s proposal in their report, including that the divestment lacked community consensus and would be a political stance.
“The committee found that the proposed divestment action does not have the consensus of the Johns Hopkins community and would politicize the endowment in a way that conflicts with both the university’s core commitment to free inquiry and its obligation to foster a diversity of perspectives within our academic community,” the report states. “Additionally, the committee found that the proposed divestment action would have a de minimis impact on the targeted corporations but a significant negative impact on the university’s finances.”
The committee cited several reasons for their decision. The report stated there should be a very high bar for divestment, and divestment should only be used as a “last resort” and for “rare, once-in-a-generation moments.” Secondly, the report stated that the University exercise institutional restraint, referring back to a letter published by President Ronald J. Daniels and University leadership on August 15, 2024. They also stated that divesting from the firms mentioned in the proposal would not have a substantial impact on the firms’ finances and that the costs of divesting from these companies — such as decline in financial aid for Hopkins students and reduced research spending — are too high.
HJC stated their reaction to the University’s decision in an email to The News-Letter. They argued that the administration, in rejecting the proposal, has constructed a process designed to reinforce the status quo rather than promote change, and they condemned the PIIAC process as a barrier to advocacy.
“From the beginning, the University’s PIIAC process was vague, nontransparent, and undemocratic. The PIIAC, handpicked by the Office of the Provost, was set up to fail,” HJC wrote. “Nonetheless, Hopkins Justice Collective engaged in this process in good faith, and in this process PIIAC has revealed itself as a thinly veiled attempt to suppress voices rightfully calling for our university to acknowledge and address their role in genocide and apartheid.”
HJC suggested that the PIIAC did not meaningfully engage with the content of their proposal and stated that the committee’s suggestion that divesting from the companies in question would not meaningfully impact their financial situations was contradictory to the University’s acknowledgement that it is the collective impact of divestment that lends it significance.
They listed several other points of contention with the report, including a suggestion that PIIAC has overstepped its boundaries by recommending that the Board of Trustees reevaluate the divestment process and the PIIAC itself.
“Ultimately, the PIIAC’s undemocratic actions and final decision are rife with contradictions that underline the lack of good-faith engagement with this call for divestment, which is supported by hundreds of petition signatures and multiple student organizations,” they wrote. “The PIIAC has failed the JHU community — this decision will remain a stain in Hopkins history.”
The committee also declined to consider HJC’s request that the University reveal the current and future investments of its endowment.
“The request to disclose all the investments in JHU’s endowment is neither within the PIIAC’s scope nor charge,” the report states. “The committee also noted that the contractual and legal restrictions governing the vast majority of the university’s endowment mean that JHU — like all our peer institutions — cannot legally disclose the details of most of its investments.”
Starting June 2024, the committee convened 10 times to discuss HJC’s proposal, deciding to consider the document despite its length, which substantially exceeded the PIIAC’s proposal page limit. While proposals are limited to 12 pages, the report states that HJC’s proposal was over 76 pages. The committee chose to review the material as a one-time exception to its page limit.
HJC expressed a different sentiment on the committee’s consideration of the proposal. In an interview with The News-Letter, they argued that the PIIAC board did not meaningfully consider a large portion of the community’s lobbying efforts to promote the proposal. According to the meeting minutes from the PIIAC board, they wrote, the proposal was voted on in mid-November, though the decision was released in mid-January.
“If PIIAC board members legitimately cared to evaluate consensus, they would not operate in such blatant secrecy,” they wrote. “Citing insufficient consensus to reject our proposal is lazy, unjust, and puts the board at fault for failing to use their institutional advantage to put the conversation into campus spotlight outside of hyperlinks and undistinguishable emails.”
The report by the board also explained how the University’s endowment structure has changed since its divestment from South African companies in the 1980’s, due to apartheid policies, and divestment from tobacco companies in the 1990’s. The current endowment structure, the PIIAC argued, makes divestment of any kind “costly, difficult, and highly impractical.”
HJC commented further on this issue, stating that this closes the door to the divestment process as a whole.
“We find it disturbing that the PIIAC decision puts forth a discussion on the elimination of the divestment process altogether, potentially closing the door to future student input on how their tuition dollars are spent,” HJC stated.
The PIIAC also recommended that the University divest from fossil fuels in 2017. However, the Board of Trustees only voted for divestment from separately managed holdings they had in thermal coal companies, starting that they believed that it was impractical to divest from the University’s pooled investments or index funds that contained marginal investments in thermal coal companies.
In the most recent report, the PIIAC stated that over the past 50 years, endowment investment strategies have shifted from direct investments in public equities and bonds to pooled investments in private markets. This “endowment model,” popularized by Yale University in the 1990’s, focuses on higher returns through long-term, less liquid investments like hedge funds, private equity and venture capital managed by specialized third-party firms.
The document states, “Universities, including JHU, generally have 80–100% of their endowments in these pooled investments, which require multi-year commitments and a high level of confidentiality outlined in legally binding contracts to protect the firms’ investment strategies.”
The PIIAC also recommended to the Board of Trustees that they reconsider the process for divestment proposals to ensure they set “appropriate expectations and guidelines” for the community.
The report did not specify what those changes to the process would look like, but noted that other university boards have taken similar course and stated that the ability of the Hopkins community to express their opinions on the University’s involvement in public issues would be maintained.
The report concluded with an acknowledgement of HJC’s commitment to expressing their convictions and an encouragement of respectful debate and inquiry within the Hopkins community.
In their interview with The News-Letter, HJC commented on how this decision might affect their future protests and advocacy for Palestine.
“As our proposal demonstrates, divestment from apartheid on grounds of human rights has happened before, as shown by Johns Hopkins’ decision to divest from South Africa during its apartheid government,” they wrote. “Our cause for justice remains steadfast in spite of insincere, biased institutions.”
