BDS could cost universities billions of dollars, new ADL report says

Adopting BDS, according to the report, would incinerate $33.21 billion of future returns for the 100 largest university endowments over the next 10 years.

By Dion J. Pierre, The Algemeiner

Colleges and universities will lose tens of billions of dollars collectively from their endowments if they capitulate to demands to divest from Israel and companies that do business with it, according to a new report released on Thursday by JLens, a Jewish investor network that is part of the Anti-Defamation League (ADL).

Titled “The Impact of Israel Divestment on Equity Portfolios: Forecasting BDS’s Financial Toll on University Endowments,” the report presents the potential financial impact of universities adopting the boycott, divestment, and sanctions (BDS) movement, which seeks to isolate Israel from the international community as a step toward its eventual elimination.

The ADL describes its report as “the first of its kind” to measure the havoc BDS would wreak on university endowments, the core of a higher education institution’s financial health, by quantifying the returns for investment portfolios purged of Israel-linked companies.

“Our research demonstrates that university endowments that divest from Israel could face significant financial consequences,” JLens managing director Ari Hoffnung said in a statement.

“Lower investment returns could compromise a university’s ability to provide scholarships, fund research, and invest in campus facilities.”

The numbers are harrowing. Adopting BDS, according to the report, would incinerate $33.21 billion of future returns for the 100 largest university endowments over the next 10 years, with Harvard University losing $2.5 billion and the University of Texas losing $2.2 billion.

Other schools would forfeit over $1 billion, including the University of Pennsylvania, Stanford University, and Princeton University. For others, such as the University of Michigan and Dartmouth College, the damages would total in the hundreds of millions.

“This groundbreaking report approached the morally problematic BDS movement from an entirely new direction — its negative impact on portfolio returns,” New York University adjunct professor Michael Lustig said in a statement extolling the report.

“JLens has done a great job in quantifying the financial effects of implementing the suggestions of this pernicious movement, and importantly, they ‘show their work’ by providing full transparency into their methodology, and properly caveat the points where assumptions must necessarily be made. This report will prove to be an important tool in helping to fight noxious BDS advocacy.”

The report adds that BDS proponents are capricious, making them unreliable investment advisers. They will add a company to the BDS “target list” for appearing to do business with Israel or Israeli companies and then fail to remove it even after the business ends.

For example, JLens notes that BDS continues to name Microsoft as a “target” four years after it sold its stake in the Israeli software company AllVision.

BDS proponents also offer conflicting reasons for divestment, with some limiting their grievance to the sale of weapons to the Israeli military and others aiming to halt any and all economic activity with Israel.

Despite these inconsistencies, BDS proponents claim to speak with a unified voice.

“Additionally, the landscape of companies doing business in Israel is vast and ever-changing, making it challenging to compile a definitive list of BDS targets and that does not become quickly outdated,” JLens explained.

“The list of potential BDS targets can expand at any time due to evolving geopolitical events and misguided activists campaigns. This dynamic nature of BDS targeting was exemplified during the editing phase of this research report, when BDS proponents expanded their calls for boycotts and divestments to include major corporations like Coca-Cola … this recent addition underscores the fluid nature of BDS campaigns and the potential for rapid shifts in targeted companies.”

American universities are largely rejecting demands to divest from Israel and entities linked to the Jewish state, but some have embraced divestment or other policies approximating it, Inside Higher Ed reported earlier this month, noting that California State University-Sacramento has said it will not invest in companies which “profit from genocide, ethnic cleansing, and activities that violate fundamental human rights,” an ambiguous turn of phrase that does not specifically mention Israel.

Additionally, the outlet added, Union Theological Seminary in the City of New York has committed to implementing “socially responsible investment screens” that prevent investments in companies “substantially and intractably benefiting from the war in Palestine.”

As The Algemeiner has previously reported, Brown University’s Corporation of trustees will soon vote on a divestment proposal based on the demands of a group which calls itself the Brown Divest Coalition (BDC).

According to The Brown Daily Herald, Brown president Christina Paxson initially only promised the protesters a meeting with members of the Brown Corporation, but the students pushed for more concessions and ultimately coaxed her into making divestment a real possibility.

JLens says in its report that Brown would lose $309 million dollars if it chooses to accept the investment advice of its undergraduates. The mere possibility of it is already causing damage.

Earlier this month, a trustee of the Brown Corporation, Joseph Edelman, resigned from his position, citing the upcoming vote.

“It’s no coincidence that leading pro-boycott groups have ties to terrorist organizations that seek the annihilation of the Jewish people,” he wrote in an op-ed, published by the Wall Street Journal, announcing his resignation.

“In the end, that is the goal of the BDS movement, and I can’t accept the treatment of a hate movement as legitimate and deserving of a hearing. Brown’s policy of appeasement won’t work. It’s a capitulation to the very hatred that led to the Holocaust and the unspeakable horrors of Oct. 7.”

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