Story of the Week: September 2020

“[A] 15.2% annual reduction in endowment spending [could mean]… Increases in annual tuition rates (or a reduction in existing scholarships) of as much as $3,265 per student per year, [and] as much as an 11.5% reduction in faculty spending, which in turn could lead to fewer classes or increased class sizes.”

“...based on either the actual historical patterns of funding by these universities [i.e., Columbia, Harvard, MIT, NYU, and Yale] or the academic literature, it seems clear that a reduction in endowment fund returns as a consequence of divestment would have material impacts on an endowment’s ability to fund a university’s key institutional goals.”

“[Columbia, Harvard, MIT, NYU, and Yale] alone stand to forfeit more than $195 million in investment returns each year [if they divest from fossil fuels], without changing portfolio risk.”

“Overall, fossil fuel divestment very likely has no environmental benefits and only serves to penalize public pension funds at a time when these funds desperately need higher returns to cover their current and future obligations.”