Had Yale’s Chief Investment Officer, David Swensen, attended our Feb. 3 teach-in on Endowment Justice, he would know that the event was about Yale’s extreme accumulation of wealth and the logics that give thrust to its mechanisms. It was about framing Yale’s endowment historically, acknowledging that Yale’s first professorship was endowed by a slaveholder and understanding that those tenets of greed and white supremacy continue to characterize its architectures. It presented some of Yale’s most pernicious investments and featured New Haven residents who spoke about how the University not only fails to invest, but in many ways causes harm in our city.
It is clear from Swensen’s criticisms that he was briefed on the event and studied our slides. That makes it surprising that he could so fully miss the point. He fails to engage with the meta-analyses we proposed, implying that we made hasty generalizations from insufficient evidence. We care immensely about precision and factual accuracy. Swensen’s statements have attempted to distract the Yale community from the injustices that the wealth-hoarding of our endowment perpetuates. Swensen, who made $4.2 million in 2015 as reported by Bloomberg and the News, would have people forget that — according to a 2016 University document — Yale spends between 4 and 6.5 percent of the endowment’s market value annually while producing a 6.6 percent per annum return for the ten year period ending in June 2017. In 2015, it paid fund managers $480 million but devoted less than $170 million to tuition assistance, according to research cited in a USA Today article that same year. We calculate that spending 1.3 percent of the total endowment would eliminate tuition, and that spending 2 percent of the total endowment would cover New Haven’s entire annual budget.
Swensen’s silence toward the information we presented on many of Yale’s investments amounts to a tacit acknowledgement of its accuracy. We presented on the $678 million we know Yale invests in the fossil industry — this is only what’s found on public tax forms; since most of Yale’s investments aren’t divulged publicly, Yale’s total investment in fossil fuels might be much more. Swensen doesn’t want to address that: He has attempted to make a public face for Yale as a climate-conscious investor.
He doesn’t deny the University’s history of profiting off debt crises of distressed economies. Maybe he wants to deflect attention from the quiet sale of Puerto Rican debt by one of Yale’s fund managers after activists critiqued the University for its holdings, and he wants to stymie conversation about possible continued investments in Puerto Rico’s debt. He doesn’t challenge facts we presented about Yale’s ownership of a forest and shadow company that, if approved, would’ve enabled a power line to decimate Pessamit lands in Quebec. He doesn’t even mention the other investments we described, including predatory payday loans, student loans and subprime mortgage companies.
As Swensen endeavors to infantilize activists and discredit student reporters, he reinforces the patriarchal and white supremacist idea of finance as an objective vocabulary wielded by a select few. As we stated at the teach in: We interrogate the language of finance and the endowment because we sense that this discourse and expertise invisibilizes certain peoples and the violence enacted against them in the name of profit.
We are told a fiction: that Yale can only provide a quality education if it continues investing the way it does now. We’re told that students would have to sacrifice if Yale removed its money from industries that propagate racism, generate inequality and destroy the planet and invested instead in sustainable solutions and local communities. This myth similarly justifies the continued existence of the student income contribution. The story of scarcity belies Yale’s $27.2 billion endowment.
We should be talking about how Yale could use its massive endowment to stay accountable to its city, influence and history. Yale could divest from subprime mortgage companies that foreclose on New Haven residents. It could employ many more New Haven workers at the University and hospital. The New Haven public school system currently has a budget shortfall of $10 million and is proposing firing teachers and closing schools; Yale could cover that deficit with hardly more than a day of the endowment’s profits. Instead, it continues to enjoy nonprofit status while effectively acting as a for-profit hedge fund, undermining New Haven’s tax base.
We are commanded to apologize for our critique because the machinery of finance — which, we do not deny, our fund managers so impeccably wield — is ostensibly for “us”: Yale students, the elite, gilded few. We are commanded to clasp our hands in unquestioning praise of the endowment’s financial eminence and to blithely ignore its reliance on tenets of inequality, exploitation and the growing untenability of life on Earth. But what if our families are directly impacted? What if some of us dream of creating a sustainable and just world? What if some of us dream of redistribution, reparations? What if we do not want blood money?
Rachel Calnek-Sugin is a junior in Silliman College and Cassandra Darrow is a senior in Hopper College. Contact them at firstname.lastname@example.org and email@example.com . They are both members of Fossil Free Yale.
Correction, March 7: A previous version of this column stated that the Yale endowment produced an annual return of 11 percent for the last decade. In fact, the endowment returned 11 percent per year for the ten year period ending in June 2014. For the ten year period ending in June 2017, the endowment returned 6.6 percent per annum.