Jessai Flores

In the weeks and months leading up to Yale’s April 17 announcement that it would not divest from holdings in military weapons manufacturers, institutional divestment — especially as it pertains to Israel’s war against Hamas in Gaza — has long remained a source of student concern

The weeks following this decision have been headlined by pro-divestment protests of a scale largely unseen on campus since South African apartheid, including an eight-day hunger strike, a three-night encampment on Beinecke Plaza and the arrest of 44 student protesters, all demanding Yale’s disclosure of and divestment from its holdings in military weapons manufacturers. 

Students, who spent the week following the arrests gathering in lower numbers on Cross Campus, have pitched a second encampment on the lawn and continue to call for divestment. 

Alumni and parents have joined the divestment movement as well, with over 2,300 signing an April 19 letter pledging to withhold donations until the University publicly commits to divestment. The signatories of this letter join the writers of over 2,800 letters addressed to University President Salovey during various ongoing letter campaigns in the past year with the same demands.

The case against divestment has not gone unvoiced, either. In an April 17 letter to Salovey, 161 students, parents, alumni and professors across Yale College and Yale’s graduate schools opposed divestment, arguing that Yale’s investments should support the military defense of nations such as Israel and Ukraine.

Mixed opinions on campus regarding divestment point to key disagreements on the extent to which Yale invests in military weapons manufacturing. The University’s indirect system for considering the public’s ethical investment concerns and the secretive nature of the University’s investments makes it difficult to determine the full extent of Yale’s holdings. Administrators continue to decline publicly disclosing these investments, citing “contractual obligations” and the need to “maintain competitive advantage.”

The topic of divestment from military weapons manufacturers in Israel has sparked protests at other university campuses nationwide, though the scope of students’ demands varies. While pro-divestment activists at Yale largely demand disclosure of and divestment from military weapons investments, students at Columbia have broadened their demands for divestment to apply more generally to companies that profit from Israel’s military offensive in Gaza, such as Google.

Of Yale’s $40.7 billion endowment for the 2023 fiscal year, the University publicly discloses just under 0.3 percent through quarterly SEC filings, according to Yale’s February 2024 SEC Form 13F. 99.7 percent of the endowment remains elusive through investments in holding companies, limited partnerships and other related organizations, many of which are privately managed and are not subject to the same public disclosure requirements that bind Yale as a nonprofit institution. Still, within the known 0.3 percent, there is evidence that Yale invests more than $110,000 in military weapons manufacturers, including companies that directly contract with the Israeli government and military. 

In the wake of increased and sustained calls for divestment, the News investigated what is known about the University’s investments.

I. How does Yale make decisions about its endowment?

The Yale Corporation — also known as the Board of Trustees — consists of the University president and 16 trustees, along with the governor and lieutenant governor of Connecticut, who are both members ex officio. The 16 trustees can be further divided into 10 successor trustees, who are selected from among Yale alumni and appointed by the current board, as well as six alumni fellows, who are elected by Yale alumni. Successor trustees may serve up to two six-year terms, while alumni fellows serve one six-year term, though all trustees have the same responsibilities, per the Corporation’s website.

The Yale Corporation is advised by the Corporation Committee on Investor Responsibility, which is composed of three trustees — Catharine Bond Hill GRD ’85, who chairs the committee, Marta Tellado GRD ’02 and Neal Wolin ’83 LAW ’88. The CCIR “recommends policy to the full Corporation and is charged with implementing approved policy,” per the website of the Advisory Committee on Investor Responsibility. According to the same website, the ACIR, consisting of faculty, students, staff and alumni, assists the CCIR by reviewing and voting on the “University’s social responsibility proxies” in line with Yale’s ethical investment policies. 

According to the Corporation’s by-laws, the CCIR also “provides policy guidance to the Advisory Committee on Investor Responsibility and to the Investments Office on the voting of proxies on shareholder resolutions on matters relating to ethical issues.”

Pro-divestment student activists have previously criticized the ACIR for being “a body with no decision-making authority.” Student organizers with the Endowment Justice Coalition at Yale have also criticized the Yale Corporation for being unreceptive to student attempts at communication.

The Yale Corporation’s contact form notes that “the trustees will not review messages related to ethical investing issues.” It instead asks that messages related to ethical investing be directed to the ACIR. The contact form is the most direct method for members of the Yale community to communicate with the Corporation as a whole, as “all messages will be read by the senior trustee and will be made available to all trustees and the president,” per the Corporation’s website. Joshua Bekenstein ’80, who is also a senior advisor to Bain Capital, serves as the Corporation’s current senior trustee.

A University spokesperson previously wrote to the News that, beyond the contact form, trustees engage with students through formal and informal methods, such as meeting with student leaders and attending residential college teas. 

The spokesperson also wrote that the ACIR serves as “the best forum for the community on ethical investing issues” in order to “preserve the integrity and rigor of [Yale’s investment] process.” It is not immediately clear how direct community comments on ethical investment to the Yale Corporation affect the investment process. 

II. What is Yale’s weapons manufacturing investment policy?

In 2018, the Yale Corporation adopted a policy that forbade it from investing in retail outlets that market and sell assault weapons to the general public due to the “grave social injury” that they cause. In a statement announcing the 2018 policy, the CCIR wrote that it “gave special consideration to various factors raised by the ACIR,” such as the distinction between assault weapons retailers and military weapons manufacturers. The statement also stated Yale’s interest in divesting from the former category, given the “large number of shootings that occur at educational institutions.”

On Wednesday, April 17, the University announced in a statement that it would expand the 2018 policy to apply to all assault weapons manufacturers that “engage in retail activities to the general public” but ultimately would not divest from military weapons manufacturers, as “the ACIR concluded that military weapons manufacturing for authorized sales did not meet the threshold of grave social injury.”

In the statement, the ACIR cited “The Ethical Investor: Universities and Corporate Responsibility,” a 1972 book written by John G. Simon LAW ’53, then a professor at Yale Law School. The book, which the ACIR also refers to as “the Guidelines,” established Yale’s criteria for reviewing public comment on investment and serves as a blueprint for ethical investing policies at Yale and peer institutions. The Guidelines define social injury as “the injurious impact which the activities of a company are found to have on consumers, employees, or other persons, particularly including activities which violate, or frustrate the enforcement of, rules of domestic or international law intended to protect individuals against deprivation of health, safety, or basic freedoms.” The Guidelines stipulate a discovery of social injury as a prerequisite for divestment.

As the Guidelines also specify that, “Social injury shall not consist of doing business with other companies which are themselves engaged in socially injurious activities,” weapons manufacturers that sell to entities such as military forces rather than to the general public do not seem to meet the Corporation’s direct threshold of social injury. The ACIR also highlights that military weapons manufacturing “supports socially necessary uses, such as law enforcement and national security.”

Even if military weapons manufacturers met the threshold, a finding of a company’s social injury would not automatically entail Yale’s divestment from holdings in that company. The Guidelines list several caveats to the University’s exercise of shareholder rights, including cases in which “correction of such social injury will impose a serious competitive disadvantage on the company involved (in relation to other companies in the same industry which cause similar social injury).” 

In such cases, the University would defer unilateral divestment until it determines “that it will not be possible for it or others to induce the management of the company to bring about industrywide corrective action within the constraints, if any, imposed by the antitrust laws,” per the Guidelines.

Other instances in which Yale would not automatically divest include cases in which company or industry-wide action could not “reasonably and appropriately” address social injury, as well as cases in which divestment would impair the University’s “educational mission (for example, by … causing deep divisions within the university community).”  

III. Why hasn’t Yale disclosed its investments?

On the third night of their encampment on Beinecke Plaza, pro-divestment organizers declined University administrators’ offers to meet with a member of the CCIR and another Yale trustee. One organizer pointed to Yale’s continued lack of transparency around its investments and reasoned that disclosure would have allowed students and trustees to “have a civil, informed discussion” on the issues at hand.

However, disclosure may not have been a condition that administrators were free to offer during negotiations with pro-divestment organizers, which took place during the weekend of the encampment. 

Both Yale College Dean Pericles Lewis and the University spokesperson have previously written to the News that the University is bound by a “number of contractual obligations” that bar disclosure.

Beyond legal requirements, several sources point to the strategic benefits of nondisclosure. The Yale Investments Office’s website states that part of the competitive advantage that Yale’s investment partners have lies in their ability to find “differentiated investments.”

As the University spokesperson previously explained, publicizing Yale’s relationships with its investment partners may also increase competition for access to these partners.

“This [competition] would ultimately impact the Endowment’s ability to support our financial aid, extraordinary teaching, and state of the art research,” the University spokesperson wrote to the News.

IV. What is publicly available about Yale’s investments?

Yale’s February 2024 SEC filings disclose almost $113 million in assets under management, or just under 0.3 percent of Yale’s $40.7 billion endowment. Only a fraction of Yale’s investments is available through Yale’s Form 13F filings, as the SEC mainly requires disclosure of U.S. exchange-traded stocks, shares of closed-end investment companies and shares of exchange-traded funds. 

Approximately $98 million of these are directly held in shares of five companies in non-weapons sectors ranging from education to investment management: Albertsons Companies, Allurion Technologies, Arvinas, Udemy and Victory Capital Holdings.

According to the same filings, the University also invests in exchange-traded funds, which are collections of assets managed by third parties and traded on the stock exchange. ETFs can diversify an investor’s portfolio by investing in multiple assets across various sectors and industries, thus reducing the risk of financial loss inherent in any single investment. Through investments in ETFs, investors’ money may gain exposure to certain companies even without investors directly purchasing shares of those companies.

Yale holds over 6,400 shares of the iShares Core S&P Total U.S. Stock Market ETF, valued in total at $680,000. The University also holds 342,000 shares of Vanguard FTSE Emerging Markets ETF, comprising over $14 million in total value. 

iShares Core S&P Total U.S. Stock Market ETF — or ITOT — is managed by Blackrock. Blackrock invests 3.18 percent of the ITOT ETF portfolio, which translates to about $21,600 of Yale’s holdings, in military contracting, per Morningstar, an investment research and management company. According to the iShares website, the ITOT ETF invests in companies that engage specifically in military weapons manufacturing, including but not limited to General Electric, Honeywell International, Raytheon, Boeing, Eaton Corporation and Lockheed Martin

At this time, the News has not been able to independently verify which other companies fall within the 3.18 percent of the ITOT ETF portfolio that is invested in military contractors, which are distinct from weapons manufacturers. Not all military contractors directly engage in weapons manufacturing— some may instead provide tailor-made products or services to the military or defense industry, per Morningstar’s portfolio product involvement methodology

Vanguard FTSE Emerging Markets ETF — or VWO — is similarly exposed to military weapons manufacturers. According to Morningstar, 0.63 percent of VWO ETF’s portfolio — equivalent to $88,500 of Yale’s total $14 million in the ETF — is invested in military contracting. According to the Vanguard website, the VWO ETF portfolio includes investments in companies that engage in military weapons manufacturing, such as Bharat Electronics, Adani Enterprises and Tata Power

The News has not been able to verify which companies fall within the 0.63 percent of the VWO ETF portfolio that Morningstar identifies as invested in military contracting, or which companies in this 0.63 percent specifically engage in weapons manufacturing.

Through Yale’s holdings in ITOT and VWO, there is evidence that Yale’s investments are exposed to military weapons manufacturers. However, a lack of publicly available sources to investigate specific companies within these ETFs’ portfolios makes it difficult to quantify the full extent of Yale’s holdings in military weapons manufacturing, even within the 0.3 percent of the endowment made available through the University’s SEC filings.

V. What is hidden from the public?

Just over 99.7 percent of Yale’s total endowment can be attributed to the University’s ownership of shares in holding companies, limited partnerships and other related organizations. 

According to Yale’s June 2022 tax filings, which were submitted on May 15, 2023, the University is also associated with at least 165 partnerships, 20 corporations or trusts and 68 tax-exempt organizations or disregarded entities. Yale’s percentage of ownership in its related partnerships, corporations and trusts ranges from 50.67 percent to 100 percent.

The tax filings list the primary activity for the vast majority of these organizations as investment, though some organizations fund scholarships, promote alumni activities or support healthcare in New Haven, among other functions. Because many of these organizations likely allocate money into different investments, and many are directly controlled by third parties per Yale’s tax filings, there could be at least two degrees of separation between Yale and the final destination of its endowment dollars. 

Many of the organizations are private companies that are not subject to the same federal filing requirements to which Yale is subject as a nonprofit institution. It is possible that, through private investments and related organizations, Yale has further holdings in military weapons manufacturers within the 99.7 percent of its endowment that is not publicly disclosed.

Before its April 17 non-divestment decision, the Yale Corporation most recently divested from CoreCivic and GEO Group, the two largest private prison companies in the United States, in October 2021.

Correction, April 29: This article has been updated to amend a calculation error. 

Yolanda Wang (she/her) covers endowment, finances, and donations. She is a sophomore in Davenport College majoring in political science.