Socially Responsible Investment in Retrospect: The Apartheid Divestment Campaign

By: Steven Tian, Finance Editor

Advocacy for socially responsible investing can take many forms, and the power of mass mobilization in promoting socially responsible investing is especially prominent at Yale University. At Yale, student activists and student leaders have had a long history of fighting for what they believe to be right and equitable. Whether it is fighting to change the name of Calhoun College, or seeking to make Yale more accessible for students from lower-income backgrounds, Yale students have proven on many occasions that they are not afraid to stand up for moral righteousness, no matter how daunting the obstacles may seem.

This fight for fairness extends to Yale’s investment strategy. Yale University, with an endowment that currently stands at nearly 26 billion dollars, is one of the largest institutional investors in the country. [1] The Investments Office, led by the legendary David Swenson, is responsible for investing Yale’s largesse and utilizes a famously unorthodox strategy of investing in non-traditional assets such as hedge funds, private equity, venture capital, and real estate. [2] Since Swenson took over in 1985, the endowment has consistently outperformed indexes and hedge funds by a healthy margin, routinely drawing returns in the 20 percent range. [5]

While Swenson has drawn widespread renown and praise for his tremendous accomplishments – some alumni have even proposed naming a residential college after him, and the Head of College House in Berkeley is named the Swenson House – the Yale Investments Office has not escaped the notice of students who yearn for Yale to take the lead in demonstrating what socially responsible investing really means. Outspoken student leaders in organizations such as Fossil Free Yale (FFY) and Yale Students for Prison Divestment have taken it upon themselves to fight day in and day out for what they believe in – socially responsible investment ideals. [7] This attitude of action is not a new phenomenon: the effort to advocate for socially responsible investing at Yale extends decades into the past.

In 1985, students from around the world were beset with frustration as the horrors of apartheid in South Africa gradually came to light. However, courageous student leaders at Yale were not satisfied with simply condemning apartheid with rhetoric. They took it upon themselves to act, starting the Yale Undergraduate Apartheid Divestment Campaign in 1985 in an attempt to convince the Yale Investments Office to divest from apartheid. At the time, Yale had approximately 300 million dollars invested in the South African economy. Over 300 students participated in protests during the following fall and spring, and many of them were arrested on the grounds of creating a public disturbance. [4] The student organizers then built a shantytown on Beinecke Plaza in order to force the University to act, and the University proceeded to do just that: on April 14th, 1986, Yale University authorities sent in a demolition crew to disassemble the shantytown. 78 students were arrested for putting up a resistance on that day, which prompted even more students to act. On April 19, the student activists re-built the shantytown, this time with the support of a recently formed special faculty committe. [4]

During this same period, the Yale administration was embroiled in tense and confrontational contract negotiations with Local 35, a regional Connecticut branch of the International Brotherhood of Electrical Workers (IBEW), and was occupied by other protest efforts. As a likely result of these ongoing pressures, President Bart Giamatti declined to order a second demolition of the shantytown on Beinecke Plaza. [6] The shantytown continued to stand for the next few years, a focal point for student leaders who wanted to send the Yale administration a strong message. The shantytown, nicknamed “Winnie Mandela City”, became an integral hub of student life on campus. The shantytown was eventually burnt down by a disgruntled Yale alumnus, but apartheid divestment demonstrations continued. Finally, in early 1990s, after years of student protests and student activism, the Yale Investments Office divested from the vast majority of its holdings in companeis that were operating in Aparthied era South Africa. [3]

The fight for fair financial practices at Yale extends to the present day, demonstrating the power of mobilization in fighting for socially responsible investing.



[1] Alexander, John D. “Investment Return of 3.4% Brings Yale Endowment Value to $25.4 Billion.” Yale News. Office of Public Affairs and Communication, 23 Sept. 2016. Web. 13 Mar. 2017.

[2] Abbott, Brian. “Attempting to Mimic the Yale Investments Portfolio.” Seeking Alpha Pro. Seeking Alpha, 29 Jan. 2013. Web. 13 Mar. 2017.

[3] Branch, Mark. “When Yale activists targeted apartheid.” Yale Alumni Magazine. Yale Alumni Publications, December 2016. Web. 14 Mar. 2017.

[4] Countryman, Matthew. “Divestment Then, and Divestment Now.” Yale Daily News. Yale Daily News, 23 Sept. 2016. Web. 08 Feb. 2017.

[5] Gunther, Marc. “Yale’s $8 Billion Man.” Yale Alumni Magazine. Yale Alumni Publications, July 2005. Web. 13 Mar. 2017.

[6] Madden, Richard L. “Yale Panel on South Africa Says It’s Split on Divestment.” New York Times. New York Times, 22 Jul. 1986. Web. 13 Mar. 2017.

[7] Schick, Finnegan. “Yale to Partially Divest from Fossil Fuels.” Yale Daily News. Yale Daily News, 12 Apri. 2016. Web. 13 Mar. 2017.

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