Op-Ed: In Defense of Our Endowment

Editor’s note: This article was initially published in The Daily Gazette, Swarthmore’s online, daily newspaper founded in Fall 1996. As of Fall 2018, the DG has merged with The Phoenix. See the about page to read more about the DG.

Op-Ed Submitted by Zoe Wray’16, Preston Cooper’15, Tyler Becker’14, Paige Willey’16, Cole Turner’15, Riley Collins’16, Savannah Saunders’16, and Nicholas Zahorodny’16.

On behalf of the Swarthmore Conservative Society, we would like to express our opposition to the campus movement that calls upon the College to divest from fossil fuels. Quite plainly, we write in defense of our endowment. We respect the passion of Mountain Justice members, the History Department, and other pro-divestment groups on campus, but passion cannot replace facts.

This is a political issue, and our endowment should not be subjected to students’ political whims. The Board of Managers is called upon to “manage the endowment to yield the best long-term financial results, rather than to pursue social objectives.” If the Board engages the demands of Mountain Justice, it invites a slippery slope: Why stop at divesting from fossil fuel companies? Why not any company that engages in highway transportation? What if other students or faculty have moral objections to other companies in our portfolio? Where do we draw the line?

Unlike many of our peer institutions, much of Swarthmore’s endowment goes directly back into sponsoring students. Even full-pay students receive a “scholarship” of $28,652. According to the College’s 2011-12 Financial Report, philanthropy provided 45 percent of educational costs, while student tuition accounted for 42 percent.

Due to the current economic stagnation in America and the enormous cost of attending Swarthmore, 57 percent of students now receive need-based financial aid. In fact, aid is one of the fastest growing line items in the College budget. Mountain Justice members dismiss this as a reason to keep our endowment partially financed by fossil fuel companies, insisting that divestment will not impact financial aid availability. But there is no such thing as a free lunch, and certainly no such thing as a free Swarthmore education. It strikes us as naive and elitist to overlook the importance of a robust endowment for funding Swarthmore’s accessibility. The Admissions Office’s need-blind policy can only continue if the endowment remains strong. Divestment threatens the socioeconomic diversity of our campus.

For better or worse, fossil fuel companies have access to tremendous capital and are some of the largest investors in the search for alternative energy solutions. For instance, Chevron is currently developing one of the largest solar photovoltaic projects in California. Critics maintain that our investment in fossil fuel industries is “unsustainable” in the long run, overlooking the extent to which free enterprise companies adapt and change with the times to stay viable and profitable.

We’re not in the business of defending Big Oil, but we are in the business of common sense. In a private equity market, divesting from a stock does not necessarily harm the targeted company. So long as the firm is profitable, someone else will almost immediately purchase that stock. All Swarthmore would shed by divesting would be the opportunity to exert shareholder pressure.

Our classmates claim that Swarthmore’s divesting would set a national example, but most Americans aren’t taking their economic cues from Swarthmore. The fact that tuition is now approaching $60,000 demonstrates our alarming inability to contain costs. In the unlikely event that Swarthmore were to set off a “domino effect” and prompt the national bankruptcy of major oil companies, the U.S. economy would risk recession, preventing the kind of alternative energy research investments America needs.

We would love a world in which renewable energy companies were at the top of the Fortune 500 list. But right now, the best economic solution is to continue to encourage a competitive market environment that forces alternative energy startups to become affordable. As of late, that hasn’t happened. The buses that President Chopp’s Office sent to the Keystone Pipeline Protest were, alas, fueled by diesel.

We as students do not have the “right” to control the College’s financial portfolio. Those decisions are rightly left up to an independent board. Mountain Justice members claim that members of the Administration and Board have met with them an astounding total of 25 times over the past 2 years. After all those discussions, the Board must remain firm: divestment is economically unreasonable.


  1. I know after this you’re going to get a ton of comments tearing this op-ed, and maybe even my comment, to shreds. But I want to thank you guys for writing what I’m sure a lot of people on campus are thinking, but are too afraid to say with Swarthmore’s oh so “tolerant” atmosphere. I hope everyone reads this article with an open mind, despite your political affiliation, and considers the repercussions and advantages of divestments – I think common sense will prevail and until such time alternative energies are cost effective, we’ll be a fossil fuel run campus. Let’s protect our endowment, so the brightest minds of our generation and the next can continue to come to Swarthmore despite rising financial costs, and be the ones to create future cost effective alternative energy solutions for the world.

  2. You do yourself a disservice by starting with a logical fallacy:

    “If the Board engages the demands of Mountain Justice, it invites a slippery slope: Why stop at divesting from fossil fuel companies? Why not any company that engages in highway transportation? What if other students or faculty have moral objections to other companies in our portfolio? Where do we draw the line?”

    Slippery slope arguments are a logical fallacy. In any situation, actors have the agency to choose whether or not to to divest independent of previous similar decisions. For example, after the Board divested from South Africa, they did not begin a divestment spree.

    It sounds to me like your main concern is about drawing a line. While there are many ways to do this, your economic focus makes me think that you could “draw the line” with a cost-benefit framework, which the rest of your op-ed already supports. Some arguments are more persuasive than others. While I have a healthy skepticism for cost-benefit analysis, I think you’d have more luck persuading campus if you start with that framework. Logical fallacies tend to strike a nerve.

    • Um no. Bottom line: If you’re going to whip out claims of logic fallacy, for darn sake you need to be precise. And you’re not.

      wtf bro

      Slippery slope arguments are not always logical fallacy, so it’s kind of funny for you to comment on a logical fallacy, at best a sin of imprecision, by, well, being imprecise. Moreover, at best slippery slope is an _informal fallacy_ so it’s even worse that you don’t make this qualification when formal and informal fallacies have very different connotations.

      Indeed, the “effectiveness” of slippery slope arguments rely on the strength of the warrant –– whether the writer can demonstrate that the claimed the first movement of divestment _persuasively_ leads to the ends of fundamental changes to endowment structure. This isn’t necessarily a failure of deductive logic. The issue you raise (perhaps reasonably) is that you don’t believe them by means of their failure or your subjectivity.

      It seems like your subjectivity might motivate this because the authors don’t declare where the “middle ground” is; indeed, they only ask where it is. The usual (informal) logical fallacy is decreeing the middle ground does not exist, which they don’t do!


    • “In any situation, actors have the agency to choose whether or not to to divest independent of previous similar decisions.”

      So what about third party arbitrators making decisions based on precedent? It’s a big part of our legal/general decision making calculus, you know…

      • Are you suggesting that a group of students would be able to sue for divestment on these grounds?

  3. No one is holding financial aid hostage. It’s one of the college’s top priorities. For example, even as Swarthmore was slashing budgets after the Great Recession, it managed to increase financial aid. (http://daily.swarthmore.edu/2009/10/01/budget/). The college finds money for its priorities. This disingenuous argument only divides students and distracts from the actual issues. I’m all for having a conservative voice on campus, but please engage responsibly.

    • Financial aid “is one of the college’s top priorities,” … except when one of its top priorities is divestment?

      • If divestment really was one of the college’s (I assume we’re talking about the people in charge of the money here) top priorities, then they would’ve divested by now?

        • Think about the obvious counterfactual I’m invoking (i.e., the world wherein the college divests). #ThoughtOverFeelings

          • Could you explain your argument using details, as opposed to debate shorthand? Not all of us have quite the same knowledge base you do.

          • But just listing abstruse smart-sounding terms worked to win all my arguments in high-school!

  4. I am tentatively against divestment, but here are a few points for the other side:

    1. What if it’s morally wrong to invest in fossil fuels? That is, the impact fossil fuel has on the environment and future generations is morally wrong. I am not saying if it is or is not morally wrong, but if it is, that can be compelling enough to override the financial interests of the college, can it not?

    2. Related to the first point, it may not have a significant effect on the stock price, but if Mountain Justice or other groups were to continue their activism and recruited other colleges/organizations, groupwide divestment could lead to meaningful impact – somewhat like boycotts or strikes historically. Of course, then you grant that it might have a detrimental impact on the economy, which is probably true, but again, if you strongly believe morally that divestment is the correct course of action, then I don’t think that this is as important of a point (I might be putting words in the mouths of more pro-divestment advocates than I though).

    • As one sensitive to the sometimes challenging moral dimensions of this issue, I understand and sympathize with the concerns raised by your comment. They do, in fact, mirror my own. Perhaps, therefore, by sharing my own thoughts on the matter, I can contribute to an attempt at a well-reasoned answer.

      Yet before proceeding under the assumption that it is immoral to invest in fossil fuels, I would venture to claim that the morality of such decisions, whether made directly or indirectly, by individuals or by institutions, should be a topic approached more critically than has been the case so far on campus. For I cannot honestly say that I have read a truly comprehensive, principled, and systematic argument affirming or denying the immorality of fossil fuel investment from any group on campus, although such arguments surely exist (and yes, on both sides!). As the ambivalence in your comment demonstrates, there are still many areas in this field for rich, intellectual discussion within the campus community, and unfortunately contenders on both sides often overleap these areas without careful enough consideration.

      To address your comment directly, however, demands that we move on, as hypocritical as it is to do so. Allow me to propose a sort of thought experiment, which although roughly sketched and unrealistic in its concrete details will hopefully help illustrate an important point. Imagine an isolated community whose sole food source consists of bread sold by a merchant that periodically visits town. And imagine that this merchant, a crafty man, has created a trade network of towns so vast that he depends for his profit on no individual group or even minor collective of groups. Our community eventually becomes aware, though, that this merchant has been stealing his bread from some of those outside the network, reducing them to starvation in the process. So, how should the town council react to such a moral quandary? Each individual on the council might abhor this merchant and vow that he/she, as an individual, would rather starve than buy another loaf. Yet, it does not follow forthwith that their responsibility for the health and safety of their people should be sacrificed in a gesture that would do nothing to halt the commission of this evil or to alleviate the suffering in which it has resulted. The council, one might argue, is not morally obligated to impose an ineffectual martyrdom upon its people.

      Admittedly, this metaphor is hyperbolic (divestment, as much as it might hurt the school, would certainly not cause its collapse; Swarthmore is by no means an “isolated community” with only one “food source” feeding its endowment, etc.) and limited (How can imported bread possibly be an “isolated” community’s sole food source? etc.), but I hope it illustrates an underlying point. Namely, it is not necessarily (and please note here the choice of “not necessarily” over “never”) immoral for a body with decision-making power to vote against a measure aimed at ending a certain evil if the adoption of such a measure would not only fail to tangibly remedy said evil but would also frustrate its fundamental purpose, on the condition, of course, that this purpose can root its ends, without theoretical or practical inconsistency, in the common good of the community.

      These considerations do not in themselves favor one side or the other. Representatives of either side may still, for example, argue, amongst many other issues, about the “tangibility” or efficacy of divestment. I hope, however, that I have helped to provide a context in which one can continue to discuss divestment, even under the assumption of an unscrupulous fossil fuel industry.

  5. “Mountain Justice members dismiss this as a reason to keep our endowment partially financed by fossil fuel companies, insisting that divestment will not impact financial aid availability. But there is no such thing as a free lunch, and certainly no such thing as a free Swarthmore education. It strikes us as naive and elitist to overlook the importance of a robust endowment for funding Swarthmore’s accessibility.”

    Could you cite your information? Substantiate your claim that the effect on the endowment will be non-negligible. MJ has provided evidence that divesting from the dozen or so companies they’ve identified will increase risk by .01%. Why should we believe your counter-claim?

    • This is the most on-point retort by far, and I’m wondering if it’s telling that no one has yet responded to this. If analysis is correct that the risk is negligible and the moral/sociopolitical impetus significant, I really don’t see what the issue is.

      • Well I think it is a little bit more complicated than MJ makes it sound, or at least what I read from them. A good portion of the endowment isn’t actually in individuals stocks, but investments in different types of funds that in turn manage a portfolio of equities. To divest from fossil fuels would require one of two things or both:

        1) Individual managers that have fossil fuels in their portfolios would have to create separately a managed fund that exclude these equities. In most cases when an entity requests a separately managed fund, it increases management and performance fees. Net returns would be reduced. Also, a fund manager that may have previously used to hedge risk with exposure to fossil fuels, may not give you a similar risk/return profile in the newly created fund as they may have in their broad fund.
        2) The college would be required to pick a different set of Portfolio managers that do not have any exposure to fossil fuels. The college may have to go down the scale of quality of risk and return profiles by changing allocations to new portfolio managers.

        TL;DR – This isn’t quite as simple as going into your Fidelity account and hitting the sell button next to your BP position.

  6. The thrust of this argument is: we should keep doing something wrong because we profit from it.

    What courage. Inspiring stuff.

  7. Does the College have an obligation to maximize endowment returns in order to fulfill its fiduciary responsibility to donors?

    • Does the college have a fiduciary responsibility to donors at all? Donations and investments are two very different things.

  8. Donations are made with the assumption that they will be managed prudently to get a maximum return.

    • Here we run into an issue on what “maximum return” means. Does it mean do whatever we can do to make the most money, whatever the side-effects of that will be? If we just want maximum monetary return, there are certainly better investments we could make. Money laundering and drug trafficking both come to mind.

      We need to take into account how the money is made. If we get slightly less money by acting morally (and SCS has yet to produce a scrap of evidence that this will be the case), so be it.

      • Money laundering and drug trafficking are illegal, so that would not be the best return since that would harm the school’s reputation/endowment (if they had to go to court or something). So your example doesn’t really work…

        • Well, in my opinion, investing in fossil fuels is just as immoral as money laundering and drug trafficking, and should be illegal.

          • This comment wasn’t me.

            Is it too much to ask, DG, for names and emails to be linked, so that if somebody wishes to use the name, they have to have the correct email?

          • May 1, 2013 at 8:21 pm Coconut was still not me. What the hell?

  9. Guys this is a great start, but MJ still has the lead, it’s time to take this from paper to real actions.
    May I suggest…
    A summer long stay for the Swarthmore Conservative Society in Weld County, Colorado.
    Yes you might catch a few genetic mutations, skin diseases, lung diseases, brain damage, and other still unknown health problems… no big deal!
    As the saviors and protectors of our endowment, I’m sure your faith in money will keep you strong!
    The Dean’s Office will surely help funding this trip.
    Remember, no matter the hardships and possibly irreversible consequences of your summer adventure, you will be received back at Swat like heroes.
    You did it for our endowment.

  10. ^I like that the Conservative Society has earned its own abbreviation. They’ll have to put that on their t-shirts for next year, right after they write another op-ed defending the fossil-fuel-using campus shuttles from student protest.

    I take issue with the fact that suddenly, care for the environment has become synonymous with morality. The college has a responsibility to its students first and foremost, and should use the monies obtained from donations and tuition to support us, the students. I don’t think this op-ed is meant to say “divestment means financial aid goes to hell,” but rather asserts the fact that fossil fuels, through economic crisis, tend to be safe investments.

    I offer two considerations for critics of this article:

    1. Would you have adopted the same fiercely negative attitude towards this op-ed had it not been attributed to a “conservative group”?

    2. Can you appreciate that these students are simply expressing a desire for their school to employ sustainable financial behaviors, which, as they hint at, they hope with evolve into environmentally sustainable behaviors with advances in technology?

    • Im sorry you dont think that caring for the environment is a moral issue but it is. What kind of planet do you want to live on and give to future generations, a fucked up place full of starvation and war because the earth can no longer support all of the people that live on it, where global warming and exploitation of resources mean less and less clean air and water, where places you know and love are changed because of the climate. or do you just not give a fuck about the people who are disproportionally being affected by the fossil fuel industry today and by future warming because they are poor or live far away and their lives are already tough as fuck, so this is only marginally shittier- even though it isnt.
      if you read about these companies and the power they have over governments world wide- including ours, how little they care about anything other than the bottom line, how little respect they have for human lives you don’t want anything to do with them- but theyll listen to the market if things change, theyll invest in renewables and all that good stuff, but only if they cant make money doing what theyre doing now, if they remain profitable and can preserve whatever good image they have concocted theyll stay in the fossil fuel business
      i think divestment would be a good kick in the balls, make them wake up and change something, make them realize they dont have a monopoly over everyone, and, going back to an earlier commenter who said we were alone in this- we aren’t, there are lots of other universities and colleges that are interested, someone just needs to take the first step, why shouldn’t it be us?

    • To reply to somebody’s comment, click where it says reply beside their name. That way we all know who you’re responding to and everyone is happy! Well, nobody’s ever actually happy on DG comment threads, but we’re not annoyed by having to guess where things go, and that’s something, I guess.

  11. First time commenting on DG. Thank you for demonstrating that common sense is still among us.

    I ask that the readers ask two questions:
    1. What is the purpose of the endowment?
    2. Is divesting from fossil fuels consistent with the purpose of the endowment?

  12. While I find the fossil fuel industry completely abhorrent, to me the whole divestment argument comes off as rather privileged. While Swarthmore claims to meet 100% of demonstrated need in financial aid, the fact is that rising tuition costs represent a very real financial burden for many people at this school. It would be great to be able to say “we don’t care about the endowment” and divest from any company who’s practices we disagree with, but without the money the endowment provides, this would have an impact on some families’ ability to send their children to Swarthmore. I support the idea of divestment so if anyone has any actual information on how much divesting from fossil fuel companies would affect the endowment and how much the endowment affects families’ financial aid, I’d really like to see it.

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