Student protesters want California State University leaders to divest from Israel. Will they?

Reality Check is a Sacramento Bee series holding officials and organizations accountable and shining a light on their decisions. Have a tip? Email realitycheck@sacbee.com.

Across the California State University system, thousands of students have participated in protests in support of Palestinian people, and in opposition to the Israeli government and the war in Gaza.

Some demonstrations have remained peaceful; at Sacramento State and Sonoma State, campus operations have not been disrupted by the occupation. At San Francisco State, students set up more than 30 tents in front of the student center, and it too has remained relatively quiet.

The week-long occupation at Cal Poly Humboldt between April 22 and April 29, however, was notably more intense, with students barricading themselves in a campus administrative building. In response, the university sent police in to forcefully remove them and 31 students, community members, and faculty were arrested.

Student organizers across the 23-campus system have taken different approaches to protests and occupations, but of those who have made demands, theirs are nearly identical: they all want university administrators to disclose any financial ties to Israel or Israeli companies and, if such financial ties exist, that the university divest from them.

How has CSU responded to protester demands?

On April 30, the CSU Office of the Chancellor said in a statement that it “does not intend to alter existing investment policies related to Israel or the Israel-Hamas conflict.”

“While the CSU affirms the right of our community members to express diverse viewpoints,” the statement read, “a divestment of this sort impinges on the academic freedom of our students and faculty and the unfettered exchange of ideas on our campuses.”

CSU’s investments are centrally managed on behalf of the system. As of March 31 it had an $8.3 billion portfolio. Money generated by those investments have been used to pay for building maintenance and renovations on campus.

That total does not include money the system receives from the state or is held by separate groups associated with individual campuses.

While the CSU system at large has no plans to divest, those auxiliary groups, such as the Cal Poly Humboldt Foundation and the Sonoma State University Foundation, could consider their own divestments.

The Sacramento Bee reached out to all of the CSU campuses and reviewed other statements they sent to students. On some campuses, such as Bakersfield and Channel Islands, students have not made any demands about disclosure and divestment. On others, such as Sonoma, San Francisco and Dominguez Hills, university administration has expressed willingness to meet with student activists who did make demands. The San Bernardino campus said it does not invest directly or indirectly with any Israeli companies, and Cal Poly San Luis Obispo said it does not intend to change its current investments.

The Bee’s review found that Cal Poly Humboldt has responded most thoroughly, outlining their position on each specific demand in a lengthy email sent to all students on April 26.

Humboldt’s foundation raises funds and manages the school’s investments.

Aileen Yoo, the school’s director of news and information, said in an emailed statement the university was willing “to have an open dialog” about its investment strategy.

What are Cal Poly Humboldt’s investments?

Student activists barricaded themselves in Siemens Hall on the Cal Poly Humboldt campus on April 22, and relayed their demands that same day, saying they would not leave the building until the university disclosed “all holdings and collaborations with Israel,” divest from companies and corporations complicit in the occupation of Palestine, cut ties with any Israeli universities, drop charges against students and “halt the harassment of student organizers by law enforcement,” call for a permanent ceasefire in Gaza, and change university policy that allows the university to call police on its own students.

In response to the disclosure demand, the university told students in the April 26 email alert, its endowment “does not include any direct investment in defense companies or any securities issued by Israeli companies or organizations, or to defense firms.”

“Because of the relatively small size of the endowment,” the statement read, “the investment strategy does not include direct investment in any specific companies or securities.”

The university acknowledged that its more than $51 million portfolio has money that is indirectly invested in companies through mutual funds, which are often bundles of stocks or other financial assets. It estimated that 1%, or roughly $510,000, of that portfolio is in areas “that are asked about.”

Beyond that, the university estimates that “potential defense investment” is likely less than .5% of the entire investment fund.

Even then, the university said that figure is probably smaller than that as some companies make components of wind turbines and planes, and not weapons.

“The portion of the indirect investment in Israeli companies or organizations is likewise less than 0.5%, and can fluctuate over time.”

Has Humboldt or CSU divested before?

While responding to the demands from protesters, Humboldt’s April 26 alert also boasted about the school’s status as a “higher education leader in environmentally and socially responsible investing.”

In 2013, Humboldt’s foundation, and students, came up with a plan to divest from fossil fuels. The university eventually eliminated the foundation’s direct investments in fossil fuels, according to its website, and was “leading the way” for institutions trying to divest from fossil fuels held in indirect ways, such as mutual funds.

Pressure from Humboldt and other campuses led to the CSU to take its own action on fossil fuels. In 2021, the system announced it would not pursue future investments in fossil fuels in the university’s portfolio, following a recommendation by an advisory committee.

That decision affected the system-wide investments but not the auxiliary funds associated with individual campuses. It is also separate from CalPERS, which is the pension plan for state employees.

A CSU communications official declined to answer an emailed question Friday about why it did not seek to divest money in this case.

How does CSU compare to UC?

CSUs are not the only universities in California where students have protested and occupied campus buildings, creating difficult decisions for major donors and administrators.

Students at the University of California, which operates 10 campuses across the state, have made similar demands to those in the CSU system, and protests at those schools have become increasingly tense.

More than 200 people were arrested Thursday on the UCLA campus, where hundreds of students and faculty camped out in support of Palestine and supporters protected the encampment from police. At UC Berkeley the same day, protesters and counterprotesters clashed at the campus encampment, leaving three injured. UC San Diego administrators canceled a campus event last week after student organizers set up an encampment April 29, and UC Davis student organizers initiated an encampment in the quad Monday afternoon.

The University of California opposes calls for a boycott against and divestment from Israel, an April 26 statement from the UC Office of the President said. The statement also clarified that tuition funds, which are the primary source of the UC’s core operations, are not used for investment purposes.

University Investments manages the UC’s $169 billion portfolio, vastly dwarfing that of the CSU system. It also has much wealthier donors who the UC system is undoubtedly considering as it navigates the delicate situation on its campuses and in its investments.