The governor’s office is asking public colleges and universities in Virginia to verify that their investments, including those tied to endowments and foundations, are free from social or political interests.
In a letter obtained by Cardinal News dated July 9, state education secretary Aimee Guidera and finance secretary Stephen Cummings said the state wants to ensure higher education institutions’ “commitment to invest in a manner that prioritizes risk-adjusted investment returns independent of social, political or ideological interests.”
The request stems from a conversation between Gov. Glenn Youngkin and the state Council of Presidents in March, according to the letter, which also cites “recent calls for colleges and universities to divest assets tied to Israel.”
The letter asks each institution to report by Aug. 15 whether the school, its foundation, its endowments or any outside investment managers have mandates or flexibility to consider non-financial investment factors.
Virginia colleges and universities have separate nonprofit foundations that raise money for the school by investing private donations and pursuing various business endeavors; Virginia Tech’s foundation owns the Hotel Roanoke and Conference Center, for example, while Radford University’s foundation recently opened a hotel near campus.
“The Governor called on our public colleges and universities to bring scrutiny and transparency to their endowment and foundation investment practices and to apply widely accepted investment principles currently used by other Commonwealth agencies,” press secretary Christian Martinez said by email Thursday.
“The Governor remains focused on ensuring our taxpayer-supported institutions invest independent of politics to protect the financial interests of our public institutions and their recognition as the best in the nation.”
Martinez did not answer a question about whether there were specific concerns about any state university’s investment activities.
When asked to point to state code that addresses management of universities’ private foundations, Martinez responded, “The Governor believes that investment decisions impacting our taxpayer-supported institutions of higher education, including those made by an institution’s related foundations, must be objective and independent of political agendas.”
The letter to universities uses the state retirement system’s investment policy as a model for universities to follow, and notes that Virginia code requires the retirement system to meet its fiduciary duty through determining financial risk without putting investments “through a ‘social screen’” that considers political, environmental or climate factors.
Jeanne Chenault, spokesperson for Virginia Retirement System, said the independent agency oversees investments related only to the VRS Trust Fund. VRS didn’t initiate the July 9 letter, but Chenault said in a statement that the agency did review it “for factual accuracy as it relates to VRS investments.”
The letter asks each college or university to describe how its investment policies vary from the retirement system’s and what voting methodology is in place.
A Virginia Tech spokesperson didn’t have information available Wednesday when asked if similar requests had been made previously, and several community colleges declined to comment on the letter.
“This is another case of the administration dipping its political toe into higher education where it shouldn’t be,” Sen. Mamie Locke, D-Hampton and chair of the Senate higher education subcommittee, said Thursday.
She said she wasn’t aware of the letter until she was asked about it by Cardinal News.
Locke, a retired Hampton University political science professor, said that while endowments are typically aligned with a university’s goals for education and research, they’re often also tied to strict specifications from donors regarding how those donations are invested and spent.
She said she doesn’t see how the state retirement system’s investment policies could be applied to education endowments and foundations. “They have separate purposes which have been established. You can’t make them one and the same.”
She later added: “You can’t make the square peg fit into that round hole.”
Pro-Palestinian campus protests on college campuses around the country have called for schools to divest from Israeli investments after terrorist attacks by Hamas in Israel set off months of ongoing violence in Gaza. It was one of the demands made by participants at an encampment at Virginia Tech in late April, which ended after three days with 82 arrests.
That same weekend, 12 people were arrested at a similar protest at the University of Mary Washington, and 13 were arrested at Virginia Commonwealth University. The following weekend, 25 people were arrested at University of Virginia after protestors refused to remove tents from campus.
Though protesters have brought attention to their cause, they have not had much success in pursuing divestment by Virginia universities.
[Read more: Pro-Palestinian demonstrators say Israeli drones use Virginia Tech hardware. Public documents don’t support that claim.]
After a group of protesters interrupted a board of visitors meeting at Virginia Tech in early April, President Tim Sands said that while the university supports free expression, it must “maintain a position of neutrality.”
At UVa, students passed a referendum in February calling for the board of visitors to divest from Israel. But Attorney General Jason Miyares condemned the demand, asking the board to reject the “misguided attempt by the UVA student body to undermine the legitimacy of Israel.”
“I don’t believe the University should use its investment strategy to weigh in on one side of such a complex and deeply contested set of issues,” President Jim Ryan told the board of visitors at a meeting shortly after the vote, according to reporting in The Cavalier Daily, the university’s student newspaper.
Students at private universities have had slightly better success persuading their institutions to examine their investments. At Brown University in Rhode Island, board members will vote in October about whether to divest. After a weeklong encampment at Columbia University in New York City, President Minouche Shafik said Columbia would expedite review of student proposals to the school’s advisory committee for socially responsible investing.
Thirty-eight states now have laws that ban boycotts against Israel or other measures that discourage boycotts.
Virginia is not among them.
In 2016, Virginia’s General Assembly adopted a resolution to condemn the Boycott, Divestment and Sanctions movement. Its chief patron was Miyares, who was a delegate representing a district in Virginia Beach at the time.
In 2022, then-Del. (now state Sen.) John McGuire proposed a bill that would prohibit a boycott of Israel via the state’s public procurement rules, but it never made it out of committee.
