The Harvard Law Record Op-ed: “Top Five Myths About Prison Divestment”

Myth #4: Divestment would significantly damage the endowment’s profitability.

The Facts: In recent years, national media has covered how Harvard’s endowment returns have lagged behind its peers like Columbia, MIT, and Notre Dame. One might think that this vulnerable period would make divestment untenable in the short term.

But the evidence suggests otherwise. In 2015, Columbia became the first institute of higher education to divest from private prisons with University of California quickly following suit. In the three years following divestment, Columbia’s endowment posted an average annual return of 7.3%, while the UC systems posted 8.8% average annual return. In contrast, Harvard’s endowment posted an average annual return of 5.3% over the same period. This suggests that divestment does not significantly damage endowments’ profitability and that Harvard’s investments in prisons do not give it a significant competitive advantage.