May 15, 2014; The Oregonian
While convincing foundations and universities to divest their tax-exempt assets from investments in fossil fuel companies is the big divestment campaign news of the moment, and there is still a campaign calling for divestment from companies that do business in the Israeli-occupied West Bank, divestment as a political tool is alive and well addressing other controversial issues in our economy. Two have made the headlines recently:
- The City of Portland, Oregon just last week began a process of divesting itself from Wal-Mart company stocks and bonds. As part of the city’s socially responsible investment strategy, the city dropped 25 percent of its Wal-Mart investments immediately and plans to be fully divested from Wal-Mart by 2016. Swedish and Dutch investment funds have also recently divested from Wal-Mart due to the company’s anti-union position and other labor practices.
- There is an active campaign involving organizations typically connected to organizing low-wage workers aimed at getting foundations and others to divest from private prison operators. Among the targets are the Bill & Melinda Gates Foundation and private prison operators such as the Corrections Corporation of America and the GEO Group. The Gates Foundation responded to a protest led by the Latino advocacy group Presente.org in support of prisoners engaged in a hunger strike at the GEO-operated Northwest Detention Center by saying that the positive value of its grantmaking far outweighs its investments in operators of private prisons. The foundation also contends that it somehow doesn’t actually control its own investments, which are directed by the Bill & Melinda Gates Foundation Asset Trust, which operates separately from the foundation.
The prison divestment efforts may be as interesting as any, in part because there is a significant connection of the campaign to a broader policy issue. The campaign appears to have been started a few years ago by a group called Enlace, which argues in part that anti-immigrant laws such as Arizona’s SB1070 and Georgia’s HB87 are connected to the financial interests of private prison operators that “have influenced politicians to pass laws that criminalize communities of color to increase the prison population for more profit.” Throughout Enlace’s website material is the group’s insistent argument that these private prison firms are powerful advocates for and beneficiaries of policies Enlace describes as “inhumane and excessive immigration enforcement policies.”
Unlike some organizing efforts that make it difficult to figure out exactly who’s leading and supporting the campaign, Enlace’s website puts everything out there, including its financials, its major foundation funders (including the Ford Foundation, the Akonadi Foundation, the Ben and Jerry’s Foundation, the Liberty Hill Foundation, the Needmor Foundation, the New World Foundation, and the Public Welfare Foundation, among others), and the organizational members of the Private Prison Divestment Campaign steering committee (including, in addition to Color of Change, the Detention Watch Network, Dream Defenders, the National Day Laborer Organizing Network, National People’s Action, and the Service Employees International Union). The diversity of groups and funders shows the differences between this campaign and that of fossil fuels divestment, the latter appearing somewhat more connected to and propelled by student activists.
There will always be pushback against divestment campaigns. After the Portland City Council decision on Wal-Mart, the Oregonian editorialized that the still-emerging dimensions of Portland’s social investment strategy beyond Wal-Mart would only “stoke the anti-corporation flames that already burn brightly in Portland.” In this case, though, the Oregonian might have it wrong. If the city council of Portland articulates its criteria for investing in some corporations and divesting in others, that is exactly what an investor can and should do with the deployment of investment assets. If the city believes that Wal-Mart’s anti-union stance is abhorrent and its low-wage policies contribute to the expansion of the working poor, the city ought to take action, though not solely against Wal-Mart while giving a pass to other anti-union low-wage corporate employers. There are plenty that do not stand in the way of unions or drag employees to the bottom of the legal pay scales. If investors invest or withdraw from companies connected to the private prison industry, that, too, is legitimate so long as the investors aren’t singling out one or two of the industry’s stalwarts and ignoring others.
Divestment need not be an anti-corporate strategy at all. It is a pro-values strategy. But it demands that the institutions of our society that purport to be mission- and value-driven, such as private foundations, cannot stand on the sidelines with their billions in tax exempt assets and assume that their five percent devoted to philanthropic output automatically outweighs and camouflages the impacts of the investment of their 95 percent.—Rick Cohen