Harvard University on April 17. Photo by Sophie Park/Getty Images

Contributing Columnist Dany Bahar April 18, 2025

Last week, Harvard University did something remarkable: It said “no” to the U.S. federal government.

It was a dramatic moment in the ongoing clash between elite universities and a federal government determined to reshape them in its political image. But Harvard’s decision also highlights a broader truth: The only reason the university could afford to take such a stand is because of its endowment. The very endowment that the pro-Palestinian on-campus student movement last spring tried to shrink.

Faced with a five-page list of sweeping demands from President Donald Trump’s administration — ranging from banning masks on campus to reshaping its admissions, faculty governance, and even curriculum — Harvard’s leadership drew a line. “The university will not surrender its independence or relinquish its constitutional rights,” wrote President Alan Garber. Within days, the government retaliated by freezing more than $2 billion in federal funding, with nearly $7 billion more hanging in the balance.

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There is no way that those cuts won’t deeply hurt Harvard, my own alma mater. But the university appears to have made the informed choice that it can weather that pain — perhaps in part because, at roughly $53 billion, Harvard’s endowment is the largest in American higher education.

If last spring’s protesters had succeeded, it’s possible that Harvard would have faced more complicated conversations about standing up to Trump. Because, under their demands, the financial firewall currently preserving the institution’s autonomy would have been less strong.

As it is, Harvard’s endowments — and those of other elite universities resisting Trump — have become the most effective tool universities have to defend the principles they hold dear, including the freedom to protest. Had some of the most vocal anti-Israeli campus activists succeeded in their long-running campaigns for divestment, those very endowments might not be strong enough to withstand the current political assault.

Of course, student movements aimed at divestment haven’t just been focused on Israel. Efforts to redirect university investing over the past several years, in the name of justice, have been organized in the name of all kinds of principles, from climate advocacy to racial justice.

But the protests targeting Israel last spring were by far the highest-profile event for the divestment movement in years, as student protesters across many campuses in the United States demanded that endowments cut ties with companies “associated with Israel.”

As I wrote at the time, it was highly unlikely that many, if any, university endowments had direct investments in Israeli firms. The real danger lay in the maximalist demands of some protesters who wanted endowments to divest from any firms that have any activity in Israel, period.

That would include most firms of the S&P500, which has resulted in enormous returns to investments over the past decades. Which means if those voices had been taken seriously, Harvard’s endowments, and those of its peers, would likely not be nearly as large as they are today.

I do not condone the fact that Harvard, and most other elite universities, have, since the devastating Hamas attack of Oct. 7, 2023, failed to adequately respond to the rise in antisemitic incidents on their campuses, and did not discipline those students who engaged in antisemitic behavior, as I demanded at the time. But I applaud Harvard’s ability to stand up to the federal government now. And while part of this stand comes from idealism, let’s be clear: It also comes from leverage. That leverage was earned, not through ideological purity, but through decades of pragmatic investment strategies — the very kind activists have often sought to disrupt.

The rapidity of this turnaround — from attacks on university endowments to an understanding of how essential they can be in protecting the liberty of independent institutions — should prompt the left to rethink what campus activism demands of universities. Would caving to a fringe of protesters asking for unreasonable divestment requests have been more important than having the resources to resist in a moment of democratic backsliding? I think the answer is clearly “no,” which should be a lesson for the future.

This isn’t to say that endowments should be above scrutiny. They shouldn’t. But, as former Harvard president Larry Summers has correctly argued, universities, as institutions of inquiry, should not have a unique, defined position on global affairs — which means that their endowments shouldn’t be a tool for political statements.

Had universities listened to last spring’s activists and gutted their endowments in pursuit of symbolic divestment, the story today, as they face off against Trump, might be turning out very different. The lesson is clear: Rejecting loud but wrong ideas — such as those advanced by sympathizers of the Boycott, Divestment and Sanctions movement — is helping universities today to fight the good fight, rather than succumb.

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