Despite socially responsible investing movements led by faculty and students at schools around the country, decisions to invest in certain companies are often determined not by the degree of activism on campus, but by a college's status as a public or private institution.
A number of prominent state higher education systems, including New Hampshire and North Carolina, have bylaws stipulating that university endowments be invested to maximize profits without regard to companies' social or political policies.
Most private universities, by contrast, have the flexibility to examine investment decisions on a case-by-case basis.
"We don't have a socially responsible investment agenda per se," said Mark Yusko, of the UNC Management Company, the organization that handles investments for the North Carolina's higher education system. "Our policy is preservation of capital first and growth of capital second."
The university system of New Hampshire employs a similar strategy, citing an obligation to the state's citizens to pursue responsible long-term financial strategies rather than ones that reflect a particular social or political stance.
"As a public body with an obligation to the citizens of the state who may have varied views... our practice has been over the last decade to take the posture that we want to maximize the returns of our endowment," Vice Chancellor of the University System of New Hampshire Ed McKay said.
"Our analysis has been that if we restrict the universe of funds and/or specific companies we invest in, we are potentially reducing our returns on those funds," he added.
The policy, which has been in effect for over a decade, is based on the organization's mission statement as well as on the charter issued by the state of New Hampshire, McKay said.
But in states such as Michigan, the boards of Regents chose to structure their bylaws so investments can reflect reigning political or social concerns on campus.
Under the Michigan constitution of 1963, the University of Michigan's Board of Regents --whose members are elected in biannual statewide elections -- has the authority to determine how the institution's funds are invested.
The regents do not often decide to limit the companies they invest in, but they sometimes do so if they think the decision would reflect a widespread sentiment on campus, Board of Regents member Olivia Maynard said.
"It has to be a compelling public interest that makes a major impact on the community on Michigan and on the country," Maynard explained.
Michigan recently decided to divest in tobacco companies.
"This decision was to make a public statement on the impact of tobacco on the public health," Maynard said, adding that, to her knowledge, the University of Michigan's tobacco divestment has not negatively affected returns on the university's endowment.
But a five-year study by the university system of New Hampshire found that not investing in companies that do business in South African cost nearly $2.3 million.
This finding caused New Hampshire to shift its policy in 1991 to one that aims to maximize investment profits, McKay said, adding that he does not regret the decision.
"If we would have stayed in South African Free we would have $100,000 less per year to distribute in scholarships," McKay said.
Such discrepancies between states are largely possible because most state education systems enjoy a large degree of autonomy from the state legislature, state education officials explained.
Also, because endowments come from private contributions rather than state funds, Boards of Regents like those at the University of Michigan's are often free to determine for themselves whether they prefer to invest for maximum returns or based on other more subjective criteria.
"It's a very institution specific issue," Yusko said. "And it's a very individual specific issue . . . it really depends on the individuals involved in the board."
But officials stressed that all policy decisions about investment need to be carefully thought out for what the endowment management organizaing best for the needs of the university.
"It's not something to be taken lightly. It's something you need to think about and study both individually as a regent and as a board," Maynard said.
Moreover, without a strong campus movement to push for a change in investment policy, change is unlikely to occur, the investment officers added.