LAST JUNE, COLUMBIA UNIVERSITY sold all of its shares in the Corrections Corporation of America, the largest private prison corporation in the country, and in G4S, the world’s largest private security firm. In doing so, Columbia became the first U.S. university to completely divest from the $74 billion prison industry.
Though the total amount Columbia divested, roughly $10 million, was not a major financial loss for either company, it was an important win for the students who had been pressuring the university to divest since 2013. “We work in the context of a bigger movement that seeks to break down the notion that prisons and police can solve our problems,” said Asha Rosa, a student organizer with Columbia Prison Divest, part of Students Against Mass Incarceration at the university. “We aim to create a world where people understand that investing in something like a prison is a socially toxic investment.”
Other universities and nonprofits followed suit: In December 2015, the California Endowment—a private, statewide foundation that focuses on health and justice for all Californians—announced it will no longer make direct investments in companies profiting from for-profit prisons, jails, and detention centers. A few weeks later, the University of California divested $25 million. And similar student-led divestment campaigns are underway at universities around the country, including UC Berkeley, Brown, Cornell, and the City University of New York.
For many organizations, the decision to divest from the prison industry is rooted in the organization’s own mission. Divesting is about not wanting to invest “in anything that hurts the people we are trying to support,” explained Maria Jobin-Leeds, a board member of the Schott Foundation and the Access Strategies Fund, two foundations committed to improving the lives of underserved communities, including communities of color. And given the disproportionate impact that mass incarceration has on people of color—in a 2015 speech, President Obama cited a “growing body of research” that shows people of color are more likely than whites to be arrested and more likely to be sentenced for similar crimes—both foundations decided to divest. “Companies that profit from prisons make money off the poorest and are supported by a deeply racist system,” said Jobin-Leeds. “We do not want to make money off this system.”
Profiteers and private prisons
But despite this conviction that divesting was the right move, Jobin-Leeds and her fellow board members realized it wasn’t easy to determine which investments were connected to the prison industry. One reason this was difficult was because of the overall lack of transparency within the prison industry. So while an investor could reasonably deduce that the Corrections Corporation of America manages prisons, she wouldn’t necessarily know that the CCA—like many private prison management companies—has a financial incentive to keep more people in prisons. Which it does: According to a 2013 report, 65 percent of private prison contracts with state prisons regularly stipulate occupancy quotas requiring the state to make payments for empty cells—a de-facto “low-crime tax.”