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Written by: John Gilfeather
My bio says that I attended Columbia University for graduate studies.
This is true.
I spent a semester at Teachers College, had a solid 3.0 GPA and wrote what might have been at the time the definitive paper on Prudence Crandall. (You can look her up.)
It seems I still am considered part of the Columbia family because for the past several years they have been sending me fundraising letters.
So I read with great interest that Columbia has divested itself of all investments in for-profit prisons. This is smart.
First, from an investment standpoint, there is a growing movement to let people with minor non-violent offenses out of prison.
Plus the legalization/non-criminalization of marijuana and lighter treatment of quality of life crimes will mean fewer incarcerations going forward.
Accordingly, there will be fewer inmates for for-profit prisons, making them less attractive investments. These changes may be slow, but momentum is building.
Second, there is a principle called borrowed equity.
Organizations can be helped or harmed by the company they keep.
Just like your mom did not want you associating with the bad crowd (in my day, they were labeled juvenile delinquents), so too organizations should not be associating with endorsers or entities whose bad reputation might rub off on them.
Now, I’m sure there are some fine people working for for-profit prisons. But there are definitely some bad apples. Off the top of my head, I can recall stories of corruption and grossly unfair practices in Pennsylvania, Louisiana and New Jersey.
So, good job, Columbia – you chose the right side on the basis of investment smarts and reputation equity. Let other universities follow suit.
And keep in touch. But don’t hold your breath on getting a check. Your $8 billion endowment seems plenty healthy.