| Category | Term | Definition | Why It Matters | Example | Limitations & Gaps |
|---|---|---|---|---|---|
| Asset Class (Alternatives) | Non-Marketable Alternative Investments (NAIs) | Illiquid holdings that cannot be easily traded or priced, such as private equity, VC, hedge funds, and private real assets. | Almost all conflict-linked PE/VC exposures fall under NAIs, hidden from public view and rarely itemized. | A university categorizes its Israeli defense-tech VC fund as an NAI. | NAIs are opaque by design; audited statements group them into a single number. |
| Asset Class (Private Markets) | Private Equity (PE) | Investments in private companies or buyouts of public companies, typically aimed at operational improvements and resale. | PE often owns cybersecurity, logistics, weapons-adjacent, or border-technology firms used in conflict zones. | A PE fund acquires a company providing software to the Israeli military. | PE disclosure is minimal; students rarely see underlying companies without inside access. |
| Asset Class (Real Assets) | Real Assets | Physical or infrastructure-based investments such as real estate, commodities, and energy assets. | Some real-asset funds hold infrastructure in occupied territories or extractive assets linked to conflict financing. | A real-assets fund owns logistics infrastructure serving military zones. | Disclosures often lack geographic specificity, masking high-risk regions. |
| Economic / Global Investment | Foreign Direct Investment (FDI) | Investment made by an institution or company into operations, assets, or equity located in another country. | Universities investing in foreign VC/PE may inadvertently support companies embedded in conflict-zone economies. | An endowment invests in an Israeli innovation fund that finances dual-use drone companies. | FDI classification does not distinguish between peaceful commerce and conflict-linked sectors. |
| Endowment | Endowment | The long‑term investment pool meant to support a university’s mission, typically invested with a multi‑decade horizon. | Endowments are often LPs in PE/VC funds, meaning university capital can flow into companies tied to war, surveillance, or occupation. | A $5B endowment allocates 10% to PE/VC funds, some of which back drone and AI surveillance companies used in Gaza. | Governance and holdings are usually opaque. Students rarely see a complete list of funds or companies. |
| Endowment | Quasi‑Endowment (Board‑Designated Endowment) | Funds the board chooses to treat like an endowment but can re‑designate or spend if needed. | Quasi‑endowments may be invested alongside the core endowment but are sometimes easier to reallocate or divest from. | A university designates a $100M surplus as a quasi‑endowment and puts it into a global private equity strategy. | Labels can obscure what’s truly permanent vs. flexible. Both pools can still hold complicit PE/VC exposure. |
| Endowment | Investment Policy Statement (IPS) | Formal document setting investment objectives, risk tolerance, asset allocation ranges, and sometimes ethical guidelines. | Key lever for reform. If human‑rights criteria are written into the IPS, they become part of fiduciary expectations and manager selection. | The IPS allows up to 25% in illiquid alternatives but says nothing about avoiding companies implicated in war crimes. | Language is often broad and vague, giving wide discretion unless ethical criteria are explicitly included. |
| Endowment | Spending Rule / Spending Policy | Formula determining what percentage of the endowment is paid out each year (e.g., 4–5% of a multi‑year average). | High spending demands can be used to justify aggressive, higher‑risk investments—including conflict‑linked PE/VC strategies. | A 5% spending rule pushes the investment office toward high‑yield PE funds that own arms and surveillance companies. | Focuses on financial sustainability, not the ethics of how returns are generated. |
| Endowment | Alternative Investments | Catch‑all term for non‑traditional assets, including private equity, venture capital, hedge funds, private real estate, and infrastructure. | This is where much of the opaque, high‑risk, and conflict‑linked exposure lives in university portfolios. | A university reports that 30% of its endowment is in “Alternatives,” including PE funds backing defense and security tech. | Reporting tends to lump ethical climate funds and genocide‑linked defense funds together, making scrutiny difficult. |
| Endowment | Investment Consultant | Firm hired to advise on asset allocation, manager selection, and performance for institutional investors. | Consultants strongly influence which PE/VC managers universities use, shaping exposure to conflict‑linked funds. | A consultant repeatedly recommends defense‑heavy managers to several university clients. | Reports and fee arrangements are private; potential conflicts of interest or biases are rarely visible to students. |
| Endowment | Investment Committee | Group of trustees and sometimes external experts that oversees the endowment’s investment policy and major decisions. | This is the key decision‑making body students must persuade to change managers, adopt exclusions, or shift capital. | The committee approves a new allocation to a VC fund specializing in border‑security AI. | Meetings and minutes are typically closed. Membership often lacks human‑rights or conflict‑risk expertise. |
| Endowment | Commitment Pacing Plan | Schedule of planned future commitments to private funds to maintain target allocations over time. | Determines which funds will receive future university capital—either locking in complicity or enabling a pivot to cleaner strategies. | The pacing plan calls for $50M per year into PE/VC, including mandates focused on “Israel innovation.” | Usually internal and confidential; students rarely see or challenge it, even though it shapes future exposure. |
| Endowment / Fund Accounting | Donor-Restricted Funds | Funds whose use is restricted by donors for particular purposes or time periods. | These funds may also be invested in PE/VC; restrictions affect spending, not investment choices. | A donor-restricted scholarship fund is invested in a VC portfolio that includes a surveillance startup. | Restrictions usually apply to fund use, not to ethical oversight of investments. |
| Endowment / Governance | OCIO (Outsourced Chief Investment Officer) | A firm hired to manage all or most of an institution’s investments, acting as a de facto chief investment officer. | OCIOs often choose PE/VC and hedge-fund managers on behalf of universities, meaning crucial decisions about conflict-linked exposure are outsourced. | A university signs an OCIO mandate and the OCIO allocates part of the endowment to a VC fund backing Israeli defense-tech startups. | OCIO contracts are private and decision processes are opaque; trustees and students may not know which funds or companies the OCIO is selecting. |
| Endowment / Governance | Foundation vs. Endowment | The endowment is the pool of invested assets; the foundation is the legal entity that may hold and manage those assets on behalf of the university. | Understanding whether assets sit in the university itself or a legally distinct foundation is key when analyzing Form 990s and governance responsibility. | A university foundation, not the university proper, appears on the Form 990 as the LP in several PE funds. | Separating the foundation and endowment can be used to deflect responsibility or complicate accountability for investment decisions. |
| Endowment / Governance | Spending Rate / Distribution Policy | The rule that determines how much of the endowment is paid out each year, often a fixed percentage of a multi‑year average market value. | High spending needs can be used to justify riskier, higher‑return strategies, including PE/VC funds with conflict‑linked companies. | A 5% spending rate pushes the investment office toward higher‑yield PE funds that include surveillance and weapons companies. | Focuses on financial sustainability, not on whether the underlying returns are generated through human‑rights abuses or conflict economies. |
| Endowment / Operations | Unitization | A method of treating the endowment like a pooled investment fund with 'units' allocated to different donors or purposes. | Helps explain to donors how their specific fund participates in the overall portfolio, including exposure to alternatives like PE/VC. | A donor scholarship fund holds 1,000 'units' of the pooled endowment, which includes commitments to defense‑linked private funds. | Unitization makes tracking administratively easier but does not by itself improve transparency around specific managers or companies. |
| Endowment / Operations | Custodian Bank | A financial institution that holds an institution’s securities, cash, and other financial assets for safekeeping and settlement. | Custodians are key data hubs; they see all trades, fund positions, and cash flows, which could support better transparency if leveraged. | A custodian bank processes capital calls and distributions for the university’s commitments to Israeli innovation funds. | Custodians usually follow instructions rather than shape policy; their detailed records are rarely shared with students or the public. |
| Endowment / Portfolio | Asset Allocation | The proportion of the portfolio invested in different asset classes such as public equity, fixed income, real assets, and alternatives. | Shows how much of the endowment is exposed to opaque and illiquid strategies like PE/VC where conflict‑linked companies often sit. | An asset‑allocation table shows 30% of the endowment in 'Alternatives', including private equity, venture capital, and hedge funds. | High‑level categories hide important distinctions; ethical climate funds and genocide‑linked defense funds may appear in the same bucket. |
| Endowment / Portfolio | Rebalancing | Adjusting the portfolio back toward its target asset‑allocation weights when market movements cause drifts. | Rebalancing determines whether an endowment sells down public defense stocks or instead trims other holdings and leaves those exposures intact. | After a rally in weapons stocks, a rebalancing decision either locks in gains by selling or leaves the overweight defense position in place. | Rebalancing policies are rarely disclosed in detail and generally ignore ethical considerations unless specifically written into guidelines. |
| Endowment / Risk | Liquidity Constraints | Limits on how much of the portfolio can be invested in illiquid assets such as PE/VC funds or closed‑end real‑asset funds. | High allocations to illiquid PE/VC can make real‑time divestment from complicit funds difficult, locking institutions into long‑term exposure. | An endowment with 50% in illiquid alternatives argues it cannot exit a problematic VC fund for several years. | Liquidity limits are often invoked to resist divestment, even though institutions can still halt new commitments or explore secondary sales. |
| ESG / Ethics | Greenwashing / SDG-Washing | The practice of exaggerating or misrepresenting environmental, social, or 'Sustainable Development Goals' credentials to appear more responsible than reality. | Common in funds that market ESG or impact while still investing in conflict‑linked or rights‑abusing companies. | A VC fund highlights its 'SDG alignment' while backing surveillance platforms used in mass repression. | Hard to police; labels and marketing claims may not be verified by independent audits or matched by portfolio changes. |
| ESG / Ethics | Sustainability-Linked Finance | Loans or bonds whose terms (such as interest rates) are linked to the borrower meeting certain sustainability or ESG targets. | Can incentivize better behavior, but metrics chosen may ignore human‑rights harms or conflict involvement. | A company issues a sustainability‑linked bond tied to emissions targets, while expanding sales of weapons to conflict zones. | Targets can be weak, narrow, or easily met; frameworks often omit human‑rights or conflict metrics entirely. |
| ESG / Ethics | Double Materiality | Concept (prominent in the EU) that looks at both how sustainability issues affect a company financially and how the company affects people and the environment. | Supports the argument that human‑rights harms matter even before they show up as financial losses. | An investor assesses both the risk that conflict exposure poses to a company and the harm the company’s products cause in Gaza. | Still emerging outside the EU; many investors focus only on financial materiality and ignore outward impacts. |
| ESG / Human Rights | Human Rights Impact Assessment (HRIA) | A structured process to identify, analyze, and evaluate the human‑rights impacts of a project, company, or investment. | Provides a deeper, rights‑focused evaluation than generic ESG scoring, especially critical in conflict‑affected areas. | Before investing, an institution commissions an HRIA on a surveillance‑tech firm with operations in occupied territories. | HRIAs can be expensive, time‑consuming, and resisted by managers; quality varies depending on who conducts them. |
| ESG / Investment Strategy | ESG Integration | Incorporating environmental, social, and governance factors into investment analysis and decisions. | Many managers claim ESG integration while still holding companies actively complicit in occupation or war; this gap is crucial to expose. | A manager markets ESG credentials yet invests in surveillance platforms used to control civilian populations. | ESG is weakly standardized. 'Integration' doesn’t guarantee exclusions or real accountability. |
| Fiduciary Duty | ERISA (Employee Retirement Income Security Act) | U.S. law setting fiduciary standards for private retirement plans, emphasizing prudence, loyalty, and diversification. | Even when not binding on endowments, ERISA is cited as a model of 'prudent' investing that can include human‑rights risks. | Trustees reference ERISA‑style duties when arguing they must seek “best risk‑adjusted returns.” | The text does not explicitly mention human rights; advocates must connect conflict exposure to financial and legal risk. |
| Fiduciary Duty | UPMIFA (Uniform Prudent Management of Institutional Funds Act) | Model law in most U.S. states governing how nonprofits manage and invest institutional funds. | Requires consideration of the institution’s charitable purposes—students can argue genocide‑linked investments contradict the mission. | Campaigners cite UPMIFA to argue that investing in companies implicated in war crimes conflicts with the university’s values. | Language is broad and interpretations vary. Many boards apply it narrowly to financial metrics unless pushed. |
| Fiduciary Duty | Duty of Loyalty | Obligation of fiduciaries to act solely in the interest of beneficiaries and avoid conflicts of interest or self‑dealing. | Can be invoked when trustees favor relationships with managers, donors, or their own networks over beneficiaries’ interest in lawful, rights‑respecting investments. | A trustee with ties to a defense‑backed VC fund lobbies for a commitment despite clear ethical concerns. | Usually enforced only against blatant self‑dealing; more subtle conflicts and political loyalties can go unchallenged. |
| Fiduciary Duty | Duty of Prudence | Obligation to act with the care, skill, and diligence that a prudent person would use under similar circumstances. | Supports the argument that ignoring sanctions, litigation, or genocide‑related risks is imprudent, not neutral. | Trustees continue investing in blacklisted companies even after regulators flag potential sanctions exposure. | Traditionally interpreted through a narrow financial lens; human‑rights harms are often dismissed as 'non‑financial' unless explicitly linked to returns. |
| Fiduciary Duty | Materiality (Financial) | A fact is financially 'material' if a reasonable investor would consider it important when making decisions. | Helps argue that involvement in war crimes or genocide is material because it drives sanctions, lawsuits, and reputational damage. | A company’s role in unlawful attacks is revealed, leading to contract cancellations and a sharp drop in valuation. | Companies and managers often define materiality narrowly and may downplay human‑rights risks until damage is visible. |
| Fiduciary Duty | Duty of Care | Obligation of fiduciaries to act with the care, skill, and diligence that a reasonably prudent person would use in similar circumstances. | Supports arguments that trustees must understand and evaluate human‑rights, sanctions, and legal risks associated with investments. | An investment committee reviews only headline performance and ignores documented genocide‑related risks in a PE fund’s portfolio. | Often interpreted narrowly as reviewing financial metrics and manager slide decks, rather than seeking independent human‑rights analysis. |
| Fiduciary Duty | Prudence Standard | Legal expectation that investments be made with prudence, considering risk, return, diversification, and long‑term objectives. | Campaigns can argue that investing in companies exposed to war‑crime allegations or sanctions is imprudent given foreseeable downside risk. | Trustees defend a defense‑heavy portfolio by citing historical returns while ignoring growing sanctions and litigation exposure. | Frequently framed as purely financial; non‑financial harms are dismissed unless explicitly tied to future returns. |
| Fiduciary Duty / Risk | Material Risk | A risk is 'material' if a reasonable investor would consider it important in decision‑making, including when it may affect value or cash flows. | Genocide, war crimes, and sanctions exposure can clearly be material as they may trigger fines, exclusions, boycotts, or contract losses. | A company’s role in unlawful attacks is revealed, leading to contract cancellations and a sharp drop in its share price. | Companies and managers may define materiality narrowly and under‑report human‑rights risks until after damage is done. |
| Fiduciary Duty / Risk | Sustainability Risk | Financial risk arising from environmental, social, or governance issues that can affect long‑term value, including conflict and human‑rights abuses. | Helps link human‑rights harms to mainstream risk language that fiduciaries already recognize as relevant. | Investments in companies facing ongoing human‑rights investigations create sustainability risk for the portfolio. | Concept can be watered down or treated as marketing; some managers rebrand almost any issue as 'sustainability' without changing behavior. |
| Fiduciary Duty / Stewardship | Proxy Voting | The practice of shareholders voting on corporate matters such as board elections and shareholder resolutions using proxy ballots. | One of the few tools public‑equity investors have to push companies on human‑rights policies, arms sales, and surveillance practices. | An asset manager votes in favor of a shareholder resolution asking a defense company to report on human‑rights risks. | Proxy voting is irrelevant for most PE/VC holdings and may be under‑utilized or delegated to managers with weak human‑rights stances. |
| Fiduciary Duty / Stewardship | Shareholder Engagement | Direct dialogue with companies by investors to encourage changes in policy, disclosure, or behavior. | Frequently cited as an alternative to divestment, but its effectiveness is limited when investors are small or when companies are privately held. | An investor coalition meets with a tech company to raise concerns about its role in surveillance of civilians. | Engagement can be used as a stalling tactic; many PE/VC structures offer little meaningful leverage for outside investors. |
| Financial Instrument | Derivatives | Contracts whose value derives from underlying assets such as stocks, interest rates, or commodities (e.g., swaps, futures). | Can magnify exposure to defense companies or conflict-related volatility through leveraged bets. | A hedge fund uses derivatives to create synthetic exposure to an arms manufacturer. | Derivative exposures are often hidden from 13F filings; disclosure is limited. |
| Fund Lifecycle / Private Markets | Vintage Year | The year a private equity or venture capital fund begins investing; used to compare similar funds. | Vintage determines exposure to geopolitical periods (e.g., post-Oct 2023 Israeli defense boom). | A 2024 VC vintage shows surging investment in Israeli military-adjacent startups. | Vintage does not reveal underlying ethical or conflict risks. |
| Governance | ERISA | U.S. law requiring pension fiduciaries to act prudently and solely in beneficiary interests. | Human-rights and sanctions exposure can be material under ERISA. | A pension evaluates dual-use exposure for prudence. | Does not explicitly address human rights. |
| Governance | UPMIFA | U.S. law guiding endowments to manage assets prudently and align with mission. | Endowments must evaluate risks linked to human rights. | University reviews investment-policy language. | Does not mandate disclosure of private-fund holdings. |
| Governance | OECD Guidelines | Global framework requiring responsible business conduct and due diligence. | Applies to institutional investors assessing human-rights exposure. | Pension conducts due diligence on cyber firm. | Nonbinding; depends on voluntary compliance. |
| Governance | UNGPs | Global principles requiring businesses and investors to prevent human-rights harm. | Applies directly to investors and financial institutions. | Foundation screens funds for conflict-linked tech. | Many VC firms ignore UNGP responsibilities. |
| Governance | Material risk | A risk significant enough to affect financial decisions. | Human-rights violations increasingly qualify as material. | Drone firm faces export scrutiny. | Materiality assessments inconsistent in private markets. |
| Governance | Duty of care / Prudence | Requires fiduciaries to act with care, diligence, and skill. | Ignoring conflict exposure may breach fiduciary duties. | Pension strengthens due diligence after risk alerts. | Rarely defined to include human rights explicitly. |
| Governance | Duty of loyalty | Requires fiduciaries to act solely in beneficiaries’ interests. | Conflicts arise if investment advisors prioritize relationships over ethics. | Trustees question reinvestment in defense-tech VC. | Conflict disclosures minimal in private markets. |
| Human Rights | Sanctions List / Arms Embargo | Official lists identifying entities or countries subject to economic sanctions or restrictions on arms transfers. | Investing in sanctioned actors can create direct legal risk for universities; even near‑miss exposure is a warning sign. | A portfolio company is added to a sanctions list for supplying weapons to a sanctioned regime. | Sanctions regimes are incomplete and political; many complicit companies are never listed. |
| Human Rights | Mission‑Related Investment (MRI) / Impact Investment | Investments made with the intention to generate both financial return and mission‑aligned social or environmental impact. | Provides a counter‑model to complicit investments; students can argue for reallocating capital into MRIs consistent with the university’s stated values. | A university invests in a fund that finances renewable energy and community infrastructure rather than arms suppliers. | “Impact” claims can be weak or unverified; some MRIs still have exposure to harmful supply chains. |
| Human Rights | Divestment | Process of selling or avoiding investments in specific companies, sectors, or regions due to ethical, legal, or financial concerns. | Central tactic for student and community campaigns seeking to end university complicity in war, apartheid, or genocide. | A university phases out holdings in companies supplying weapons to a military engaged in grave human‑rights violations. | Institutions may adopt narrow or symbolic divestment while leaving the bulk of complicit PE/VC exposure untouched. |
| Human Rights / Conflict Risk | Conflict‑Affected and High‑Risk Areas (CAHRAs) | Regions experiencing conflict, serious repression, or systemic human‑rights abuses where doing business carries elevated risk. | Helps frame places like Gaza and the West Bank as zones requiring enhanced due diligence or non‑investment. | An investor labels some regions CAHRAs but fails to recognize Gaza as such despite UN genocide warnings. | Designations can be selective and politicized; companies and managers may under‑label areas to preserve business. |
| Human Rights / Conflict Risk | Dual‑Use Technology | Technology that can serve both civilian purposes and military or security uses. | Many VC‑backed AI, drone, and cyber tools marketed as “dual‑use” end up central to surveillance and targeting in conflict zones. | A drone platform advertised for agriculture is used for reconnaissance and targeting in Gaza. | The 'dual‑use' label can obscure a company’s dependence on military contracts and downplay harms. |
| Human Rights / Conflict Risk | Operational Involvement | A company’s direct participation in or support for military, security, or law‑enforcement operations on the ground. | Helps distinguish companies providing generalized technology from those actively enabling specific operations in Gaza or other conflict zones. | A drone company operates its systems in coordination with military units conducting strikes in Gaza. | Operational involvement can be under‑reported; companies may frame their role as 'support' or 'testing' rather than direct participation. |
| Human Rights / Conflict Risk | Beneficial Use | The real‑world ways a product or technology is actually used, as opposed to how it is marketed or described on paper. | Even if a tool is marketed as 'dual‑use' or 'civilian,' its beneficial use may be primarily surveillance, targeting, or repression. | A facial‑recognition system sold as 'border security' is used to track and control civilian movement in a besieged area. | Vague marketing language can obscure harmful uses; investors often stop at the brochure instead of tracing actual deployment. |
| Human Rights / Conflict Risk | Conflict Minerals / Supply-Chain Risk | Raw materials sourced from regions of conflict or severe human‑rights abuse, and the broader risk that supply chains fund or enable violence. | VC/PE‑backed companies may rely on components or suppliers tied to conflict minerals, embedding risk deep in the value chain. | A defense‑electronics firm uses components linked to mines in conflict‑affected regions. | Supply chains are complex and opaque, and certifications may be incomplete or unreliable. |
| Human Rights / Conflict Risk | Dual-Use Classification (e.g., Wassenaar Arrangement) | International classification and control of goods and technologies that can be used for both civilian and military purposes. | Many VC‑backed AI, drone, and cyber tools fall under dual‑use rules, which should trigger export‑control compliance and enhanced due diligence. | An AI surveillance product is subject to dual‑use export controls but is still sold into a high‑risk security market. | Controls may be inconsistently applied or lag behind new technologies; classification does not guarantee responsible use. |
| Human Rights / Conflict Risk | Corporate Complicity | A company’s contribution to human‑rights abuses through its actions, products, relationships, or omissions, even if it is not the primary perpetrator. | Key for framing how tech, finance, and logistics companies can be responsible for enabling war crimes or apartheid‑like systems. | A surveillance company knowingly provides tools used to target civilians in an occupied territory. | Legal thresholds for complicity can be high and vary by jurisdiction; many harmful contributions fall into a gray area unless clearly documented. |
| Human Rights / Conflict Risk | Export-Control Violations | Breaches of laws that restrict the sale or transfer of sensitive goods, software, or technology to certain countries, entities, or end uses. | Signal serious governance failures and can lead to sanctions, fines, and reputational damage for companies and investors. | A cyber‑intelligence firm sells tools to a blacklisted security agency in violation of export‑control rules. | Investigations may take years, and not all violations are detected; absence of enforcement does not mean compliance. |
| Human Rights / Conflict Risk | Enhanced Due Diligence (EDD) | More intensive screening and analysis applied to high‑risk sectors, clients, or regions beyond standard due diligence. | Essential for assessing investments in conflict‑affected and high‑risk areas, defense tech, or surveillance companies. | An endowment requests EDD on a VC fund focused on Israeli dual‑use technologies before deciding whether to commit. | EDD is often claimed but not rigorously implemented; reports may be superficial or rely heavily on manager self‑reporting. |
| Human Rights / Conflict Risk | Conflict-Affected and High-Risk Areas (CAHRAs) | Geographies where armed conflict, occupation, political instability, state violence, or severe human-rights abuses significantly increase the risk of harm linked to business activity. CAHRAs require heightened due diligence under international standards such as the UNGPs and OECD Guidelines. | Investments routed into CAHRAs — directly or through VC/PE funds — dramatically elevate legal, ethical, and reputational risk. Technologies used in surveillance, targeting, logistics, border enforcement, or military operations in these zones may expose investors to complicity claims or sanctions-related liabilities. Identifying whether a portfolio company operates in a CAHRA is essential for understanding conflict exposure. | A VC-backed drone analytics startup provides operational support in Gaza — a clearly recognized CAHRA due to ongoing military operations and severe human rights violations. LPs in the VC fund may be indirectly financing activity in this zone, even without direct knowledge. | Limited liquidity restricts rapid divestment. Public disclosures rarely show underlying companies. Ethical screens often do not penetrate the fund’s private portfolio, and LPs have little influence over holdings once committed |
| Human Rights / Impact | Adverse Human-Rights Impacts | Negative effects on individuals’ or communities’ human rights caused or contributed to by a company’s operations, products, or relationships. | Core focus of modern human‑rights due diligence; investors must assess whether they are linked to these impacts through their portfolios. | A predictive‑policing tool increases arbitrary arrests and discrimination against a targeted population. | Quantifying and proving impacts can be difficult, especially where access to evidence is restricted or dangerous. |
| Human Rights / Standards | Controversial Weapons | Weapons widely condemned under international law or norms, such as cluster munitions, chemical weapons, or certain autonomous systems. | Many responsible‑investment policies already flag or exclude controversial weapons producers, giving students a tangible divestment foothold. | A PE‑backed manufacturer supplies components for banned cluster munitions. | Definitions vary; some investors only exclude a narrow set and ignore new or unregulated but equally harmful technologies. |
| Human Rights / Standards | OECD Guidelines for MNEs | Recommendations by OECD governments to multinational enterprises on responsible business conduct, including human rights. | Provide a widely recognized benchmark for assessing whether companies and investors meet basic responsibilities in conflict zones. | An NGO files a complaint under the OECD Guidelines against a company supplying surveillance systems to an abusive regime. | Guidelines are non‑binding; enforcement depends on national contact points with limited powers. |
| Human Rights / Standards | UNGPs (UN Guiding Principles on Business & Human Rights) | Global framework outlining the state duty to protect, corporate responsibility to respect, and access to remedy for business‑related human‑rights harms. | Central reference for arguing that investors and companies must identify, prevent, and mitigate adverse human‑rights impacts. | A university cites the UNGPs when challenging a VC manager about a portfolio company’s role in Gaza. | UNGPs are voluntary; many managers claim alignment without implementing meaningful due‑diligence or remedy processes. |
| Human Rights / Conflict Risk | Dual-use technology | Technologies usable for both civilian and military purposes. | Many VC-backed firms market dual-use tools later used in conflict zones. | Agricultural drone repurposed for ISR missions. | Dual-use label obscures militarized applications. |
| Human Rights / Conflict Risk | Autonomous weapons systems | Weapons selecting and engaging targets without human oversight. | VC increasingly funds such systems with limited accountability. | Shield AI’s Hivemind-enabled drone identifies targets. | Regulatory frameworks lag behind technology. |
| Human Rights / Conflict Risk | Predictive policing | AI tools forecasting individuals or areas for potential crime. | Used in policing; risk of bias and rights violations. | Palantir analytics used to allocate patrols. | Algorithms are proprietary; no public audits. |
| Human Rights / Conflict Risk | Battle-tested | A claim that technology has been proven effective in conflict. | Normalizes civilian harm as a selling point. | Drones advertised as 'battle-tested in Gaza.' | Ethical context hidden from investors and customers. |
| Human Rights / Conflict Risk | Unit 8200 | Elite Israeli intelligence unit specializing in surveillance and cyber operations. | Many founders come from Unit 8200; technologies mirror military practices. | Cyber startup founded by Unit 8200 veterans. | Companies rarely disclose depth of these ties. |
| Human Rights / Conflict Risk | Sanctions exposure | Exposure to individuals or entities subject to international sanctions. | Sanctions create legal and financial risks for funds and LPs. | A cyber firm under U.S. export sanctions. | Private firms rarely report sanctions risks. |
| Human Rights / Conflict Risk | Export controls | Rules regulating transfer of sensitive or dual-use technologies. | AI, cyber, and drone firms may violate controls unknowingly. | Facial-recognition firm needs export licenses. | Regulations evolve slowly; compliance inconsistent. |
| Institutional Investing | OCIO | A third-party firm managing an institution’s portfolio and selecting managers. | Most universities rely on OCIOs, outsourcing oversight and transparency. | Cambridge Associates acts as OCIO for multiple endowments. | OCIOs may not disclose full fund lists or underlying exposure. |
| Institutional Investing | Alternative investments | Nontraditional assets like VC/PE, hedge funds, private credit, real estate. | Often 40–60% of endowment portfolios, least transparent category. | Endowment allocates 45% to alternatives. | Underlying companies not disclosed to the public. |
| Institutional Investing | Illiquidity premium | Extra return investors expect for locking capital into illiquid assets. | Used to justify heavy allocations to opaque private markets. | Pension boosts PE allocation expecting higher returns. | Premium assumptions unverified in private markets. |
| Institutional Investing | Commingled fund | Pooled vehicle combining assets from multiple investors. | Prevents institutions from tracking specific holdings. | OCIO puts clients into a pooled VC vehicle. | No transparency into underlying companies. |
| Institutional Investing | Manager of managers | External firm selects and oversees underlying investment managers. | Adds layers that reduce institutional oversight. | Foundation hires MoM to select VC/PE funds. | Creates distance between trustees and decisions. |
| Institutional Investing | Risk parity | Allocates risk evenly across asset classes rather than capital. | Can increase allocation to alternatives to ‘balance’ risk. | Portfolio raises VC exposure to equalize risk contribution. | Does not incorporate human-rights risk. |
| Institutional Investing | Strategic vs tactical allocation | Strategic = long-term targets; Tactical = short-term opportunistic shifts. | VC often falls under strategic allocation but tactical shifts increase exposure. | Pension tactically increases VC allocation. | Neither approach requires ethical or conflict-risk review. |
| Investment Strategy | Absolute Return | Strategy seeking positive returns regardless of market direction, often via hedge funds or multi-strategy vehicles. | Often used to justify opaque or ethically questionable funds under the banner of 'risk reduction.' | An absolute-return fund profits during geopolitical instability and conflict. | Strategies can be extremely opaque and may rely on defense stocks or commodities. |
| Investment Strategy / Risk | Independent Return | Strategy or asset class where returns are largely uncorrelated with public markets. | Managers often claim independent return strategies justify exposure to defense or surveillance because they’re 'uncorrelated.' | A hedge fund promoting independent returns holds large positions in military contractors. | Market independence is often overstated; human-rights risks remain regardless of correlation. |
| Investment Structure / Exposure Type | Indirect Investment | Exposure to companies through intermediaries such as VC/PE funds, fund-of-funds, or commingled vehicles. | Universities often claim they 'don’t directly hold' complicit companies, ignoring indirect holdings that still provide capital. | A university invests in a PE fund-of-funds that backs a drone manufacturer. | Indirect structures obscure responsibility and make transparency difficult. |
| Investment Vehicle (Alternatives) | Hedge Fund | Alternative investment fund using long/short, derivatives, leverage, or macro strategies to generate absolute returns. | Hedge funds often hold public defense contractors and cybersecurity firms supplying conflict zones. | A hedge fund holds significant shares of major weapons manufacturers. | Positions shift frequently; quarterly disclosures lag actual exposures. |
| Investment Vehicles | Closed-End Fund | An investment fund with a fixed pool of capital, often used in PE/VC and real‑asset strategies, with limited or no investor redemptions until maturity. | Closed‑end structures lock capital in for long periods, which can entrench exposure to conflict‑linked companies. | A 10‑year PE fund is structured as a closed‑end limited partnership holding multiple defense‑sector companies. | Investors have little liquidity and may argue they cannot divest, even when serious human‑rights concerns emerge. |
| Investment Vehicles | Open-End Fund | A fund that continuously issues and redeems shares at net asset value, common in mutual funds and some real‑asset or credit funds. | May provide more flexibility to exit controversial holdings but can still contain companies linked to arms, surveillance, or repression. | An open‑end credit fund invests in bonds of defense and security companies but allows quarterly redemptions. | Redemption gates and fees can still restrict exits; disclosures may not highlight conflict‑related holdings. |
| Investment Vehicles | Credit Fund | An investment fund focused on lending or credit instruments, such as corporate bonds, loans, or structured credit. | Credit funds can finance arms manufacturers, security contractors, or infrastructure in conflict‑affected areas through loans rather than equity. | A private credit fund extends loans to a defense‑tech company expanding operations in a conflict zone. | Credit exposures are often less visible than equity holdings and may not be captured in standard ownership databases. |
| Investment Vehicles | Mezzanine Financing | High‑yield, higher‑risk debt—often with equity‑like features such as warrants or conversion rights—used to finance companies in the layer between senior debt and equity | Can be used to fund expansions or acquisitions by companies in defense, surveillance, or extractive sectors. | A mezzanine fund provides subordinated debt to a firm building security infrastructure in an occupied territory. | Complex terms and lack of public disclosure make it hard to track which companies benefit from mezzanine capital. |
| Investment Vehicles | Sovereign Wealth Fund (SWF) | State‑owned investment fund that manages national savings, often from resource revenues or foreign‑exchange reserves. | Some SWFs invest heavily in Israeli defense, surveillance, and dual‑use technology, co‑investing alongside global PE/VC managers. | An SWF becomes a major LP in a VC firm backing autonomous weapons and ISR technologies. | SWFs can be opaque and politically influenced; their allocations are rarely subject to democratic oversight or detailed disclosure. |
| Investment Vehicles | Fund-of-One | A bespoke investment fund created for a single investor, typically to implement a tailored strategy or set of guidelines. | Allows large institutions to gain private‑market exposure with more control, potentially including human‑rights exclusions. | A university partners with a manager to create a fund‑of‑one that excludes weapons and settlement‑linked companies. | Terms are negotiated privately; without clear ethical guidelines, a fund‑of‑one can replicate the same harmful exposures as standard funds. |
| Investment Vehicles | Fund of Funds (FoF) | A pooled investment vehicle that does not invest directly in companies, but instead allocates capital across multiple VC, PE, hedge, or private‑markets funds. | FoFs are major pathways through which endowments and pension funds gain exposure to conflict‑linked VC/PE without seeing the underlying companies. | A university invests $50M into a global PE fund‑of‑funds that in turn allocates to a defense buyout fund, a dual‑use drone VC, and a cyber‑intelligence fund. | FoFs provide limited transparency; university filings usually show only the top‑level FoF name, and LPs often cannot veto specific underlying funds or ensure ethical screens apply through all layers. |
| Investment Vehicles | Closed-End Fund | An investment fund with a fixed pool of capital and no investor redemptions until the fund’s end date, typically used for private equity, venture capital, and real-asset strategies. | Closed-end funds lock capital in for years, which means universities and other LPs cannot easily exit even when underlying companies raise human-rights concerns or become linked to conflict-risk sectors such as defense, surveillance, or dual-use technology. | A 10-year PE fund structured as a closed-end vehicle owns several defense-tech portfolio companies supplying equipment to military operations in Gaza. The university LP cannot redeem or fully divest until the fund winds down. | Limited liquidity restricts rapid divestment. Public disclosures rarely show underlying companies. Ethical screens often do not penetrate the fund’s private portfolio, and LPs have little influence over holdings once committed |
| Nonprofit | Form 990 (U.S. Nonprofit Tax Filing) | Annual IRS filing for U.S. nonprofits, including universities and foundations, summarizing finances, governance, compensation, and some investments. | Often the only public window into a university foundation. Schedules and footnotes hint at endowment size, use of alternatives, and who is paid to manage money. | Students see $200M listed under “Alternative Investments” in the foundation’s Form 990, confirming large exposure to opaque private funds. | Many details are only required above thresholds. Smaller or indirect holdings may never appear, so the 990 is a partial map, not a full list. |
| Nonprofit | Schedule D (Form 990 – Supplemental Financials) | Schedule that breaks out endowments, donor‑restricted funds, and alternative investments in more detail. | Shows how much of the endowment is allocated to alternatives (including PE/VC), helping quantify exposure to opaque, higher‑risk assets. | Schedule D shows 35% of the endowment in “Alternative Investments,” including hedge funds and private equity partnerships. | Reports categories, not specific funds or portfolio companies, so it flags where risk sits but not exactly who the partners are. |
| Nonprofit | Schedule R (Form 990 – Related Organizations) | Lists related organizations, joint ventures, and significant partnerships connected to the filer. | Can reveal LP interests and joint ventures through which the university invests in PE and VC funds. | Schedule R lists “Global Growth Ventures LP,” which research shows is a VC fund backing Israeli defense‑tech startups. | Only “significant” related entities are required. Smaller vehicles or indirect structures may not show up at all. |
| Nonprofit | Audited Financial Statements | Annual financial statements reviewed by an independent auditor, including balance sheet, income statement, and notes. | Endowment footnotes often break out asset classes and alternative investments, revealing how much sits in PE/VC or overseas strategies. | A note discloses that 20% of the portfolio is in “International Private Equity” and “Emerging Markets” funds. | Audits verify numbers, not ethics. They aggregate categories and rarely name specific funds or companies. |
| Nonprofit | Schedule K‑1 | Tax form showing each partner’s share of income, deductions, and credits from a partnership or fund. | Confirms that the university is actually a partner in specific funds or vehicles generating certain income streams. | The university receives K‑1s from an Israeli innovation‑focused VC fund. | K‑1s are private and tax‑oriented; they do not list underlying portfolio companies or human‑rights impacts. |
| Risk / Analytics | Exposure Mapping | Systematically tracing how capital flows from an investor through funds, vehicles, and companies to specific activities and geographies. | Core to Ethics VC’s work: shows how university endowments and pensions end up financing conflict‑linked firms and technologies. | A student group maps flows from the endowment to a VC fund, then to a drone company active in Gaza. | Requires data, time, and cooperation from institutions; many links are hidden by fund‑of‑funds and complex structures. |
| Risk / Analytics | Sector Classification (GICS / NAICS) | Standardized coding systems (e.g., GICS, NAICS) that categorize companies by industry and sector. | Useful for identifying clusters of defense, security, surveillance, or dual‑use firms within large portfolios. | An analyst filters holdings by GICS codes associated with aerospace, defense, and security services. | Sector codes may misclassify companies (e.g., labeling them as 'software' instead of 'defense'), hiding relevant risks. |
| Risk / Analytics | Impact Pathways | The chains of cause‑and‑effect through which investment capital leads to specific social, environmental, or human‑rights outcomes. | Helps link seemingly distant LP capital in a PE/VC fund to concrete harms on the ground in conflict zones. | A pathway traces: university → VC fund → drone company → operational use in targeted strikes in Gaza. | Mapping pathways requires judgment and can be contested; some actors may deny links unless the chain is extremely direct. |
| Risk / Screening | Negative Screening / Exclusion List | Strategy that avoids specific sectors, activities, or companies (e.g., weapons, apartheid, severe human‑rights violations). | Concrete tool campaigns can demand: exclude arms makers, settlement builders, or firms enabling war crimes. | An endowment adopts a policy excluding companies involved in cluster munitions and certain military technologies. | Lists can be too narrow, outdated, or poorly enforced—especially in private markets and fund‑of‑funds structures. |
| Risk / Screening | Screening Criteria | The explicit rules used to include or exclude companies, sectors, or regions from an investment universe. | Defines what 'complicity' and 'clean' investments mean in practice within an ethical or human‑rights‑focused framework. | An endowment adopts screening criteria that exclude companies providing weapons or key technology to unlawful military operations. | Criteria can be drafted too narrowly, rely on weak data, or be applied inconsistently—especially in private markets. |
| Risk / Screening | Red Flags | Indicators suggesting elevated risk of human‑rights abuses, corruption, sanctions, or conflict involvement. | Provide a practical checklist for students and trustees to quickly spot potentially complicit funds or companies. | Red flags include ex‑military leadership, classified defense work, contracts with occupation forces, or operations in CAHRAs. | Red flags are not proof; if used carelessly they can be ignored as 'too broad' or 'speculative' without further investigation. |
| Risk / Screening | Watchlist Company | A company flagged for potential human‑rights or conflict‑related concerns that warrant ongoing monitoring but are not yet fully confirmed. | Allows campaigns and databases to track emerging risk without prematurely labeling every entity as 'complicit.' | A startup with founders from Unit 8200 and rumored military pilots is put on a watchlist pending more evidence. | Watchlists can grow long and unwieldy; without clear escalation criteria, companies may sit in limbo and avoid decisive action. |
| SEC / Compliance | AML/KYC Requirements | Anti‑money‑laundering (AML) and Know‑Your‑Customer (KYC) rules that require financial institutions to verify clients and monitor suspicious activity. | When applied seriously, AML/KYC can flag high‑risk counterparties, sanctioned entities, or shell companies linked to conflict actors. | A bank performs KYC checks before allowing a fund to open an account, identifying a sanctioned individual as a beneficial owner. | AML/KYC is focused on financial crime, not broader human‑rights risks; programs may be check‑the‑box rather than robust. |
| SEC / Compliance & Registration | SEC Form ADV | Filing registered investment advisers submit to the SEC describing their business, strategies, fees, and conflicts. | Lets students identify which advisers manage university assets and whether they market ESG or human‑rights claims. | An adviser’s ADV notes substantial focus on “defense and security technology” as a growth sector. | High‑level and generic. Does not list individual portfolio companies or spell out concrete human‑rights screens. |
| SEC / Offshore Structure | Cayman Islands Exempted Company | A common offshore vehicle used by hedge funds, PE/VC funds, and SPVs for tax and regulatory reasons. | Frequently used in master‑feeder structures that hold global assets, including defense and surveillance companies. | A Cayman exempted company serves as the master fund for a strategy investing in Israeli defense technology. | Offshore structures reduce transparency; beneficiaries and the public may not know which Cayman entities their capital flows through. |
| SEC / Regulation | Blue Sky Laws | U.S. state laws regulating the offering and sale of securities to protect investors from fraud. | Relevant when VC/PE funds are marketed to smaller institutions or individuals at the state level, including teachers’ or municipal pensions. | A PE fund must comply with multiple states’ blue sky laws when raising capital from public plans across the U.S. | Focus is on fraud and registration, not on human‑rights impacts or conflict‑linked business models. |
| SEC / Regulatory Authority | SEC (U.S. Securities and Exchange Commission) | The SEC is the main U.S. regulator that enforces securities laws and oversees disclosures by public companies and investment managers, including key filings like 10-K, 10-Q, ADV, PF, and 13F. | SEC filings reveal financial exposures by requiring funds and companies to disclose their holdings, investors, business relationships, and material risks. This makes visible the ownership stakes, capital flows, and contracts that link investors to defense, surveillance, or dual-use firms. | A university researching VC ties to Israeli defense tech relies on SEC Form ADV to identify a fund’s key principals, conflicts of interest, and whether it manages offshore feeder structures. Form 13F reveals the hedge-fund holdings of public weapons manufacturers supplying conflict zones. | SEC oversight of private markets is limited. VC/PE disclosures are sparse, Form PF is non-public, and ADV filings can obscure key structures. Reporting is threshold-based, and many managers fall below those limits. |
| SEC / Regulatory Reporting (Private Funds) | SEC Form PF | Confidential report to the SEC from certain private fund advisers on fund size, leverage, and risk exposures. | Confirms that regulators see some data on PE/VC risk, countering the myth that these funds are totally unmonitored. | A large PE manager files PF for its massive credit and buyout funds that hold defense positions. | Form PF is not public; students and the public cannot review it or use it directly for accountability. |
| SEC / Reporting | SEC Form 10‑K | Comprehensive annual report filed by public companies, including business description, risks, and financials. | Helps document how a company earns revenue, including reliance on military or security contracts. | A 10‑K discloses that a company generates a significant share of revenue from defense contracts with Israel. | Companies may use vague language and are not required to frame harms in human‑rights terms. |
| SEC / Transparency | SEC Form 13F | Quarterly filing from large institutional managers listing certain U.S.‑listed equity positions. | Useful for identifying public weapons, surveillance, or defense stocks held by a manager connected to the university. | A 13F shows a manager holding large stakes in major arms manufacturers. | Covers only certain U.S.‑listed securities and excludes private companies and many derivatives. |
| SEC / Transparency | Form S-1 | Registration statement filed with the SEC by a company planning an initial public offering, describing business, risks, and financials. | Allows researchers to see how a VC‑backed company presents its business model, including any defense or security dependence, before going public. | A drone‑tech startup’s S‑1 highlights 'defense and homeland security' as key growth markets. | Disclosure is still issuer‑controlled; companies may downplay controversial uses or omit granular details about military contracts. |
| SEC / Transparency | Form 8-K | Report filed to disclose major events shareholders should know about, such as acquisitions, lawsuits, or significant contracts. | Can reveal key developments like winning large defense contracts, investigations, or regulatory actions affecting conflict‑linked firms. | A company files an 8‑K announcing a multi‑year contract to provide surveillance systems to a government accused of war crimes. | Only certain events trigger 8‑K filings; many relevant developments may not be disclosed or may be described in vague terms. |
| SEC / Transparency | Beneficial Ownership (13D / 13G) | Forms that disclose when an investor acquires a significant stake (generally 5% or more) in a public company. | Show which large investors hold controlling or influential stakes in companies implicated in conflict‑linked activities. | A Form 13D reveals a hedge fund taking a major stake in a weapons manufacturer. | Thresholds mean smaller but still meaningful stakes are not disclosed; private company holdings are not covered. |
| SEC / Transparency | Form 10-Q | Quarterly financial filing providing unaudited results, updates on operations, and material changes since the last 10-K. | Helps researchers track shifts in revenue from defense contracts, new partnerships, or emerging legal risks during active conflicts. | A company’s 10-Q reveals a sudden revenue spike from 'international security contracts,' signaling increased militarization. | Less detailed than a 10-K; companies can disclose minimally unless changes are 'material'. |
| Tech / Surveillance | ISR (Intelligence, Surveillance & Reconnaissance) | Technologies and systems used to collect, process, and distribute information for military or security decision‑making. | Many VC‑backed drone, sensor, and AI platforms fall under ISR and are central to modern targeting and occupation practices. | A VC fund backs a startup that builds ISR software for real‑time monitoring of populations in Gaza. | ISR is a broad label; companies may present their role as benign 'data analytics' while enabling lethal operations. |
| Tech / Surveillance | Autonomous Systems | Robotic or AI‑driven systems capable of performing tasks with limited or no human intervention, including drones and ground robots. | Increasingly used in military and border‑security contexts, raising serious accountability and human‑rights concerns. | An autonomous drone platform is marketed for surveillance and precision strikes in urban environments. | The line between 'assisted' and 'fully autonomous' is often blurred, and marketing materials may understate military uses. |
| Tech / Surveillance | Lethal Autonomous Weapons Systems (LAWS) | Weapons systems that can select and engage targets without meaningful human control, combining sensors, AI, and weapons. | Widely criticized as crossing ethical and legal red lines, with strong civil‑society campaigns pushing for bans or strict regulation. | A defense‑tech company develops targeting algorithms that could be integrated into LAWS used in conflict zones. | Definitions and boundaries of LAWS are contested; some firms claim their systems always keep 'a human in the loop' even when oversight is minimal. |
| Tech / Surveillance | Predictive Policing / Algorithmic Profiling | Use of algorithms and data analytics to predict crime, identify 'high‑risk' individuals or locations, or profile populations. | Often amplifies bias and enables discriminatory surveillance, especially in contested or militarized environments. | A VC‑backed platform flags certain neighborhoods or groups as 'high‑risk,' leading to disproportionate policing and arrests. | Algorithms are opaque and proprietary; affected communities and investors usually cannot see or challenge how the models work. |
| VC/PE | Closed-end fund | A private investment fund with a fixed lifespan (10–12 years) in which capital is committed upfront and drawn down through capital calls. | Most VC funds use this structure, locking institutions into opaque, illiquid vehicles. | A $300M VC Fund VIII deploys capital over 4–5 years and returns profits after 8–12 years. | Underlying holdings not disclosed; reporting varies widely; LPs have almost no control. |
| VC/PE | Limited Partner (LP) | An investor providing capital to a private fund but not involved in management. | LPs (universities, pensions) supply most VC capital and are financially linked to outcomes. | A university endowment commits $15M to a Sequoia fund. | LPs receive limited information and often cannot see underlying companies. |
| VC/PE | General Partner (GP) | The manager responsible for sourcing deals, making investment decisions, and managing the fund. | GPs direct institutional capital into high-risk sectors and choose what to disclose to LPs. | Andreessen Horowitz acts as GP for its venture funds. | GP disclosures are voluntary; transparency varies widely. |
| VC/PE | Fund-of-funds | A vehicle that invests in multiple VC/PE funds rather than directly in companies. | Adds layers of opacity and reduces LP visibility into downstream companies. | A pension invests in a fund-of-funds holding 40+ VC/PE funds. | Exposure becomes difficult to trace across layers of intermediaries. |
| VC/PE | Capital call | A request from the GP for LPs to transfer committed capital to fund investments. | LPs must fulfill calls, limiting their ability to exit after learning new risks. | A 15% capital call funds two AI surveillance investments. | LPs cannot refuse without penalties; purpose of calls is often vague. |
| VC/PE | Secondaries | Buying or selling private-fund interests or private-company shares. | Used for exiting high-risk exposures but pricing and transparency vary. | A pension sells its stake in Insight Partners Fund XII. | Deals are private; LPs often cannot see who buys exposure. |
| VC/PE | Carried Interest | A share of fund profits (often 20%) paid to GPs after return thresholds. | Incentivizes aggressive scaling, including in high-risk sectors. | A GP earns carry from a surveillance-tech exit. | Misaligned incentives; no ethical considerations built in. |
| VC/PE | Dry powder | Committed but uninvested capital available for deployment. | Signals investment capacity but not intended sectors or risks. | $200M in dry powder waiting to be deployed. | Does not disclose upcoming investment targets. |
| VC/PE | Drawdown schedule | Timeline for when capital is called from LPs. | Determines when LPs are exposed to specific investments. | 40% drawn in two years; 60% over remaining period. | Schedules shift; LPs often unaware of specific investment timing. |
| VC/PE | Vintage year | Year in which a fund begins investing; used for benchmarking. | Common performance measure but irrelevant to ethical risk. | 2021-vintage AI fund compared to peers. | Says nothing about human-rights exposure. |
| VC/PE | Limited Partner (LP) | Investor in a private fund that contributes capital but delegates day‑to‑day control to the GP. | Universities are typically LPs. Their money makes the fund possible, even if they claim to be “passive.” | A university foundation is an LP in a growth equity fund that finances a border‑surveillance platform. | LPs have limited control once invested and often receive curated information, not a full picture of impacts. |
| VC/PE | General Partner (GP) | Managing entity of a PE/VC fund that makes investment decisions and manages the portfolio. | GPs choose which companies to back and can decide whether to prioritize or ignore human‑rights risks in their pipeline. | A GP leads a funding round for a dual‑use drone manufacturer despite UN reports of civilian harm. | Decision‑making is highly opaque. LPs and the public rarely see full investment memos or rejected deals. |
| VC/PE | Capital Commitment | Total amount an LP agrees to invest in a fund, to be funded over time via capital calls. | Even if not yet drawn, committed capital represents future money that may go into harmful companies. | A university commits $25M to a VC fund but has only funded $10M; the remaining $15M will support future deals. | Public documents often show commitments only in aggregate, not by specific fund or strategy. |
| VC/PE | Capital Call / Drawdown | Request from the GP for LPs to send part of their committed capital, usually to fund new investments or fees. | Capital calls continue the flow of money into a fund’s pipeline, even after human‑rights concerns surface. | After reports about a portfolio company’s role in Gaza, the fund still issues capital calls that the university funds. | Schedules and amounts are confidential; external researchers cannot track real‑time funding flows. |
| VC/PE | Unfunded Commitment | Portion of an LP’s commitment that has not yet been called by the fund. | Represents capital that might still be redirected or withheld when a fund’s companies are implicated in abuses. | A university has $40M in unfunded commitments to three PE funds with defense and surveillance exposure. | Most public reports don’t break out how much remains unfunded, hiding a key lever for change. |
| VC/PE | Carried Interest (“Carry”) | Share of investment profits (often 20%) paid to the GP after returning capital (and sometimes a hurdle) to LPs. | Creates strong incentives to prioritize outsized financial returns, even when they depend on war, occupation, or repression. | A huge exit from a conflict‑linked arms‑tech company generates tens of millions in carry for the GP. | Compensation is structured around financial gain only; social and legal externalities are not priced in. |
| VC/PE | Management Fee | Annual fee (often ~2%) paid by LPs to the GP to cover salaries and operating costs. | Endowments are literally paying the salaries of teams whose job is to find and fund companies—ethical or not. | A VC fund collects 2% annually on a $500M fund, including fees financed by a university LP. | Fee arrangements are detailed in private documents; students rarely see how much is being paid to which managers. |
| VC/PE | Lock‑up Period | Time during which investors cannot redeem or withdraw capital from a fund. | Lock‑ups are used to argue that divestment is impossible, even when serious abuses are documented. | A 10‑year PE fund prevents a university from exiting early after a portfolio company is tied to war crimes. | While capital may be locked, institutions can still refuse new commitments or explore secondaries—options often downplayed. |
| VC/PE | NAV (Net Asset Value) | Value of a fund’s assets minus its liabilities, typically calculated at the individual fund level and used to track performance over time. | Shows how much endowment wealth is tied to particular strategies, including those profiting from conflict. | A VC fund’s NAV jumps after a drone company secures a long‑term military contract. | NAV reflects financial value only; it does not capture legal, ethical, or reputational risk. |
| VC/PE | AUM (Assets Under Management) | Total value of assets a manager oversees across all funds and accounts, indicating the overall scale of the firm’s strategies. | Large managers with huge AUM can normalize or scale conflict‑linked investments across many institutions. | A mega‑manager with $500B AUM allocates billions to defense and security companies worldwide. | AUM is treated as a success badge, with no automatic scrutiny of how that capital is deployed. |
| VC/PE | Private Placement Memorandum (PPM) | Legal document describing a private fund’s strategy, risks, terms, and fees for prospective LPs. | Often the clearest articulation of what a fund intends to invest in—crucial for ethical assessment. | A PPM states a focus on “homeland security, border management, and defense technologies.” | PPMs are confidential; students usually cannot see them without trustee or LP cooperation. |
| VC/PE | Side Letter | Supplemental agreement granting a particular LP extra rights, reporting, or custom conditions in a fund. | Tool universities can use to negotiate better reporting, ESG commitments, or exclusions for high‑risk sectors or regions. | A university negotiates a side letter requiring the fund to notify it of any investment in weapons manufacturers. | Side letters are confidential; enforcement depends on the GP’s good faith and whether the LP actually monitors compliance. |
| VC/PE | Placement Agent | Firm or individual hired by a fund manager to help raise capital from institutional investors. | Helps match conflict‑linked funds with university endowments and can introduce conflicts of interest or aggressive sales tactics. | A placement agent pitches a defense‑focused VC fund to multiple university foundations. | Relationships and compensation structures are often hidden from public view and sometimes from trustees. |
| VC/PE Economics | Carry Forward / Waterfall Structure | The rules (the 'waterfall') that determine how cash flows from a fund are distributed between LPs and GPs, including how carried interest is calculated and carried forward. | Shapes manager incentives: waterfalls that reward early high‑multiple exits may encourage aggressive bets on conflict‑linked or dual‑use companies. | A PE fund’s waterfall pays 20% carried interest to the GP after returning capital and an 8% preferred return to LPs. | Waterfall mechanics are highly technical and buried in private documents; beneficiaries and students almost never see or understand them. |
| VC/PE Economics | Hurdle Rate / Preferred Return | The minimum return a fund must deliver to LPs before the GP starts earning carried interest. | Encourages managers to pursue deals they believe can clear the hurdle, which may include high‑risk sectors like defense tech and surveillance. | A PE fund has an 8% hurdle rate; once that is exceeded, the GP begins to earn carry on additional profits. | The hurdle is tied only to financial outcomes, not to whether returns are generated through human‑rights harms or conflict economies. |
| VC/PE Economics | Committed vs. Deployed Capital | Committed capital is what LPs promise to a fund; deployed capital is what has actually been invested into deals. | The gap between commitments and deployment determines how much future money may still flow into conflict‑linked companies. | A university has committed $30M to a VC fund but only $12M has been deployed into portfolio companies so far. | Public documents rarely distinguish between committed and deployed capital by fund or sector, obscuring future risk. |
| VC/PE Economics | Dry Powder | Capital that investors have committed to a private fund but has not yet been deployed into deals. It represents the fund’s available cash for future investments. | High levels of dry powder signal how much additional capital may still flow into high-risk or conflict-linked sectors. Even if a fund’s current portfolio appears clean, unspent commitments can later be invested in defense, surveillance, dual-use AI, or companies operating in CAHRAs. | A VC fund with $200M in dry powder begins increasing its exposure to Israeli defense-tech startups after October 2023, meaning university capital committed years earlier is now financing conflict-adjacent companies. | Dry powder levels are usually not disclosed publicly. LPs rarely know which companies future capital will target. Funds may shift strategy mid-cycle, deploying dry powder into sectors not aligned with original LP expectations or ethical screens. |
| VC/PE Performance | TVPI (Total Value to Paid-In) | A private‑markets performance ratio equal to the total value of a fund (realized + unrealized) divided by the capital paid in by LPs. | Used to justify PE/VC allocations; high TVPI from defense‑linked portfolios can be used to argue against divestment. | A VC fund with several dual‑use drone exits reports a TVPI of 2.5x to its LPs. | TVPI measures financial multiples only and ignores legal, ethical, and reputational costs associated with how returns are generated. |
| VC/PE Performance | IRR (Internal Rate of Return) | The annualized discount rate that sets the net present value of an investment’s cash flows to zero, widely used to evaluate PE/VC funds. | IRR is frequently cited by trustees as proof that a strategy is 'working,' even when returns depend on conflict‑linked activities. | A PE fund investing in weapons manufacturers reports a net IRR of 18% over 10 years. | IRR can be gamed by timing cash flows and ignores non‑financial harms; strong IRR does not equal ethical or sustainable investing. |
| VC/PE Performance | MOIC (Multiple on Invested Capital) | A ratio comparing the total value returned or expected to be returned to the amount of capital invested (e.g., 2x, 3x). | Simple metric that shows how much money has been made relative to what was invested, often used to celebrate lucrative exits regardless of impacts. | A fund boasts a 4x MOIC on a surveillance‑tech company later implicated in serious rights violations. | MOIC only captures multiples on cash; it does not price in sanctions, reputational damage, or future legal liabilities. |
| VC/PE Structure | Special Purpose Vehicle (SPV) | A legal entity created to hold a specific investment or group of related investments, often for one company or deal. | SPVs allow VCs and PE funds to raise extra capital for particular companies, sometimes concentrating exposure in high‑risk or conflict‑linked firms. | A VC sets up an SPV so select LPs can invest more heavily in a drone company supplying the Israeli military. | SPVs add structural complexity; they may not appear clearly in high‑level portfolio summaries or public filings. |
| VC/PE Structure | Feeder Fund | A fund that pools capital from investors and then invests it into a larger master fund. | Feeder funds are often used to route different types of investors (e.g., offshore vs. onshore) into the same underlying PE/VC strategy. | A Cayman feeder fund aggregates non‑U.S. investors into a master fund that backs Israeli cybersecurity startups. | Feeder structures obscure who the ultimate investors are and can complicate jurisdictional and tax transparency. |
| VC/PE Structure | Master-Feeder Structure | A common setup where multiple feeder funds (onshore and offshore) invest into a single master fund that holds the portfolio. | Widely used in hedge funds and some PE/VC vehicles; it allows managers to raise capital globally while centralizing positions in one pool. | U.S., European, and Middle Eastern investors each use different feeders that all invest into a master fund owning defense‑sector positions. | The structure is complex; students analyzing endowment holdings may see only the feeder’s name, not the master fund or portfolio companies. |
| VC/PE Structure | Follow-On Investment | An additional investment in an existing portfolio company, often in later funding rounds. | Follow‑ons deepen exposure to a company; choosing to reinvest after human‑rights concerns emerge is a clear complicity signal. | A VC leads a follow‑on round in a border‑security AI firm after it secures contracts in an occupied territory. | Follow‑on decisions are rarely disclosed publicly; LPs and stakeholders may not know when capital is doubled down on high‑risk firms. |
| Vehicles | Venture Capital Fund | Pooled fund that invests in early‑stage and high‑growth startups, typically via a limited partnership with a 10–12 year life and limited liquidity for investors | VC funds often back AI, drones, surveillance, and cyber firms that later supply militaries in conflict zones. University LP capital enables these bets. | A VC fund finances a drone startup whose systems are later deployed in Gaza; the university is an LP in that fund. | Portfolios are not fully disclosed publicly. LPs may have limited visibility into real‑world uses of funded technology. |
| Vehicles | Private Equity Fund | Pooled fund that buys significant or controlling stakes in companies, aiming to improve and sell them for profit. | PE can own or grow companies in weapons, cybersecurity, logistics, and surveillance supply chains that benefit from ongoing conflict. | A PE fund acquires a cybersecurity firm led by ex‑military officers with contracts in Israel’s security apparatus. | Portfolio companies are often private and opaque, making human‑rights due diligence difficult for outsiders. |
| Vehicles | Fund of Funds | Fund that invests in multiple other funds rather than directly in companies. | Adds an extra layer of opacity: university capital may travel through a fund‑of‑funds into PE/VC strategies with conflict‑linked portfolios. | A fund‑of‑funds allocates to several Israeli and U.S. defense‑tech VC funds; the university is two steps removed from end companies. | Tracing exposures from the institution to underlying companies is difficult without cooperation from managers. |
| Vehicles | Co‑Investment | Opportunity for LPs to invest directly in a specific portfolio company alongside the fund, usually with reduced fees. | Universities may end up directly owning shares in a controversial company, not just indirect exposure through a fund. | The endowment joins a co‑investment in a border‑security AI company marketed as a rare high‑alpha opportunity. | Co‑investments are private and one‑off; they may not be obvious from standard portfolio summaries. |
| Vehicles | Separate Account / SMA (Separately Managed Account) | Customized account managed for a single client, rather than a commingled fund, often with tailored guidelines. | In theory, universities can use SMAs to build in human‑rights exclusions and specific screening rules. | An endowment hires an asset manager to run a private‑markets SMA that excludes weapons manufacturers and settlement‑linked companies. | Terms are negotiated privately and may not be shared beyond a small circle of staff and counsel. |
| Vehicles | Secondary Sale (Secondaries) | Sale of an LP interest (or direct stake) to another investor before a fund liquidates. | Gives universities a path—imperfect but real—to exit funds with major human‑rights concerns. | A university sells its interest in a defense‑heavy PE fund to a secondary buyer at a discount. | Secondary markets may be thin; prices can be discounted and transaction details are often confidential. |
| Vehicles | Beneficial Owner | Person or institution that ultimately enjoys the benefits of ownership, even when assets are held through intermediaries. | Despite layers of funds and SPVs, university endowments are beneficial owners of profits earned from complicit companies. | A university is the beneficial owner of shares in a surveillance firm held via a Cayman SPV. | Complex structures can hide who truly benefits, making accountability harder without forensic research. |
