Until it becomes politically untenable to provide contracts to these companies or make laws that fuel the industry.

A moral stockholder can help drive the company in a moral direction.

Why would you hold stock in something if the morals you wish to champion will make it less profitable or non-existent? Better to drop that cash in something like renewables which are going to see growth for decades to come and give you warm fuzzies at the same time.

There's also the press angle:

Press: You invest in private prisons

University: But we do so with good intentions, we wish to improve the...

Public: Ugh, too many words. These guys are clearly jerks.

Really divestment is the no man's land between working for change and supporting the status quo. Instead of doing good, Columbia just decided to stop doing bad.

The 1980s pressure to divest from South Africa is sometimes credited with pressuring the South African government to dismantle apartheid (https://en.wikipedia.org/wiki/Disinvestment_from_South_Afric...). University investment funds were in the vanguard, after student protests on campus.

But in that case, as would be true here, change came more from the awareness of the problem divestment brings as the economic effect. Private action can motivate public action.

Regardless, financing the activities of something you find immoral is immoral. Your logic--that if you don't do something, someone else will--is the rationalization for much wrongdoing.

From http://www.iop.harvard.edu/does-divestment-work

>"The conventional wisdom is that divestment from South Africa was a success; public pressure lowered targeted companies’ stock prices and forced them to comply with the divestment activists’ demands. However, the true impact of divestment from South Africa is unclear. In a 1999 study, Ivo Welch and C. Paul Wazzan examined the impact of divestment from banks and corporations active in South Africa and found that these campaigns had almost no impact on public market valuations:"

And from the 1999 study they referenced:

>"Despite the prominence and publicity of the boycott and the multitude of divesting companies, the financial markets’ valuations of targeted companies or even the South African financial markets themselves were not easily visibly affected. The sanctions may have been effective in raising the public moral standards or public awareness of South African repression, but it appears that financial markets managed to avoid the brunt of the sanctions."

Divestment campaigns are problematic in that people have finite reserves of outrage and if they write a letter to the local university president urging divestment they're less likely to go on to write their state senator urging them to stop using private prisons.