Is socially responsible investing (SRI) the
best approach for a sound bottom line? It depends, according
president of Marc J. Lane Investment Management, Inc. in Chicago
as well as adjunct professor of law at Northwestern University
School of Law, an adjunct professor of business at the University
of Illinois and the author of 32 books. In his new book Profitable
Socially Responsible Investing? he argues that the way to
do right by your organization's mission and its return on
investment (ROI) is to change your SRI strategy.
Typically, socially responsible investors practice "negative
sreening" --eliminating those companies whose products
they find objectionable, such as arms, tobacco or liquor.
however, explains that avoiding cigarettes and booze altogether
does not necessarily guarantee a healthy portfolio.
"We discovered that you end up with a less-diversified
portfolio," he explains. "Values-based investing
is a neglected opportunity for nonprofits, especially if they
or mission-based investing, involves matching an investor's
values with companies that have similar operational values.
For example, an environmental nonprofit with an endowment
to invest would want to buy stock in a company with excellent
environmental practices. Suppose that company produces bullets
does not see a problem in that case.
"A careful examination of management's behavior will
empower the investor, more effectively than negative screening
could ever have done, to deploy their investment capital in
a way that gives voice to their principles," he writes.
Also, donors often want to know how the passive assets of
the charity are driving mission. "They want to see those
dollars put to work in a way that reflects their own values,"
says. "With Advocacy
the nonprofit can tell that story."
How do you find out about companies that may share your
organization's values? Check annual reports, SEC reports,
etc. At the same time, seek the counsel of a professional
advisor who can assist your board in adapting an investment
policy to targeted screening, he advises.
is not a static process,"
explains. "Your organization collaborates with like-minded
institutions. It establishes objectives in its investment
policy statement and then implements them. The charities that
don't do this will be left behind. Its an attractive and effective
way to drive mission--at no cost."
For additional information on purchasing the book and on
on or go to the following URL: www.AdvocacyInvesting.com