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Thursday, September 1, 2005


Is socially responsible investing (SRI) the best approach for a sound bottom line? It depends, according to , 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 have endowments."

method, Advocacy InvestingSM 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 or beer? 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 InvestingSM, 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.

"Advocacy InvestingSM 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 , click on or go to the following URL:


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Announcing Marc J. Lane's 35th Book:

The Mission-Driven Venture: Business Solutions to the World's Most Vexing Social Problems

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