The Benefit of Socially-Responsible Investing

Hi Kimberly,

This is a great overview of how people can implement socially-responsible investments in their own portfolios. Your last question really struck a chord with me.

The type of SRI discussed above focuses on negative screening - that is, withholding from investments in companies that have objectionable products or practices. While that's laudable, it doesn't make a positive impact on society; it just avoids financing negative impact. That can be frustrating for many investors - it's just keeping your hands and conscience clean. There is, however, a way you can invest that does in fact create a tangible, positive social impact; that is, "rolling up your sleeves," so to speak, and putting your money to work for good.

It's called "mission-related investing," and it means to seek out investments that advance specific social issues. (Full disclosure: I represent a client, Community Capital Management, that handles this type of investment.)

For instance, if the issue is poor schools in the inner city, you could invest in an early education center. If it's poverty, you could invest in an affordable housing project or job creation initiative. You can even address environmental pollution by investing in a municipal bond to rehabilitate environmentally-hazardous sites or construct green infrastructure.

Community Capital (www.ccmfixedincome.com) has investments financing all these initiatives and more, and they and their clients have been able to invest almost $3 billion in developing communities across America.

Just wanted to give you and your readers the heads up, Kimberly, that socially-responsible investing CAN be a vehicle for creating real change - you just have to "stay positive" with how you select those investments.

If you have any questions, drop me a line - jwakefield at weinbachgroup dot com.

Thanks, and keep up the fantastic work!

Julia

Julia Wakefield, The Weinbach Group of FL 3:32PM July 16, 2009