More Than Money
Issue #15

The Human Side of Investing

Table of Contents

“What's The Road To Real Change? Controversies in SRI”

Not everyone agrees on the best strategies for "doing good while doing well." Here are a smattering of the opinions we've heard:

Daniel Solomon, a third-generation philanthropist, sometimes invests in innovative businesses and community-development initiatives, but he hasn't put much energy into screening his stocks. "Without an organized campaign such as the South African divestment movement," says Solomon, "screening seems unlikely to make much difference in the business practices of companies. It might make an individual investor feel better, but screening doesn't offer much hope of changing the direction of a global economy dominated by multinational corporations." Solomon adds, "While I would balk at buying tobacco or nuclear/defense companies, my investment strategy for stock ownership on the whole is simple: make as much money as possible so I can funnel the profits into social change philanthropy. The organizations I support are my real hope for change."

In contrast, Amy Domini, co-author of Investing for Good , says portfolio screening is likely "our best hope for the future." As she and her co-authors, Peter Kinder and Steven Lydenberg note, representatives of socially-responsible investors "can press corporations to respond to social concerns--through their discussions with corporations and through voting their shares, because millions and sometimes billions of dollars back them up."

Jill Ratner, Director of the Rose Foundation for Community and Environment, has long screened her personal portfolio and the portfolio of her foundation. Recently, however, she worked on a shareholder-resolution campaign to keep the Maxxam Corporation from clearcutting old-growth forest in California. As Ratner tried to find an organization with holdings in Maxxam to sponsor her resolution, she found a foundation which was sympathetic, but it had just sold its Maxxam stock as a protest of the company's clearcutting plans! Says Ratner, "I now believe that it is useful to retain a minimal position in companies whose business practices you deplore. It can offer real leverage for organizing shareholders for change."

Susan Meeker-Lowry, author of Investing in the Common Good , believes screening is a good first step for people to start thinking about their investments and what kind of economy would best serve the world. However, she cautions; "If we really want to be effective we need to put more of our money into community-development financial institutions and in small start-up companies working on such things as alternative technology, renewable energy, and environmental clean-up."

Meeker-Lowry also wants investors to realize their impact as activists: "We need to break the corporate grip on local economies through consumer boycotts, challenging corporate charters, changing public policies, and organizing direct action campaigns. This means investing our time and energy as well as our money."

Jeffrey Dekro, Director of the Shefa Fund in Philadelphia, feels that most talk about SRI is too focused on individual investors, ignoring the potential power we each have as members of associations and institutions. In response, the Shefa Fund has launched its Tzedek/Justice Economic Development Campaign to convince American Jewish organizations to rethink their investment strategies for their institutional capital. According to Dekro, "That's $9 billion in Federation endowments, family foundations, organizational endowments, and synagogue pension-funds assets that currently sit in commercial banks and conventionally-managed portfolios."

Dekro promotes Jewish investment in community development financial institutions--federally-insured development banks, credit unions, and community loan funds. As Dekro notes:

"The Jewish community understands the crucial role credit plays in a community's well-being. Historian Henry Feingold points out that before 1925, only one bank in New England and one in the mid-Atlantic states would make loans to Jews. The Jewish response? 'By 1927 there were in existence 509 loan societies' and '2,367 mutual benefit societies [that]...extended small no-interest loans.' Best known was New York 's Hebrew Free Loan Society, which lent $15 million to 400,000 borrowers over a 30-year period. Such loans, Feingold says, were the key ingredient in the American Jewish economic success story."

Whatever the differences among the people with whom we talked, all agreed that socially-responsible investment is not just a means to express personal choice or bear witness. The greater goal is to build a movement capable of creating real change. As Amy Domini asserted in a recent article in the Green Money Journal,

"The struggle is too great, the need too immediate, the failure too costly to allow ourselves to do nothing.... It is not enough to wear our Birkenstocks and Patagonia as we sip Odwalla juices. We must do more than 'no harm.' Social investing is not just eco-fundamentalism applied to pricing stocks. It is a means of social change."

We at More than Money heartily agree and hope that more people will explore opportunities to invest in the common good. As the people we've interviewed in this issue attest, this can transform investing from just a way to make money to a creative and soul-satisfying journey.

--Steve Chase, for the editors

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