The über quest which kicked off this blog, [how to use ]Money[ to ]Changes Things, was my search for information on how to invest our surplus. A late middle-aged couple with prudent financial habits and enormous good luck (parents who paid for our education, well-compensated work we each care deeply about, good health, good kids), the pat answers about asset allocation and index funds did not satisfy my sense of noblesse oblige. There had to be a way to kill two birds with one stone, so to speak. I felt uncomfortable so completely splitting our investment side from our philanthropic giving. Surely there were ways to invest our money [we adopted a goal of 1% of our networth to be allocated to community investment] which could achieve returns and some of our giving goals, chiefly helping people to improve their lives.
Many of the discoveries I made are listed in the links on this blog. I revisit them from time and time, and they still provide great resources for like-minded folks. Once I located socially responsible investments I felt great about, like the Equal Exchange CD which provided both modest interest and a credit line for coffee farmers, and microfinance notes through MicroPlace, my interests branched out. I wrote more about the consumption end, as more and more green products and strategies have blossomed.
Now necessity forces a return to that über quest, nearly 5 years into it. Pennsylvania's Blue Sky Law regulators have not reapproved Microplace's status to sell securities in our state. Wainwright Bank, the holder of the Equal Exchange CD's has been sold. Likewise, Calvert Fund's Community Investment Notes are not available to Pennsylvanians. The Reinvestment Fund, and Weavers Way Coop are locally based, and available to us, but we already have money invested with them and I like to diversify our impact.
It's is time to reinvest the Microplace funds which have just come due. With the obvious options blocked, and no social enterprise as having made enough money to go public, to my knowledge, it is a time to redefine my goals. An article in the New York Times this morning sums up the field well.
Shared value is an elaboration of the notion of corporate self-interest — greed, if you will. The idea that companies can do well by doing good is certainly not new. It is an appealing proposition that over the years has been called “triple bottom line” (people, planet, profit), “impact investing” and “sustainability” — all describing corporate initiatives that address social concerns including environmental pollution, natural-resource depletion, public health and the needs of the poor.The shared-value concept builds on those ideas, but it emphasizes profit-making not just as a possibility but as a priority. Shared value, Mr. Porter says, points toward “a more sophisticated form of capitalism,” in which “the ability to address societal issues is integral to profit maximization instead of treated as outside the profit model.”Social problems are looming market opportunities, according to Mr. Porter and Mr. Kramer. They note that while government programs and philanthropy have a place — beyond dimes, Mr. Rockefeller created a path-breaking foundation — so, increasingly, does capitalism.My approach is idiosyncratic. My small amount of mission investing is the feel-good part of our portfolio. Mostly we have a ton of Pennsylvania municipal tax-free bonds. Hard to feel emotional about ALLEGHENY CNTY PA SAN AUTH SWR REV REF SER A B/E MBIA CPN 5.000% DUE12/01/21 DTD 05/18/05 FC 12/01/05 CALL 12/01/15 @ 100.000, though admittedly, helping Allegheny County's sanitation authority improve their sewer is a good thing to underwrite.
My personal answer at the moment is to invest in companies producing value, by my definition of value: products that will improve people's lives and add to, or at least not subtract from, quality of life on our planet. While I wish there were sewer-grid independent toilet companies to invest in, we're not there yet. However, Zipcar went public this year. It was on my original Fantasy Social Mission Index Fund. I bought some. When the stock goes up, I am cheering not just for the uptick, but for the concept. It seems like a great business concept, once people understand it and adapt their behavior. Enabling Zipcar to market its idea will benefit us all - fewer cars in the street, lowered emissions, more money in people's pockets, and more citizens exploring and expanding multi-modal transportation.
And how to invest the next chunk coming due? We attended a destination wedding and instead of renting upscale hotel rooms, we found a beautiful house to rent on VBRO. Amazingly, it was cheaper than the hotel and even nicer than we imagined. I was so impressed with VRBO that I booked a cottage on the Chesapeake for four nights. So much better than time-shares with their weird rules, bland decor, and random locations. Turns out that VBRO is owned by HomeAway and has recently gone public - AWAY. Essentially they are an Ebay for second home owners, conveniently helping them market their excess space and creating value for vacationers - and hopefully cutting into the construction of lots of crappy time shares and hotels. They don't have a socially responsible mission, but they help efficiently utilize a lot of beautiful under-used homes. I'd rather be investing in more direct ways of repairing the world, but as a stop-gap measure, AWAY will work, unless anyone out there has a better idea.
PS, in you belong to an Evangelical Lutheran Church, you can invest in their Mission Fund - they lend money to congregations to build churches. Anyone know of other denominations with programs like this?