World
Ethical Investing
Socially responsible Jewish investing on rise in wake of Madoff.
revenues from pork, alcohol, gambling,
pornography or tobacco.
Tamar Snyder
The Jewish Week/JTA
New York
I
n the same manner that she shops
for locally grown produce, Abigail
Weinberg chose to sidestep the bank
behemoths and open an account at a
small, local bank that invests in her Ann
Arbor, Mich., community.
"I consider myself someone who
wants to be socially and environmentally
responsible in all areas of my life she
says.
Weinberg applies the philosophy to
her investment portfolio, too. She invests
directly in community development
financial institutions and has money in a
socially responsible index fund. And when
the Jewish Funds for Justice launched
two years ago its Community Investment
Initiative, a socially responsible
investment program aimed at modest
investors, Weinberg was one of the first
investors.
Her $2,000 investment may not have
been "a huge amount of money': says
Weinberg, who used to work at the Shefa
Fund before it merged with the Jewish
Funds for Justice. But "it was invested
with intentionality as an expression of the
Jewish value of tikkun olam," or repair of
the world.
As the green movement continues to
gain ground within the Jewish community,
many investors are re-examining their
investment portfolios with an eye toward
not only financial gains but also social
impact. The same people who frequent
farmers' markets and have switched their
light bulbs to compact fluorescents are
bringing that passion to their portfolios.
Until recently, however, only Jews of high-
net worth or institutional investors like the
Reform Pension Board, federations and
family foundations had access to uniquely
Jewish avenues for ethical investing. This
left individual social justice activists and
even Jewish communal professionals like
Jeremy Burton, senior vice president of
philanthropic initiatives at the Jewish
Funds for Justice, out in the cold.
Community Funding
For more than a decade, JFRJ has
leveraged more than $30 million in
loans through the Tzedec Economic
32 May 20 • 2010
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The Jewish Funds for Justice is investing $1.2 million to help build affordable
housing in east Baltimore.
Development Fund. Tzedec offers mission-
minded investors the opportunity
to earn a modest interest rate while
supporting job creation and community
development in low-income areas such as
Baltimore, Md., the Gulf Coast region, Los
Angeles, Philadelphia, South Florida and
Washington.
Tzedec currently manages $11.5 million
in investments — more than doubling the
amount in the last five years.
The minimum investment is $18,000,
but as demand for socially responsible
investment options increases, Jews of
more modest means now can invest to
achieve social impact in a Jewish way.
In 2008, JFRJ partnered with the Calvert
Foundation to launch the Jewish Funds for
Justice Community Investment Initiative,
which allows American Jews to participate
in community investment by lending
as little as $1,000. More than $120,000
has already been invested through this
program.
"It's nascent, but it has a lot of potential
as a vehicle for smaller investors': Burton
says, adding that he has invested his own
money in the fund.
Socially responsible investing (SRI),
also known as ethical investing, has seen a
boom in recent years.
One of every $9 under professional
financial management in the United States
is involved now in socially responsible
investing — investments that take into
consideration not just the financials
but also the social and environmental
consequences of investments.
Within the faith-based world, socially
responsible investing dates back more
than 200 years, with Quaker immigrants
arguing against investing in war and the
Methodists managing their money using
what is known in modern investment
lingo as "social screens:'
Religious mutual funds today have $26
billion in collective assets, according to
the Social Investment Forum Foundation.
Most of these funds screen out or avoid
investing in businesses that make money
from tobacco, gambling and other "sin
stocks" that violate their religious values.
Ave Maria's Catholic Values Fund
was started at the insistence of Tom
Monaghan, the owner of Domino's Pizza
and a devout Catholic. The fund screens
out companies involved in activities that
the Catholic Church is against, such as
abortion and pornography.
The Amana Fund invests according
to Islamic principles, avoiding firms
that derive more than 5 percent of
A Jewish Fund?
No corresponding Jewish SRI fund exists,
says Jared Pfeifer, a doctoral candidate at
Cornell University whose work focuses on
the intersection,of finance and religion.
Yet Mark Schwartz, associate profes-
sor of law, governance and ethics at York
University in Toronto, believes that one may
come onto the scene in the near future.
Many challenges are expected, such as who
would be on any screening committee for
the Jewish mutual fund, what their qualifi-
cations would be and whether a majority of
Jews would accept the qualifications.
"This is particularly the case in the
Jewish community, where there is great
diversity of beliefs regarding many mat-
ters, including acceptable investment
practices:' Schwartz says.
The Jewish community, however, has
been an active force in the world of com-
munity investing, a form of SRI in which
investors lend funds, often at a below-
market interest rate, to support affordable
housing and other initiatives that benefit
traditionally underserved communities.
In 1997, the Union for Reform Judaism
began actively promoting ethical invest-
ing among its membership. And, more
recently, the URJ has encouraged con-
gregations to join the Chai Investment
Program by investing 1.8 percent (a play
on the numerical value of chai, or life,
which is 18) of its assets in community
development.
In addition, the Reform Pension Board,
which serves professionals in the Reform
movement, was the first Jewish organi-
zation to join the Interfaith Center for
Corporate Responsibility.
"Suddenly, people are viewing banks
not just as the place where they happen to
have a checking account. They want to see
how that money creates jobs and makes a
difference for real families locally;" Burton
said.
In light of the stock market losses of
2008 and the Bernard Madoff investment
scandal, individual investors are increas-
ingly open to the idea of measuring their
returns in ways that are not solely financial.
"There's a lot more interest in what we
call a triple-bottom line: financial profits,
social impact and environmental respon-
sibility," Burton says.
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