June 2, 2014; Forbes India
Although they addressed their comments to religious organizations, Katinka C. van Cranenburgh and Celine Louche have much to say that should be important to all charitable entities, religious or otherwise, regarding how they treat their investments. They call on religious organizations to “practice what they preach when investing,” recognizing that there is power in investing.
In particular, this phrase in their Forbes India article is particularly important: “Investing in corporations is not a neutral activity,” they write. “It impacts people’s lives…Investments will have an effect on the climate, on land and water, on poverty and equality, [and] on justice and peace.” These are concerns of religious organizations to be sure, but they also underlie the values, programs, and priorities of charities and nonprofits writ large.
The argument used by some nonprofits that their investments are too small to matter doesn’t wash; every dollar invested is a statement of priorities and values, or the lack of them. The argument used by larger nonprofits, particularly foundations, that their investments in troubling, noxious companies generate revenues for the nonprofits’ core missions is also weak; their investments in bad companies harm communities and nations and signal tacit approval of the corporations themselves. A third argument, that socially responsible investments require a significant sacrifice of returns on investments, has been disproven year after year, with many instances of socially responsible investment achieving comparable or even higher returns than conventional stocks.
As NPQ has noted before, there are numerous funds into which nonprofits can invest or sweep their assets as needed that don’t end up giving approval to corporations supporting weapons, alcohol, gambling, tobacco, fossil fuels, and other objectives of socially responsible investment.
The authors of this piece note that guidance for religious organizations is available from sources beyond the published guidelines adopted by socially responsible investment funds. “Religious teachings are available to guide investors,” the authors write. “Whether you are Hindu, Muslim, Buddhist, Jewish or Christian, original scriptures and modern interpretations of religious leaders are available.”
The important element of the article is that we all have investment opportunities to pursue that can and should be consistent with our principles and missions. There is no justification for placing the burden for socially responsible or mission related investing onto other entities when our own nonprofit or religious organizations are not doing the same. For nonprofit and religious organizations that may have seen their public trust wane, putting all of their resources, including investment assets, to work for social change can add credibility and build trust. It takes commitment and sometimes creativity, but as the authors note, there is “a wealth of possibilities and opportunities” available to charities and to religious organizations with the potential upside that social investment by all groups, not just universities and foundations, “can influence business leaders toward more responsible management.”—Rick Cohen