Donors and nonprofits who are interested in seeing their charitable money work for social good have a new way to invest. Humboldt Area Foundation is now offering a Socially Responsible Investment Fund (SRI) which focuses on investments that address climate change, sustainability and other social issues.
“HAF has been evaluating the possibility of a Socially Responsible Fund for over a decade,” said Humboldt Area Foundation Executive Director Patrick Cleary.
Cleary explained that socially responsible investing has historically generated lower returns than traditional investments, creating a “conundrum” for donors who would then have less money to offer in grants and scholarships. That, combined with a lack of consensus on what “socially responsible” meant, gave HAF’S staff and Investment Committee much to research before deciding on the best strategy.
“The approach we settled on after much research was to focus the fund on investments which address environmental and climate change issues, which resonated with our donors,” said Cleary. “In addition, we were able to construct a portfolio that appears to be competitive on return with our long-term pool, so hopefully donors will not have to accept lower returns. The reaction from our fund holders has been positive enough for us to reach a large enough threshold to launch the fund.”
The investment option is broadly consistent with the investment policy established by HAF for its long term investment pool, but invests with fund managers whose security selection and portfolio construction processes focus on companies with high sustainability ratings, positive economic development, attention to renewable resources and good governance. Holdings in the pool will be regularly reviewed to assure they are meeting sustainable investment practices.
“At HAF we incorporate the tenets of our Mission statement in all we do,” said Finance Committee Chair Charlie Jordan. “Our investment strategy is yet another way that is true. By investing in socially responsible funds we seek funds that provide both financial returns and social and environmental good to bring about a positive change.”
Because this is a new offering, there is no historical track record on investment performance, but simulations show that the proposed fund mix for the SRI would have performed slightly better than HAF’s long term pool over the last three years and matched HAF over the trailing five years, with somewhat higher volatility. The underlying investment costs of the funds are very comparable to the fees on HAF’s Long Term Investment portfolio.
“Some of our donors would like to direct their donations into an investment vehicle that more aligns with their values,” said Investment Committee Chair John McBeth. “HAF is lucky to have Angeles Investment advisors on our team, and with their help we have developed a Socially Responsible Investment Portfolio to address this complex issue.”
Investing in the Socially Responsible Fund is at the option of the donor or nonprofit. Individuals interested in learning more should contact Patrick Cleary at (707) 267-9902
About Humboldt Area Foundation:
Vera Vietor established the Humboldt Area Foundation in 1972. Since then, more than $80 million in grants and scholarships have been awarded in Humboldt, Del Norte, Curry and Trinity Counties. Humboldt Area Foundation promotes and encourages generosity, leadership and inclusion to strengthen our communities.
For more information on services provided by the Foundation please visit the Humboldt Area Foundation website at hafoundation.org or call (707) 442-2993.