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  • More for Mission member, Needmor Fund, presents virtues of sustainable equity screens in a volatile market

    January 27, 2009

     Lisa Hagerman, Tuesday, January 27th, 2009

    Sarah Stranahan, Needmor Fund Board Member, tells a “Tale of Two Foundations”(PDF) in which the Needmor Fund did 4.5% better (annual return as of 10/31/08)  compared to another traditional foundation—that is not a mission investor. 

    Sarah’s theory that in a down market or a bull market their screened equity managers have a consistent quality bent investing in:

    “Companies with good environmental policies, good employment policies and good corporate governance that tend to have management that is ethical, cautious, unwilling to incur large debt, willing to defer immediate gain to protect the company from future risk, and slow to capitalize on short term trends that do not increase long term value.” 

    While ultimately investment performance depends on strategic asset allocation and a rigorous investment philosophy, the “Tale of Two Foundations” suggests that disciplined equity screens tend to outperform in volatile markets. 

    The “Tale of Two Foundations” also reports that over the five year period the Needmor Fund outperformed the traditional foundation by only .4%. Sarah goes on to say in a recent Responsible Investor article: Why are we trying to prove that we are as good as the dominant markets?  The dominant markets have failed dismally and that the time is now for systemic reform. See the full article in Responsible Investor, Systemic reform is the only course for ‘decimated’ investors.   

    posted 10:25AM 01/27/2009 by Lisa Hagerman

  • Krosinsky & Robins book offer insights on the spectrum of socially responsible investments

    January 23, 2009

    Lisa Hagerman, Friday, January 23rd, 2009

    KLD Research & Analytics hosts a reception and book signing for Cary Krosinsky, of Trucost Inc., on January 23, 2009. Cary will present “Sustainable Investing,” which he co-edited with Nick Robins, and answer questions about his work.

    This book covers the rise of sustainable investing and the value in long-term investing that incorporates environmental, social and corporate governance (ESG) factors into the investment decision-making process.   There is an excellent chapter on fiduciary duty by Stephen Viederman, member of the More for Mission Leadership Committee with the Christopher Reynolds Foundation.

    Particularly noteworthy is the chapter on -- Sustainable Equity Investing:  The Market-Beating Strategy-- and how social, ethical and sustainable investment strategies are positively correlated with financial return.  Cary Krosinsky and Nick Robins shows that sustainable investing funds have significantly outperformed mainstream indices, returning 18.7%, on average, over the five year period (12/31/02 -12/31/07) versus the MSCI World, S&P 500 and FTSE 100’s returns of 17%, 13.2% and 13% respectively.

    posted 10:58AM 01/23/2009 by Lisa Hagerman

  • Community development banks in the news--opportunities for mission investors

    January 13, 2009

    Lisa Hagerman, Tuesday, January 13th, 2009

    Community Development Finance Institutions (CDFIs) have been getting some positive press lately.  Greg Fairchild Associate Professor at the University of Virginia’s Darden School of Business comments that the CDFI model can help us out of the mortgage mess.  CDFIs have built a business model on providing mortgages, building savings accounts and providing equity to small businesses in underserved markets often perceived as too risky, and have done so with charge offs less than or comparable to the overall banking industry.  See the full article in the American Banker (Viewpoint:  CDFI Model Can Show the Way Back to Reality, January 2, 2008).  Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions comments that CDFIs have strong balance sheets and are relatively unencumbered by the types of losses that have affected mainstream banking and investment institutions ( See Outlook for Community Investing in 2009). 

    Recent press on community banks (See Crain’s New York Business Article November 24, 2008) talks about how as major banks scale back their small business lending, it has created more opportunities for the smaller community banks—that often keep their loans rather than reselling them and follow a due diligence process that emphasizes a company’s finances and credit history.  Carver Federal Savings Bank projects a 15% increase in small business loans this year, with most deals in the $100,000 to $2.5 million range.  Carver Federal Savings Bank is a member of the Certificate of Deposit Account Registry Service (CDARS), a deposit-placement service that allows deposits with member institutions to be eligible for full FDIC insurance of up to as much as $50 million.    

    More for Mission Leadership Committee member, W.K. Kellogg Foundation, has deposited $22.4 million in community banks and credit unions—part of their “mission-driven” commitment (See W.K. Kellogg press release).  Carver Federal Savings Bank and ShoreBank, the largest CDFI, are among the seven selected banks.  

     

    posted 3:45PM 01/13/2009 by Lisa Hagerman

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