Socially responsible funds can express ones Jewish values

In the same manner that she shops for locally grown produce, Abigail Weinberg chose to sidestep the bank behemoths and instead 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 said.

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 (JFSJ) launched its Community Investment Initiative, a socially responsible investment program aimed at modest investors, less than two years ago, Weinberg was one of the first investors.

Weinberg, who used to work at the Shefa Fund before it merged with the Jewish Fund for Justice, considered her $2,000 investment “an expression of the Jewish value of tikkun olam,” or repairing the world.

As the green movement continues to gain ground within the Jewish community, many investors are re-examining their portfolios with an eye toward not only financial gains but also social impact.

Bernard Madoff arrives at federal court in New York City on March 12, 2009. The Madoff scandal and other economic factors have made investors more open to the idea of socially responsible investing. photo/ap/louis lanzano

Until recently, however, only Jews of high net worth or institutional investors like pension boards, federations and family foundations had access to uniquely Jewish avenues for ethical investing. This left individual social justice activists and even Jewish communal professionals such as Jeremy Burton, senior vice president of philanthropic initiatives at the Jewish Funds for Justice, out in the cold.

For more than a decade, JFSJ has leveraged more than $30 million in loans through the Tzedec Economic 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.

Tzedec 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, JFSJ partnered with the Calvert Foundation to launch the Jew-

ish 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 already has been invested through this program.

“It’s nascent, but it has a lot of potential as a vehicle for smaller investors,” Burton said, adding that he has invested his own money in the fund.

Socially responsible investing, also known as ethical investing, has seen a boon in recent years.

One of every nine dollars under professional financial management in the United States is involved in socially responsible investing — investments that take into consideration not just the financials but also the social and environmental consequences of investments.

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.

The Jewish community has been an active force in the world of community investing, a form of socially responsible investing 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 investing among its membership. And, more recently, the URJ has encouraged congregations 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 organization to join the Interfaith Center for Corporate Responsibility.

“The awareness of our financial industry’s relationship to real people on the ground is heightened in a way it hasn’t been in years,” Burton said. “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.”

In light of the stock market losses of 2008 and the Bernie Madoff investment scandal, individual investors are increasingly 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 responsibility,” Burton said.