sri - soc ent assoc 10-08 final ppt merged.pdf

GuidetoSocialResponsibleInvestment(SRI)&CommunityInvesting(CI)

Drew Tulchin Social Enterprise Associates

Whitman College Walla Walla, WA

Oct., 2008

AboutYou

Intros.Let’shearfromyou:•  Name•  FavoriteClass•  FavoriteHalloweenCostume,ever•  Interestthatbroughtyouheretoday

AboutUs

SocialEnterpriseAssociates

TripleBottomLinecompany.Anetworkofprofessionalsmakingcommunitiesbetterbyapplying

businessskills&sustainablepractices.INTERNSHIPSAVAILABLEwww.socialenterprise.net

DrewTulchin:• 15yearsprof.experience&MBA;8inSRI• Written50+business&strategicplans;effortshaveraised$12million+• ForPrismaMicrofinance,bizplanwinnerGlobalSocialVentureComp;

raised$1.2millioninprivateequity

Environmental Sustainability

Social Impact

Financial Performance

Outline

•  Background&definitions•  SociallyResponsibleInvestment(SRI)orSociallyMotivatedInvestment(SMI)•  CommunityInvesting(CI)•  GettingaJobinSRIfield•  Discussion

Questionsatanytime

Background&Definitions

DefinitionsTerminology  SocialResponsibleInvestmentorSociallyResponsiveInvesting(SRI) IpreferSociallyMotivatedInvestment

  CommunityInvestingorCommunityInvestment(CI)

  TripleBottomLine:Financial,Social,Environmental  The3Ps:Profits,People,Planet  DoubleBottomLine:Financial&ChooseOne

  CDFICommunityDevelopmentFinancialInstitution  MFIMicrofinanceInstitution

Note:ProfitisNOTadirtyword

SRIDefinedWhatissocialresponsibleinvesting(SRI)?Theactofdirectingonesinvestmentstowardsparticularfinancialinstrumentsand/orentitiesthatencompassperson/groupssocialandmoralvalues.

Whatdoessocialresponsibleinvestingachieve?Enactbehaviorchangeorencourageacertainbehaviorwithinanorganization/institution.Derivefinancialgainsthatalsogeneratemeasureablesocialimpact,communitygood,and/orenvironmentalsustainability.

Language&Jargon

Investor Language

SRI Investor Language

Maximize Profit Optimize the ‘3 P’s’: Profits, People & Planet

Bottom Line Results Triple Bottom Line Results

Profitability Performance

Language of returns Language of returns, impact & sustainability

History

History(SEEFAITHBASEDINVETSTINGHAND-OUT)

Okay,ModernHistoryatleast:WWI Anti-WarInvesting:Quakers,Memmonites1960’s Anti-VietnamWarInvesting,CivilRightsProtests,ConsumerProtection&Riots

1970’s Int’lDevel,CDCs(US),InnerCity,RalphNader1980’s DivestmentfromSouthAfrica, ‘RegularProducts’1990’s GreenProductExplosion

SomeTheory

ResearchIs(Mostly)ProResearchonSRI,CorporateSocialRespons.(CSR)&EnvironmentalSocialGovernance(ESG)issuesarepositiveforshareholders:

Indicesnowexistonit:•  DowJones’SustainabilityIndex•  FTSESustainabilityIndex

17studiesofSRI:(DowJones,Moody’s,Univ.)•  7documentedSRI>avg.marketreturns•  7showednolessthanavg.marketretuns•  3claimed<avg.marketreturns

IntersectionofReturns

Theintersectionbetweensocial&financialreturn

MorinoInstitute

Donation Investment

YieldCurve:Risk&ReturnTypically,investmenttheoryisthatgreaterriskshould=greaterreward.

Greaterrisk,buttakesomeoftherewardassocialreturnornon-to-youmonetaryvalue.

Lowrisk,butsmall,diversedeals=hightransactcosts

Return

Risk

IntersectionofReturns

Theintersectionbetweensocial&financialreturn

MorinoInstitute

Donation Investment

RISKWhatistheoptimalmatchingofrisk&subsidy?

PhilanthropySUBSIDY TheMarket

MostPRIsToday

GeorgePenick,RandCorporation

ContinuumofInvestmentRiskDonationsInvestment

SRI3LeggedStool•  ScreenedMutualFunds•  ShareholderAdvocacy•  CommunityInvesting

ScreenedMutualFunds

ScreenedFunds

SEEHANDOUT

ScreenedFundwww.socialinvest.org/resources/mfpc/screening.cfm

FaithBasedInvestments

FaithBasedFunds

Tzedec Fund

ShareholderActivism

ShareholderAdvocacy

www.socialinvest.org/projects/advocacy/resolutions.cfm

CommunityInvesting

CommunityInvestingCommunityinvestingisfinancingthatcreatesresourcesandopportunitiesforeconomicallydisadvantagedpeopleintheUSandoverseaswhoareunderservedbytraditionalfinancialinstitutions.

CommunityInvestingPro-Active

FastestgrowingSRIcomponentIncrease$5.4billion(1999)to$25billion(2007)

Goalof“1%orMoreinCommunityCampaign”SIFmemberstopushU.S.CIto$30billionby2010

Examples:InternationalMicrofinance,CDFIs,CommunityBanks,AffordableHousing&More

SEEHANDOUT

InternationalMicrofinance

InternationalMicrofinanceMarket

MarketConditions+/-150mill.clientsAvg.growth30%ayearlastdecade<10%oftotaldemandmet10,000MFIsworldwide;$10billiontotalcurrentportfolioInvestmentincreasing.$5billionnewmoneylast2yrs

GlobalMicrocreditDemand$300billion

GlobalMicrocreditSupply$10billion

InternationalMicrofinanceToday

+/-150millionclients(dependsonyourdefinition)80millionverypoor

<10%oftotaldemandmet$10billiontotalcurrentportfolioAvg.growth30%ayearlastdecade10,000MFIsworldwideInvestmentincreasing.$5billionnewmoneylast2yrs

Websites

StufftoLookatOnline

Prosper.comMicroPlaceFonkozeTheMixMarket

CommunityBanks

Shorebank’sEco-CD(WA)Carver(NY)Liberty(NewOrleans)Albina(OR)

JobStuff

JobsinSRI

Skills• Language,culture,int’ldev• Write,speak,present• Inter-personalskills• Figurestuffout• ProjectManagement• Specialize:getgoodat

whatotherscan’t

LikelyFirstJobs• PeaceCorps/VISTA• Admin.Support• ‘Backstopping’• Banking:retail,investment,corporate• Consulting• Marketing&PR• Fund-raising• Technology

PathtoSRIJobsPath• DirectGetajobw/anorgdirectly

• Mainstreamorgs.Geta‘regularjob’andthencrossover

• CommunityRouteWork‘inthetrenches’,foraCIborrowingorg,advocacygroup,etc.

Challenge• Fewjobs;highcompetition• Youareinexperienced

• Mightnotgoback• Incubationstrategy• Changefromw/in

• Don’talwaysgetrightskills• Becomemoreactivist

DiscussionQuestion

ForDiscussionAssumeyouhaveatriplebottomlineethicandinterest:Whichwillcreate‘moregood’:A) GoingtoworkforanorganizationdoingSRIfromthebeginning,andlikelytogetdecentpay

B) Working‘inthetrenches’everyday;donatingwhatlittleyoucanabovewhatislikelytobesmallincome

C) Goingtowork‘fortheman’,gainingseriousskillsthatyoucanthenbringbackto‘ourside’&earningthebigbuckstohavetheresourcestodonatelots

ForDiscussionAssumeIhavea‘regular’investmentthatprovidesadecentreturnofx%(let’ssay10%foreasymath),andanSRIinvestmentinthesamesectorwhichisknowntobe‘alittlelower’eitherduetomorevolatilityorslightlylowerreturns.Whichisbetter?:

A) GettheSRIoptionnomatterwhat,aslongasitpassesmyduediligenceandevaluation

B) Gettheregularinvestmentanddonatetocharitydoublethedifferencebetweenthetwoeveryyear

C) Buythe‘regular’investment,earnasmuchmoneyaspossiblefromit;thendonateittoaworthycause(alsoavoidingcap.gainstaxonit)

ThingsYouCanDoNOWSEEHANDOUT

Educate•  Learnaboutthefield.1millionemployeesneededAdvocate•  HelptomakethingsbetterinU.S.andworldwide.

MicroCreditSummit,AEO,CFED,NCRC•  1%forCommunityInitiativeInvest/Donate•  Evensmallamountscount!•  Placeyourassetsincommunitybanks•  UsetheproductsavailableVolunteer/Intern•  Soc.Ent.Assoc.year-roundoptionsavailable•  U.S.domesticopportunities•  MicrofinanceGateway,SIF,Idealist

PlacesToLearnMore

SocialInvestmentForumCommunityInvesting

ICCRSocialEnterpriseAssociates

Co-opAmericaGuidetoSRFunds

IndividualInstitutions:CenturyFunds,CalvertFoundation,CalvertGroup,etc.

Thanks Q & A

Discussion

Drew Tulchin Social Enterprise Associates

www.SocialEnterprise.NET drew@SocialEnterprise.NET

202-256-2692