Doing Good By Doing Well

Two new exchange-traded funds help you invest in good turns

It’s commonly accepted wisdom among those who steer the ship of corporate philanthropy and good works that you can “do well by doing good.” In other words, profit can come from investing in socially responsible companies and organizations. But you can also do good by doing well, by investing in companies that have a positive impact on society, and using the profits from those investments to drive more change. That’s what a new 501(c)(3) nonprofit, Impact Shares, is doing, via two exchange-traded funds (ETFs) launched in concert with two organizations working for change, who will benefit from any profits generated by the organization’s management of the funds.

The two Impact Shares ETFs (more are on the way) have been launched in partnership with the National Association for the Advancement of Colored People (the NAACP) in one case, and the YWCA in the other. Both organizations help set the criteria for the companies in which the funds will invest.

Sometimes, financing a good turn is as good as doing one

Impact Shares’ NAACP Minority Empowerment Fund (NACP on the Nasdaq) includes companies that fit the NAACP’s vision of good corporate citizens, that the organization feels advance the cause of racial justice and equality. The fund is designed to track the Morningstar Minority Empowerment Index. All net advisory profits from management of the fund will be donated to the NAACP, whose original legal counsel, Thurgood Marshall (pictured above) was the first African-American justice on the U.S. Supreme Court.

Similarly, Impact Shares’ YWCA Women’s Empowerment Fund (WOMN on the Nasdaq) includes companies that align with the YWCA’s vision of how corporations can advance women’s empowerment and gender equality. It is designed to track the Morningstar Women’s Empowerment Index. Net advisory profits from that fund will be donated to the YWCA.

“Impact investing” has become a popular buzzword in recent years. While Good Turns is all in favor of raising the profile of initiatives designed to do good in the world, it’s also good to see an organization put its money where its mouth is. More and more organizations are doing so these days, and one place to find many of them will be at a conference called SOCAP 18, being held in San Francisco, October 23-26. There, business leaders, philanthropists, nonprofits, and many more organizations will meet to consider ways the world’s capital markets can help drive social change.

B Lab, an organization that advocates for and supports public benefit corporations (companies that have a public benefit as part of their corporate mission, in addition to things like profitability and shareholder value), listed no less than 28 funds in its Best for the World Funds list last year, and has 203 companies on its Best for the World Changemakers list released earlier this month.

So if you’ve done well this year, consider doing some good by investing in a company or a fund that is committed to promoting change. Voting with one’s cash is one of the most powerful ways to show the world just what kind of good you’re interested to see more of. Sometimes, financing a good turn is as good as doing one.

Posted September 21, 2018