Putting money where beliefs are
THE VINDICATOR, SUNDAY
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- Louise Lefkort believes in giving back, so when she makes investments, she looks for companies that share her philosophy.
A Warren resident, Lefkort is part of a growing trend known as socially responsible investing. Proponents screen companies before they invest based on how they treat their employees, their communities and the environment.
The idea, Lefkort explained, conforms with a Judaic principle that calls for "healing the world."
"Judaism teaches that God left the world unfinished," she said. "It's up to us to do what we can to make it better."
What she does: At 72, Lefkort is already doing her part. She's a member of the League of Women Voters, works part time for a Liberty Township tax preparation business, and is active in Rodef Sholom Temple and First Unitarian Church of Youngstown.
Even the long-distance provider she chose reflects her activist views. The company offers subscribers a limited number of toll-free calls to state and federal lawmakers and encourages customers to add a few dollars or cents to their payments as a contribution to charitable causes.
In investments, Lefkort is most interested in supporting companies or agencies that are contributing to the Youngstown-Warren area through community development. She'd like, for example, to have a hand in efforts to build rent-to-own housing for low-income families.
"If everybody would invest just a small amount in work like that, it would make such a difference in what they could accomplish," Lefkort said. "The whole point is to give your community a leg up."
Labor advocacy: Bob Moore, an attorney who specializes in labor law in Youngstown and represents several area labor unions, said he's been practicing socially responsible investing since 1984.
Not surprisingly, he carries over his passion for workers' rights and unionism into his investment practices.
"I'm interested in human rights, labor issues, environmental issues," Moore said. "I don't want to invest in a company that discriminates against women or minorities or treats its employees unfairly."
He avoids companies that have "anti-union" records, he said, or that show a pattern of losing cases before the National Labor Relations Board. When apartheid was a policy in South Africa, he refused to invest in companies doing business in that country.
And yes, the 54-year-old Canfield resident said, he's made money.
"I certainly look at the rate of return, obviously, and I look for the type of investment that suits my needs," he said.
"I don't think the rate of return has suffered at all. In fact, there are studies that show the opposite. Humane, socially conscious policies make good business sense."
Moore applies what economists call "social screening" to a significant number of his investments, but not all.
Mutual funds: Rather than investing in individual stocks, he said, he usually prefers mutual funds composed of companies screened for human rights and ecology policies.
By choosing from mutual fund groups designed for socially and environmentally responsible investors, he said, he can generally be assured that companies are screened for social, community and environmental performance.
Shareholder activism is encouraged. When a company does something "offensive," Moore explained, shareholders can try to change it by using their proxy votes -- if no change is made, the company can be dropped from the fund.
The environment: Environmental responsibility is important to Lowell Satre of Youngstown. A member of the Sierra Club, a grass-roots environmental advocacy group, he also keeps informed on the environmental performance of companies with which he invests.
Satre, 59, a history professor at Youngstown State University, said he's not an active stock trader, preferring to hold most of his investments long-term. He has occasionally rejected his financial adviser's recommendations or traded a stock because of environmental or other concerns.
He's also supported several stock owner petitions asking company boards of directors to make changes. "I almost always support them, although of course I read them over carefully," Satre said. "I usually find that anybody who's gone through that much trouble has done a tremendous amount of homework."
Most stockbrokers can provide a list of mutual fund families that meet the criteria of socially and environmentally responsible investors, and several groups advocating the practice provide company and mutual fund lists and other information online.
Companies can be screened for positive or negative factors.
Negative screening would eliminate companies that make products such as tobacco or weapons, or which have shown a pattern of objectionable behavior, such as environmental damage or worker abuse.
Positive screening selects companies which exhibit proactive policies on employee, community and environmental matters.
Upswing: Interest in the socially responsible investment philosophy is growing. The Social Investment Forum, a nonprofit Washington, D.C., group, reported that such investment accounts under professional management grew 36 percent from 1999 through 2001.
The group's 2001 Trends Report found that socially screened portfolios surpassed the $2 trillion mark for the first time last year, up from $1.49 trillion in 1999.
Community investing is the newest and fastest-growing form of responsible investing. The forum's 2001 study indicates that assets held and invested locally by community development financial institutions in the United States totaled $7.6 billion in 2001, up 41 percent from 1999.
Steve Schueth, a Forum spokesman, said no studies have been done to determine where socially responsible investing is most common. He's observed more interest in college towns where a large percentage of the population is educated, and in "relatively progressive" communities such as San Francisco, Boston and Boulder, Colo.