Social Purpose Investing

Endowment Fund Pooled Trust

Fund A—a social purpose fund—is managed by the ELCA Foundation’s investment adviser, the Board of Pensions, in a manner designed to achieve attractive long-term returns for Fund A investors while considering the corporate social responsibility work of the ELCA.

Fund A’s social purpose program uses three strategies
The overarching investment goal for Fund A is to achieve economic success for investors while considering the  corporate social responsibility work of the ELCA. The Board of Pensions uses a three-pronged approach for addressing social and corporate governance issues: 

1. Positive social investments—These investments positively benefit communities while earning acceptable returns for Fund A investors.  

2. Shareholder advocacy—The Board of Pensions votes proxies, initiates shareholder resolutions and engages in corporate dialogue to motivate corporate leaders to act in the best interests of shareholders (i.e., Fund A investors).  

3. Social screening—Social screening prohibits new investments in certain companies whose business practices don’t meet the ELCA’s corporate social criteria.


Fund A supports positive change
Positive social investing provides a proactive way for Fund A investors to receive market-rate returns on investments that channel capital to underserved markets. Typical
investments may include securitized loans to promote community development, sustainable forestry, women and minority-owned businesses and renewable energy.

Shareholder advocacy supports shareholders
Through shareholder advocacy the Board of Pensions works to motivate corporate leaders to act in the best interests of shareholders. These shareholder advocacy efforts include three components:

  • Proxy voting—The Board of Pensions takes seriously its fiduciary responsibility to vote proxies. All proxy voting decisions are made solely in the best interests of investors and for the purpose of maximizing the economic value of the company involved.
  • Dialogues—Dialogue involves meeting face to face with corporate leaders. This method of interacting with companies is effective because it helps corporate decision makers understand why a proposed change has been requested. The Board of Pensions works in cooperation with other areas of this church to engage companies in dialogue.
  • Shareholder resolutions—If a company does not respond favorably to dialogue, the Board of Pensions may file a shareholder resolution. Shareholder resolutions appear on proxy ballots prior to a corporation’s annual meeting, giving every shareholder the opportunity to vote on a proposed change.

These efforts reflect a fiduciary responsibility to maximize value for Fund A investors.

Social screens support church values
Each year, investment managers for screened portfolios receive a list of companies that may not be purchased for the fund due to business practices that conflict with the ELCA’s corporate social criteria. Companies may appear on the list if they engage in aspects of these businesses:

  • harmful products or services like tobacco, distilled alcohol, pornography or gambling
  • those that research and develop nuclear, biological or chemical weapons; or manage U.S. government-owned facilities for such weapons
  • those with significant toxic waste releases, hazardous waste sites, and environmental penalties or liabilities; and major producers of toxic chemicals

In collaboration with its social criteria consultant the Board of Pensions researches and evaluates thousands of companies in the process of determining which companies should appear on the list.


Disclosure Statement Availability
To receive a Disclosure Statement containing more complete information, including expenses, risks and an application form, please call the ELCA Foundaiton at 800/638-3522, ext. 2970. Please read the Disclosure Statement carefully before investing.

Disclaimer
The statements enclosed herein do not constitute an offer to sell, or a solicitation of an offer to buy, to any person in Mississippi or Vermont.