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SA committed to Socially Responsible Investing (part 2)

Socially Responsible Investing (SRI) has a long history in The Salvation Army that goes back to its Wesleyan theological roots (see GN! May 2014). We hope that part 2 of this 2–part series on the Army’s SRI policy will further your understanding of this important function in the Army as it explores the process.
The Salvation Army Eastern Territory’s portfolio management, investment objectives, investment philosophy, and performance, are based on its commitment to stewardship and to prudent investment of its financial assets. The territory, which is a member of the Evangelical Council for Financial Accountability, has a rigorous due diligence and asset allocation process for managing and monitoring its investments.

To accomplish this work, it relies on a professional staff, an investment consultant, approximately 35 investment managers, a board of trustees, as well as an investment oversight committee. These resources have helped the territory’s investment portfolio outperform its strategic benchmark for the past year and to generate positive returns—while remaining committed to its SRI guidelines.

The Army’s annual Investment Stewardship Report states, “We strive to maintain a diversified portfolio that will enhance long–term total return while avoiding undue risk; preserve the inflation–adjusted purchasing power of the assets; and provide the needed liquidity to support the operations of the territory’s programs and services. The Salvation Army Eastern Territory pledges to continue ‘Doing the Most Good’ with the financial resources it receives.”

“What sets the management of funds in The Salvation Army apart from fund management in other institutions is the purpose of our ministry of money…,” wrote Commissioner Barry C. Swanson, territorial commander, in an open letter to financial supporters, “…to faithfully manage the resources God has entrusted to us in the Eastern Territory in ways that help the local, divisional, and territorial commands to fulfill their goals … in their various programs and ministries.

“We invest the funds that are entrusted to our care in ways that are socially responsible and in compliance with The Salvation Army’s Socially Responsible Investment Guidelines,” Swanson continued. “We do not permit investments in companies that derive more than 10 percent of their revenue from the manufacture, sale, or distribution of alcohol, tobacco, gaming, munitions, or pornography.* We seek to invest in those companies and industries that support the building up of the human condition and positive living.”

The following diagram illustrates how The Salvation Army carries out its SRI policies on a daily basis.

by Warren L. Maye

* Editor’s note: in the previous article, contraception was listed as one of the business activities that the Army avoids. It actually maintains a neutral position on this issue. Also, omitted was the Army’s ongoing commitment to avoid holding securities in companies that are currently involved in severe environmental controversies.

 

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