Here’s this weekend’s article which comes from the New York Times. I haven’t finished reading it but wanted to link to it since it’s pretty long. Here’s a great quote that gives you some flavor:

“You run into fundamental problems in trying to grow good because neither for-profit nor nonprofit is set up to do what new entrepreneurs and others are trying to do — namely, harness the power of private enterprise to create social benefit,” said Jay Coen Gilbert, co-founder of B Lab, a start-up organization based in Philadelphia that will develop what he calls “B corporations,” which engage in fourth-sector pursuits.

I haven’t written about socially responsible investing in a while so I thought I’d link to two recent articles that I read:

First is this article written by David Kathman on Morningstar about socially responsible investing, (SRI) funds. This column does a really good job of summarizing the broad landscape of SRI funds.

Most secular SRI funds avoid alcohol, tobacco, and gambling stocks, but beyond that they vary quite a bit in the criteria they use, just as the religious funds do. That can be both good and bad. On one hand, there are lots of choices for SRI investors, but on the other hand, it’s hard for beginners to sort through all the options.

He follows by discussing several SRI focused fund shops and goes into detail on Calvert, Pax, and Walden. He also discusses social funds of more popular money management firms such as Vanguard FTSE Social Index, TIAA-CREF Social Choice Equity, and iShares KLD Select Social Index. Actively managed funds that are mentioned are Dreyfus Premier Third Century, Neuberger Berman Socially Responsible, and Legg Mason Partners Socially Aware.

The article is really in-depth and is probably the best summary I’ve seen on SRI mutual funds. If you have a sincere interest in SRI, you’ll benefit from reading the article and heading over to Social Funds to check out the resources there.

The second article I’m passing along focuses on socially responsible ETFs, or exchange traded funds, which are “open ended mutual funds that can be traded at any time throughout the course of the day” (via Wikipedia). This article is a nice addendum to the Kathman article.

Another excellent piece for this weekend’s reading– Venturebeat, a blog about new technology ventures, publishes a piece on social capitalism, its two basic models, and why some companies are likely to succeed while others are not. The post is written by Jay Parkhill, who is an attorney that works in the technology sector. Keep in mind that most Venturebeat readers are technology investors so Jay is writing for that audience.

According to Jay, the two basic models are:

1. Companies that seek to do good by capitalizing on our existing shopping patterns. Example: Ethos water.

2. Businesses that encourage consumers to spend money in ways they would not otherwise in order to create a social and/or environmental impact. Example: Terrapass, Kiva.

Read the article for the complete analysis and the pros and cons of each model.

This week’s reading comes from Business Week and is about social responsibility– the article discusses a U.N. initiative that was launched in 2000, called UN Global Impact, to promote socially responsibly business practices in the world. The program looked at social responsibility from a financial perspective and adopted principles for responsible investment. It currently has more than 3,800 participants in 100 countries.

Recently, the Global Compact decided to expand its efforts to the academic community and is in the process of developing a set of Principles for Responsible Business Education. In January, Angel Cabrera, president of Arizona-based Thunderbird School of Global Management was named senior adviser to the Global Compact and is heading the task force developing the principles, which are to be presented at a meeting in Geneva in July.

Check out the Business Week article for the full Q&A with Angel Cabrera.

The New York Times reports that Governor Eliot Spitzer has taken a page out of new school social enterprise philosophy and allocated more funds to the New York State education system but tied it to a performance-based system.

Gov. Eliot Spitzer of New York said today that he would allocate more money to the state’s public education system in his 2008 budget proposal, but he said the increased spending would be tied to better results from schools, educators and students.

I finally saved up a enough money where investing has become relevant to me. I know a bit about how the markets work, but I don’t know too much about Socially Responsible Investing (SRI). I’ll need a crash course, and for that, there is no better resource than Wikipedia. According to Wikipedia, Socially Responsible Investing is:

an umbrella term for a philosophy of investing by both financial and social criteria. SRI investors seek to align their personal values and financial goals by choosing to invest in companies and organizations displaying values comparable to their own.

The entry is pretty thorough and my main take away is that there doesn’t seem to be a clear definition as to what SRI really means, except “no tobacco or alcohol products.”

While there is no one standard of criteria across Socially Responsible Investing, most SRI mutual funds, whether conservative or progressive, employ screens that exclude companies that manufacture tobacco or alcohol products.

I googled “socially responsible funds” and have a bunch of links to look at but there doesn’t seem to be a definitive guide. I guess I’ll have to navigate this maze on my own. I’ll report back my thoughts and findings. I’ll probably start with the following links:

Information on Funds
SocialFunds- “The largest personal finance site devoted to socially responsible investing”

Social Investment Forum- “a national nonprofit membership organization promoting the concept, practice and growth of socially responsible investing ”

Calvert Online- “socially responsible mutual funds”

KLD- “an independent investment research firm providing management tools to professionals integrating environmental, social and governance factors into their investment decisions.”

Yahoo Directory of Socially Responsible Mutual Funds

Pax World Funds- “Socially Responsible Mutual Funds, Ethical Investing, socially responsible investing”