Charitable trusts, whether bound by the "prudent-investor" rule or the "business care" rule, are permitted to consider social and environmental factors when rendering their investment decisions. In fact, introducing ethical criteria into the investment selection process will not subject a fiduciary to liability as long as they make sound financial judgments and honor their duty to diversify.
Under the Uniform Management of Institutional Funds Act (UMIFA), fiduciaries who manage trusts are within their rights to consider the social implications of their trusts' investments, and to advance their trusts' purposes, along with those that protect the safety and pursue the profitability of the trusts' corpus.
Unlike traditional socially responsible investing (SRI), the Advocacy Investing® approach does not focus on exclusionary tactics. For that reason it does not jeopardize diversification, but creates customized portfolios based on the organization's unique mission.
To learn more, I invite you contact us to see how Advocacy Investing can benefit your charitable trust.
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