by Julie Hammerman
After completing a two-year fellowship on Jewish values supported by the generosity of the Wexner Foundation and the East Bay Federation, I started JLens last year to encourage more investment for social good in the Jewish community. JLens consults with Jewish institutional investors (federations, foundations, endowments, pensions, nonprofits) to develop collaborative dialogue on investment strategy between the programming and investment teams. We help organization’s meet financial goals while leveraging investment capital to support a variety of missions including education, healthcare, poverty alleviation, the environment, Jewish life and Israel. In Israel we are encouraging an ecosystem so impact investment capital will deservedly flow to socially beneficial Israeli innovation such as renewable energy, sustainable agriculture, healthcare, education and technology for developing countries.
Given the Jewish community’s dedication to social justice and environmental preservation, values-aligned impact investing should be a perfect fit. Christian denominations have practiced values-aligned investing since the Quakers and the Methodists eliminated ownership of certain business sectors in the 1800s. Islamic Finance has risen dramatically to $1.35 trillion according to last year’s Global Islamic Finance Report. Signatories to the UN’s Principles for Responsible Investing represent $34 trillion, or 15% of the world’s investable assets. Values-aligned investing is now mainstream due to improvements in investment options, performance and information, as well as the realization that environmental, social and corporate governance (ESG) factors are important considerations for future financial performance. Additionally, there is growing recognition that philanthropy and government spending alone will not solve society’s biggest challenges, and investment capital can sometimes make up the shortfall when market solutions exist.
While the term ‘impact investing’ has become quite popular in philanthropy, it is a new term for an old concept dating back to the Torah. Impact investing, also known as values-aligned or socially responsible investing, is the deployment of investment capital with both an expected financial return and a positive social or environmental outcome. One of the best examples in the Jewish community of investment capital used for social good is the subject of JLens’ first case study, entitled “Geraldo, Cerebral Palsy and the S&L Crisis: An Unexpected Recipe for Investing with Jewish Values.” For the past two decades, approximately 200 nonprofit organizations have benefited tremendously from over $300 million in loans provided by FJC, a donor-advised fund organization based in New York, and the affiliated family foundation’s use of program-related investments (PRIs). This case study highlights one of many paths available for aligning investment capital with Jewish values to increase the resources available to achieve philanthropic goals, without sacrificing financial returns.
Julie Hammerman is the founder of JLens, and an expert on values-aligned impact investing with a background in traditional finance and social enterprise. You can reach her at [email protected] or visit jlensnetwork.org to download a copy of the case study.