Crain News Service
CHICAGO -- Some of the biggest names on Chicago's LaSalle Street are joining forces in a coordinated push to boost social investment in the Chicago area -- an effort that's running on parallel tracks with a social responsibility program launched last year by the Rev. Jesse Jackson.
Backing the new effort are more than 70 of the city's leading financial firms and philanthropic groups, including representatives of ABN AMRO Inc., BankAmerica Corp., Bank One Corp., Ariel Capital Management Inc., Everen Securities Inc., the John D. and Catherine T. MacArthur Foundation, McCormick Tribune Foundation, Salomon Smith Barney Inc., Scudder Kemper Investments Inc., Stein Roe & Farnham Inc. and the Woodstock Institute.
Conspicuously absent from the ranks of the new group -- dubbed the Social Investment Forum of Chicago -- are the Rev. Jackson and the Rainbow/Push Coalition's LaSalle Street Project, formed last year to promote minority employment and business opportunities in Chicago's financial industry.
"It's enlightened capitalism," said Jason Saul, a co-founder of the Social Investment Forum and an attorney with the politically connected Chicago law firm Mayer Brown & Platt. "The market is what prevails. But the market doesn't have a conscience -- and we're trying to give it one."
The LaSalle Street Project "blazed the trail for trying to think about how downtown, heavyweight institutions can work to promote a socially responsible agenda," said Mr. Saul. "We're all headed in the same direction."
The Social Investment Forum's agenda is similar to the Jackson group's, which aims to prod corporate Chicago to invest in minority-owned firms and boost minority hiring. (Both Mr. Jackson and Darice Wright, head of the LaSalle Street Project, were traveling and couldn't be reached for comment.)
But the two groups' goals aren't mirror images. And aside from informal talks, the two groups haven't seriously discussed joining forces.
"Rainbow/Push has been more focused on economic inclusion and wealth creation within the minority community," said Mellody Hobson, senior vice-president at Chicago-based Ariel Mutual Funds Inc., whose parent company, Ariel Capital Management, supports both efforts.
"Social Investment Forum has a broader mandate."
The forum aims to create social change through the capital markets. It is developing a citywide campaign to promote socially responsible investing, and ultimately aims to create its own fund to invest in community development and socially responsible local ventures, said Mr. Saul. He co-founded the forum with Trinita Logue, president and chief executive officer of the Illinois Facilities Fund, a $38 million organization that underwrites loans in disadvantaged communities.
The forum also is bidding to make Chicago investors active in the growing social-investment movement, which advocates seeking a "double bottom-line" return on investments: strong financial performance coupled with some social good, Mr. Saul added.
Forum founders maintain they can make a difference, even though efforts a decade ago to raise investor awareness in Chicago fizzled.
"Over the past 10 years, this has become a lot more accepted as a mainstream business strategy," said Ms. Logue. "It's not something that's an outlier any more."
Indeed, social investment is big business. Roughly 10% of mutual funds, controlling about $1 trillion in assets, screen investments using some socially oriented criteria. And about $7 billion is invested in 59 socially responsible mutual funds, which typically shun weapons manufacturers and tobacco companies and invest in companies that are pro-environment or promote the hiring of women and minorities.
"We've seen the democratization of the stock market, with so many people investing," said Edward Powers, Chicago-based senior vice-president for community development banking at Bank of America. "This is the next step, where people have a voice in what corporations do socially."
The Social Investment Forum plans to make its first formal appearance Sept. 28, when it hosts a lecture by Amy Domini, president of the Boston-based Domini Social Equity Fund.
Beyone that, he group would like to create some sort of clearinghouse, providing information on investment opportunities to individuals and money managers, but stopping short of rating mutual funds.
