Hey everyone! In the mode (a little bit) of a State of the Union address, below is a State of the SIT posting. It is also available in a more elegant PDF format here (although the links won’t be live).
State of the SIT
I. Lessons and Events From First Semester
A. Microfinance Simulcast is wrapped up. It was great to hear from Professor Sean Foote about the challenges, opportunities, and developments ongoing in the field of Microfinance.
1. Stocks and Bonds and Social Performance
- Traditionally, individuals can invest in stocks or bonds. The tricky thing about making investments that have a social impact using stocks and bonds is that individuals are not affecting the flow of capital to companies in purchasing stocks, and are rarely able to buy primary bonds that do provide capital to actual companies. In buying stocks and bonds, then, investors can use shareholder advocacy to encourage companies they have a stake in to perform responsibly, or can avoid companies that behave poorly to try and change incentives so that social responsibility is encouraged.
- In beginning to look at socially responsible stocks and bonds, we used The Global Impact Investing Rating System (GIIRS) to look at mutual fund ratings (http://giirs.org/for-funds/get-rated-funds), and the GIIRS’s listing of “B-Corporations” who post information about social performance (http://www.bcorporation.net/community/search).
2. Non-Traditional Social Investments
- The Social Investment Team, however, also sought out non-traditional investments, outside of stocks and bonds, which might give individuals a chance to promote social goals a little more directly.
- We identified several opportunities including: securities notes supporting microfinance institutions, security notes supporting community banking, and peer-to-peer lending.
- New! From Winter Break: In researching several of the securities supporting microfinance institutions, we found that all of the ones we had identified were available via microplace.com in 20 dollar increments.
Summary of where that leaves us: we can use microplace.com to provide capital to microfinance institutions, prosper.com to make peer to peer loans, and the Calvert Community Note to provide capital to community banking.
3. Outline for Second Semester
January 12th– Introduction to the semester, brainstorming
Meetings 1-3- Simulate investment in microplace, go over prospectus as a group
Work at home: Pick a different prospectus and see if you have any questions not answered from the prospectus that is covered by the group.
Meetings 4-5- Split up into two groups. One group simulates investment in prosper.com, and one simulates investment in the Calvert Community Note.
Meeting 6- Brainstorm group fund, distribution of information
Meetings 7-13- Work on getting group fund funded, put up blog/distribute information about non-traditional social investments.
Ideas from first semester that could be used in Future Yearsà
- Microfinance consulting project
- Interview wealth management firms to find out about their social options
- Use GIIRS to outline ways to use stocks and bonds to promote social performance.