Primate's Fund approves new standards for reserve fund investments.

The Primate's World Relief and Development Fund (PWRDF) board of directors has approved in principle the adoption of a mission-based investing (MBI) approach to its reserve funds that are being held in long-term investments.

The board will strike an investment committee this winter to formulate strategies on how to implement this investment approach, which would incorporate PWRDF's mission into its investment decisions, according to Jill Martin, PWRDF finance coordinator. The committee will submit its recommendations to the board in May 2005.

PWRDF currently has $2 million in reserve funds, plus another $300,000 in endowment funds provided by a donor who has stipulated that the donation be invested for a certain period of time before it can be used by the organization. General Synod (the national office of the Anglican Church of Canada) also recently transferred to PWRDF $419,500 from the Freeland Estate and $18,700 from the Toase Estate, which it previously held in trust and invested in its Consolidated Trust Fund.

"We have to invest this money for the remainder of the term because that was set up in the will," said Ms. Martin. "We have a choice to either let it grow or we're allowed to use the interest from that." PWRDF may not cash the principal from this estate and use it for programs until after the maturity date set by the donor.

Ms. Martin said the reserve funds would enable PWRDF to honour its commitments to partners in case it loses funding from its donors.

Ms. Martin said that while PWRDF is currently able to set guidelines regarding the investment of its funds, which are being managed by Bank of Montreal's Harris Trust, the board realized that it needed a clearer strategy on how investment decisions are made. "You can't just come along and say, 'sell our shares in that company. It's too piecemeal," she said.

How does mission-based investing work?

* Screening out companies that contravene an institution's mission (e.g. companies that pollute, manufacture weapons engage in child labour) in preference for companies that do good work (e.g. promote empowerment of women, support the environment). "It's by a reward system," said Jill Martin, finance co-ordinator of the Primate's World Relief and Development Fund (PWRDF).

* Shareholder action or advocacy, which could mean attending meetings of corporations where an institution has an investment, engaging stockholders in dialogue, influencing corporate behaviour. "It's saying, we own that stock so we have a right to vote," said Ms. Martin. PWRDF will co-ordinate its efforts with Kairos, the Canadian ecumenical social justice organization, which is responsible for developing strategies related to aligning churches' missions with their investment policies and practices.

* Community economic development or alternative investing. This involves investing in organization that do work in developing countries or give micro-finance loans to marginalized sectors.

* Social venture capital, coming from labour-sponsored investment funds that are committed to integrating social and environmental criteria into their investment decisions.

Ms. Martin said MBI is different from the concept of socially responsible investment or ethical investment, which merely screens out investments. MBI "is a concept of using all your assets in the pursuit of your mission," she said.

Ms. Martin allayed fears that adopting MBI won't yield competitive results for PWRDF funds. The principles of MBI, which has been adopted by the United Church of Canada, has proven "that in many instances, if you're not actually better off, you're certainly not worse off," she said.