'Green' Funds Nurture Sales Through Alternative Press
While most financial advertising tends to focus on investment performance and top-flight service, a handful of mutual fund companies and banks are trying to set themselves apart with "socially conscious" themes.
The target: investors who want to support environmental, political, or other social goals.
For South Shore Bank, a community development bank based in Chicago, the strategy means advertising outside the mainstream - in the Sierra Club's Sierra magazine; the quarterly publication of Co-op America, a clearing house that promotes alternative lifestyles; and the Utne Reader. An ad for the bank in a recent issue of Sierra sports a tag line with a double meaning: Invest for higher return.
'Taking a Stand'
"I think people are just becoming more cognizant of how their money is being used, and taking a stand on it," said Linda Schwartz, a marketing manager for the Chicago bank. Ms. Schwartz said she gets the best response from ads in Building Economic Alternatives, the Co-op America publication, and Utne Reader, a digest of the alternative press.
These readers are "liberal, they're educated, they're concerned, they have personal investments," Ms. Schwartz said.
Socially responsible investing, including so-called green funds, is not a new concept. But it has gained favor in recent years, and financial institutions are slowly catching on to its appeal. Environmental causes are especially popular. Puget Sound National Bank, Tacoma, Wash., has won ad industry awards - and market-share points - for its tie-ins with clean-water programs.
Dollars Flow to Causes
The Social Investment Forum, an association based in Minneapolis, estimates that in the United States $625 billion is invested according to some social consideration, up from $500 billion at yearend 1990, $450 billion at yearend 1989.
"This particular area of socially responsible investment management is perceived as being a growing area," said Doug Salvati, vice president of socially responsible investment management for Shearson Lehman Advisors Investment Management. His group oversees about $50 million in investments for private clients and small companies.
Publications on the environment and current affairs run ads for mutual funds alongside others for trips to the Amazon and hiking boots. Most mention the environment, others others appeal to antinuclear or antiapartheid sentiments.
An ad for the New Alternatives Fund, based in Great Neck, N.Y., asks, "Which mutual fund knows the difference between acid rain and the greenhouse effect?"
One for the Working Assets Money Fund of San Francisco says: "We invest only in companies that have proved themselves to be responsible, both financially and socially. They must have a record of caring for people and the planet. So we carefully screen out oil companies, weapons contractors, and anyone else that ill-treats resources, human and environmental."
Says Joan Kanavich, executive director of the Social Investment Forum: "People are suddenly becoming aware that this is not just a fad or a trend."
About 15 mutual funds and money market funds make the social responsibility pledge. A handful of financial institutions are devoted to community development or alternative investments, including South Shore Bank, Alternatives Federal Credit Union in Ithaca, N.Y., and Community Capital Bank in Brooklyn, N.Y.
Community Capital does not advertise, relying instead on coverage in news media to attract deposits. South Shore Bank spends about 20% of its marketing budget to lure community development deposits.
The New Alternatives Fund, with $23 million in assets, spends about $10,000 a year on advertising.