Advocacy in the Gun Debate: Strategic Investing
It is hard not to be impacted by the young people from Parkland, FL and their actions and advocacy for safer gun laws. They have certainly been impressive. The March 24th March for Our Lives in Washington and throughout the U.S. will hopefully continue to influence this debate.
Several times since February 14th, I have asked myself the question “What can I do?” On the gun issue, history has shown that marching and advocacy efforts en masse have often had little impact due to the power of the NRA. Perhaps this time will be different.
The jury is still out whether the economic focus by companies that sell guns – Dick’s Sporting Goods, Walmart, and REI to name a few – that have changed the minimum age to 21 in order to purchase an AR 15 will have an impact. The same is true for airlines, hotels, and banks that are no longer offering financial discounts to NRA members.
I wrote to Scott, my retirement advisor, to inquire how much of my IRA – and the more than $500 million that their firm has under management – is invested in companies that manufacture guns. Like many firms managing retirement investments, they invest in a variety of Index Funds (Mutual Funds) that include many different companies. And they invest with the goal that their clients’ retirement funds will grow, and not to achieve social change through investing.
So during the past week, Scott had sent me a number of articles on socially responsible investing. And I am not alone in my questions. A recent article in Sunday’s New York Times business section was specifically about retirement funds that divest from gun stocks. Apparently, Blackrock, the owner of the I-shares exchange traded funds, is in conversations with gun manufacturers and is exploring creating funds that exclude gun manufacturers and retailers.
The field of socially responsible investing is growing. But the more screens you have, the more fees investors will incur. And the returns are often not as great. In terms of guns, how far do you go? No gun manufacturers? How about gun sellers like Walmart, Dick’s Sporting Goods, REI, even with their recent change in policy restricting all gun sales to persons over 21?
Scott also shared that they tell clients that when they buy various asset classes via index funds, it is likely to include stock in a few companies that clients don’t approve of. He suggests that they can calculate a rough percentage of overall returns from these companies and clients can use this amount as a contribution to gun control advocacy groups.
What about synagogue endowment funds? At the same time that many of us are calling our financial advisors about a “gun screen” to our retirement funds, shouldn’t Synagogue investment committees make similar inquiries to their investment advisors and consultants? I realize that not every synagogue has an endowment fund. But many do and are in differing amounts from $100,000 to several million.
Imagine if synagogue leaders came together to divest their endowment funds from gun manufacturers!
Such social change is not just on the backs of synagogue leaders and congregants. But a group of progressive minded organizational leaders can and should set the example. If such an action became contagious , the economic impact of other organizations following this lead – Teachers and Public Worker retirement funds, university endowments, even the Reform Pension Board (the retirement fund for Reform rabbis and other Reform synagogue employees), just to name a few – would be tremendous.