Beth El Hebrew Congregation in Alexandria has become the first congregational investor in a new “socially responsible” fund offered by the Reform Pension Board, a nonprofit that offers pension funds and other investments for the Reform movement’s clergy and staff.
In December, Beth El’s independently run Permanent Endowment Fund, which raises money for capital improvements and other synagogue needs, invested a portion of its holdings in the Reform Pension Board’s just-established Jewish Values Fund, which invests in equities based on the values of the Reform movement, according to Stephanie Berger, the Reform Pension Board’s communications director.
Evan Allen, the Beth El Permanent Endowment Fund’s chair, said that the fund’s investment strategy is a reflection of the congregation’s focus on social activism.
“Some companies do stuff that’s really good, and only part of it’s bad. Some companies do bad stuff and only some of it’s good. This is a perfect way for us to invest based on that,” Allen said. “Our congregation is really involved in social action and this is just another thing to support that.”
Berger said the Jewish Values Fund tracks an index called the MSCI ACWI, which is composed of stocks from developed and emerging markets. But it does two things that make it “socially responsible.” It screens for and removes stocks the Reform Pension Board deems anathema to the Reform movement’s values, like equity in tobacco companies, gun manufacturers or coal producers.
Second, it uses “tilts,” which weigh certain kinds of companies more heavily, like those working in clean energy or using progressive business practices. In this case, the fund also weights for companies that support or do business with Israel.
“It’s unique in that it’s a fund whose investments are specifically aligned with the values of the Reform Jewish
movement,” Berger said. “It’s a double-win.”
Because the Jewish Values Fund was launched in November, it has no meaningful track record. According to Berger, the fund was down more than 8 percent from when it opened at the end of November to the end of the December, but added that that was simply a reflection of the overall market’s volatility in December. The Reform Pension Board has not yet released the fund’s January numbers.
Allen hopes that Beth El will increase its investment in the Jewish Values Fund, but for now the endowment’s board wants to wait and see how it performs.
Beth El Hebrew’s Permanent Endowment Fund is worth over $1 million, according to Allen. The investment in the Jewish Values Fund is relatively small — a bit over its minimum investment of $18,000 — with the bulk of the endowment in traditional investment vehicles. Every year, it provides the congregation with about 3 percent in returns. In 2018, it helped with the synagogue’s mortgage and other capital needs.
In the past, the Reform Pension Board has offered retirement investments for Reform clergy and staff. All told, it manages more than $1 billion with over 2,700 plan participants, according to Berger.
In 1986, it divested from companies doing business in apartheid South Africa. In 1994, it removed tobacco companies from its portfolio. But recently, more investors have been asking for a fund that aligns specifically with certain values. According to an October report from the Foundation for Responsible Investment, about one in four dollars under professional management is in “sustainable, responsible and impact investing assets,” a 38 percent increase from 2016. Many “socially responsible” funds are too young to assess their performance against the market.
When Allen heard from a friend at the Reform Pension Board that they were starting the Jewish Values Fund and were going to take on institutional investors, he thought it’d be perfect. Allen said that kind of investing can get very complicated, so to have the Pension Board handle it made sense.
Beth El Hebrew Rabbi David Spinrad said, ultimately, the goal for his congregation’s Permanent Endowment Fund is to make money and strengthen the synagogue’s safety net. How it makes its money, though, also matters.
“The returns are competitive, which is important. It’s not tzedakah; we want to make sure we’re growing our money,” Spinrad said. “But we want to do it in a kosher way.”