Some foundation executives draw a clear distinction between social investing in their own behalf and in behalf of the organizations they lead. For example, take the heads of two well-known foundations, Steven Schroeder of Robert Wood Johnson and Karl Stauber of Northwest Area, who shared their thinking on this with FN&C. In their own words:

Schroeder: "At Johnson, we have placed a few investment areas off limits: alcohol, tobacco, and more recently, handguns. In doing that, there was no dissension at all among our trustees. We have occasionally run into issues in seeing that those guidelines are followed. When an outside manager of some of Johnson’s holdings picked a mutual fund containing tobacco stocks, we discharged the manager.

"But although we’re in a lotof funds, not one of them is labeled ‘socially responsible.’ I am personally involved in a couple of those, and in my experience they’ve tended to under-perform the market. So with the exception of the investment areas I mentioned, I would not favor putting Johnson assets into those funds. The foundation’s bottom-line interest—making money for the grants program—drives its investment policy, and that’s as it should be."

Stauber: "I invest as an individual in ‘social’ funds, and there I’m willing to trade return for a social purpose. At the foundation, there have certainly been discussions about social investing. We haven’t pursued it because, as we’ve looked at the track record, we haven’t seen suitable financial returns. Until we do, we’re not likely to follow that course."