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Approved February 19, 2000
Introduction
The
Friends Committee on National Legislation and the FCNL Education
Fund (hereafter FCNL) is committed to using prudent investing
as a means of furthering our social, ethical, and political
goals. This commitment extends beyond mere avoidance of companies
whose policies we find objectionable; it emphasizes a positive
search for corporations whose economic behavior reflects elements
of our vision of a better world. This positive search can be
pursued without forfeiting investment performance. Indeed, we
believe that in the long run ethical companies make better
investments.
This
commitment is especially important to undertake in today's culture
which encourages investors to become disconnected from the uses
to which their money is put. We believe all citizens should
consider how their money is being invested and should renew
their connection with their money. The FCNL and the FCNL Education
Fund commit themselves to being a part of this process, and
we encourage participation with us in refining our investment
policies.
Sources
and Management of Funds
FCNL
receives funds in many ways from many different groups of donors.
General funds for immediate use come from annual contributions
and bequests. Because of the uneven flow of funds, there is
always a balance of working capital that must be managed to
produce income. There are several forms of deferred giving that
produce funds held in trust which must be managed for the benefit
of the donors and FCNL. A small endowment fund is invested to
support designated programs both now and in the future.
FCNL
is committed to sound financial practices including ethical
fund-raising procedures, effective budgeting, accounting practices
that meet all nonprofit standards, and careful spending to
obtain full value from each contribution for the benefit of
its programs. Careful investment is also necessary to properly
manage contributions in order to maximize the opportunity and
potential for good that are intended by donors.
General
Investment Considerations
FCNL
manages its investments in a manner intended to produce income,
preserve the funds, and enhance their purchasing power to the
maximum extent while using prudent financial methods and observing
the socially responsible guidelines appropriate to a Quaker
organization.
We
give attention to diversification, financial soundness of companies,
market risk, and other technical factors, and seek to minimize
speculative motivation. We seek companies and investments that
promote socially useful goods, services, and economic activity.
We seek to avoid companies that do not have a superior record
within their industry of meeting their obligations to society.
We acknowledge that companies as well as individuals are not
perfect and that we should recognize both the good and bad aspects
of their operations in making our investment decisions.
Efforts
to influence the behavior of corporations is not a primary function
of our investment practices, but such influence may occur incidentally in the
process of making inquiries regarding social responsibility.
It is not a goal of the investment activity to use FCNL funds
to support any other organizations.
Social
Responsibility Considerations
A. FCNL seeks investments in companies providing goods and services
that people and peacetime industry need by way of food, medicine,
clothing, housing, heat and light, transportation, communication,
recreation, and som on--all the needs of everyday life.
B. FCNL seeks investments with companies committed to a peaceful
world. It is the policy of FCNL to avoid investments in any
company that develops, manufactures, or profits from products
in the general category of weaponry, including chemical and
biological warfare, nuclear weapons systems, antipersonnel
weapons, small arms, and goods for the automated battlefield.
FCNL avoids investing in corporations that support or profit
from the export of arms, and companies that contribute to the
rising number of street guns. FCNL will take special care to
avoid major defense contractors or suppliers and, in most cases,
companies with total military contracts over 2 percent of sales.
C.
FCNL seeks investments that support the conversion from military
production to civilian services and products. In examining such
companies, we will consider the attitude of management to military
contracts, their total amount and the percentage of sales they
represent, the type of materials and services contracted for,
and the direction of the company toward increasing or decreasing
military involvement.
D. It is FCNL's policy to avoid investing in companies primarily
involved in products or services of limited or questionable
social value, such as intoxicants, tobacco, gaming, items of
conspicuous consumption, or land speculation.
E. In judging investments, FCNL seeks companies that have a superior
rather than an inferior record within their industry in the
following areas:
(1) environmental enhancement, conservation, and pollution abatement;
(2) personnel practices demonstrating respect for civil rights
of all and commitments to affirmative action hiring and to
internationally recognized labor standards;
(3) health and safety of employees;
(4) general business practices, including advertising and financial
practices;
(5) disclosure to their stockholders of information on business
and social responsibility practices;
(6) recognition of the rights and cultures of native peoples;
(7) relations with unions and with worker organizing committees;
(8) ownership and leadership by persons from underrepresented
groups (women, minorities, etc.); and
(9) long-term commitment to communities and sustainable employment.
F. Because of differences in culture and values, it is difficult
to make judgments about companies with international operations.
Within this caveat, we will take into consideration whether
the foreign operation of a corporation (1) benefits the host
country, (2) is consistent with the local culture, fosters human
dignity, and respects human rights, (3) avoids unnecessary depletion
of resources of the host country, and (4) is sensitive to the
aspirations of that country. Absolute size of the operation
relative to the economy of the host country will be a factor.
G. FCNL seeks investments that promote sustainable development
in the United States and in Third World countries. We seek investments
that support genuine progressive social change in developing
nations, and that support transitions to more democratic and
free societies.
H. We seek to support companies committed to the development of
alternative energy sources.
I. FCNL may hold bonds of U.S. government agencies. We will not
hold U.S. Treasury bonds, which may be used for military spending.
J. FCNL seeks to invest in companies dedicated to the development
of a global code of conduct for corporations, as outlined by
the United Nations.
Monitoring
Most
corporations have uneven performance records under any social
responsibility criteria. They can be good in some areas and
not acceptable in others. This is compounded by the complexity
of many of the larger corporations which have multiple lines
of business and which operate in many different locations and
settings around the world. Anyone will encounter some difficulty in acquiring all the necessary detailed information in order to
apply our guidelines, and the amount of staff and committee
resources available is limited. For all of these reasons, it
is unlikely that FCNL social responsibility goals in investments
will ever be totally accomplished. However, we are committed
to continued progress toward these goals.
The
FCNL Finance Committee, in addition to its ongoing discussions
of social responsibility as individual investment choices are
made, annually reviews the list of FCNL investments and investment
guidelines at its first meeting of the calendar year. The FCNL
Executive Committee and the FCNL Education Fund Board review,
and revise as needed, these guidelines at their first meeting
following the adoption/revision of the FCNL Statement of Legislative
Policy by the FCNL General Committee.
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