Rockefeller Foundation financing nonprofit ETF startup

Written on Aug 03, 2017

The Rockefeller Foundation is helping to finance a startup hoping to build exchange-traded funds for nonprofit organizations and direct the profits back to their causes.

The foundation awarded a $300,000 grant to Impact Shares Corp, a Dallas-area organization that aims to offer charities the ability to create ETFs that will be sold to the public.

ETFs give investors the ability to buy a basket of stocks or other assets with a single trade. Many of the funds track a broad market index, rather than trying to outperform.

Charities working with Impact Shares would include in their ETF whichever companies perform well on the environmental, social or governance (ESG) criteria that matter most to them. For instance, a veterans organization might support companies with policies to hire people who have left the military.

The goal is to create a fund that will perform roughly in line with the broader market.

Wall Street is increasingly championing ESG in an effort to appeal to younger investors and institutions like university endowments that want to align their portfolios with their values. U.S. fund managers have launched 22 "socially responsible" ETFs over the last 12 months, up from 13 a year ago and just five the year before that, according to FactSet Research Systems Inc.

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