Here are my criteria:

  • I'm looking for a passive investment
  • Low risk/proven concept
  • I accept a low roi. If I can beat inflation, that's enough
  • I wish to put the money where they are actively doing good in the world. Ethical investment policies, like "we promise not to invest in arms or drugs" is not enogh.

Options I have considered is a share in a solar park and Kiva. I have not found any good options for solar-parks and Kiva has zero interest. That will result in me losing value, which is unacceptable.

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    Have you researched microlending? An impoverished family borrows a small amount to buy some piece of equipment that can get their business profitable, enough to survive and pay off the loan. Commented Apr 25, 2014 at 11:51
  • Yeah, kiva is an example of that, but I would like to have atleast a tiny ROI. Commented Apr 25, 2014 at 12:44
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    Any answer to this would be highly dependent on what you consider "good". One person might say that it is good to invest in factories in poor countries to help improve the people's standard of living, while another would call for laws restricting building of new factories to save the environment. One might call for campaigning against abortion or homosexuality while another wants to campaign for these things. Etc. Of course I think the absolute best thing you could do with your money would be to give it to me. :-)
    – Jay
    Commented Apr 25, 2014 at 14:05
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    @KristofferNolgren I'm not sure I understand your reservations about microlending. I began using a microlending service a few years ago, starting with $50. I loan out money, and within a few months, I get my $50 back (I've never had a default) and can loan it out again.To date, I've loaned out $750, just using that $50. Considering that my $50 has been able to "do $750 worth of good in the world" (so to speak), that's an extremely high ROI. Yes, I'm not getting interest, but my small investment is still able to provide some benefit. Commented Apr 25, 2014 at 14:41
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    Note that solar investments are heavily dependent on subsidies, which may be unreliable, and the energy itself is not quite efficient enough to make sense otherwise. It's also been ridiculously over-saturated with buzz and exposure over the last couple decades, so a lot of the investments will be over-priced relative to both their payoff and their humanitarian benefits (i.e. people buy it to SAY they own it, which marginally reduces the need for a solar venture to be either humanitarian or profitable). Solar generally is probably not a very good humanitarian investment.
    – NL7
    Commented Apr 25, 2014 at 15:10

7 Answers 7


Vanguard has a Vanguard FTSE Social Index Fund. Their web page says "Some individuals choose investments based on social and personal beliefs. For this type of investor, we have offered Vanguard FTSE Social Index Fund since 2000. This low-cost fund seeks to track a benchmark of large- and mid-capitalization stocks that have been screened for certain social, human rights, and environmental criteria. In addition to stock market volatility, one of the fund’s other key risks is that this socially conscious approach may produce returns that diverge from those of the broad market."

It looks like it would meet the qualifications you require, plus Vanguard funds usually have very low fees.


One of the best things you can do for this purpose, while getting a modest ROI on a passive investment, is invest in a company that profitably does whatever you want to see more of.

For example, you could invest in a for-profit company that sells needed goods to low-income people at lower prices. Something like Wal-Mart, which is one of the most effective anti-poverty engines in the US. You might also say the same of something like Aldi (owner of Aldi stores and Trader Joe's), which is a discount store chain. This is true even though a company like Wal-Mart is seeking to make money first. Its customer base tends to skew heavily towards low-income consumers, and historically to rural and elderly consumers. When Wal-Mart is able to provide food, clothing, appliances and the like to poor people at a lower cost, it is making it marginally less painful to have a low income.

Peter Suderman can explain why Wal-Mart is a humanitarian enterprise:

  1. Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food.

  2. The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile.

  3. So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.

As Suderman points out, this view of Wal-Mart dramatically lowering prices that low-income people pay for food was corroborated by an Obama adviser.

That's just one company. You can pick the industry and company that best suits your personal preferences.

Alternatively, you could invest in something like Whole Foods, a company with multiple missions to improve the planet and the community, in addition to the more typical mission of being a prosperous retail chain.

Of course, as a general proposition, a less than entirely altruistic, charity-inclined investment doesn't need to be targeted at those with low incomes or at saving the planet. You could invest in almost anything you think is good (yachts, yo-yos, violins, energy production, industrial inputs, music performances) and the company will take care of making more of that good thing. You didn't say whether your goal was to help the poor, the planet, arts, sciences, knowledge, community, or whatever.

What I understand you to be saying is you are willing to accept a lower ROI in exchange for some warm-fuzzies from your investment. That seems perfectly valid and reasonable to me, but it makes it much more subjective and particular to your tastes. So you'll need to pick something that's meaningful to you. If you're going to trade ROI for positive feelings, then you should pick whatever gives you your optimal blend of emotions and returns.

Alternatively, you could invest in something stable and predictable to beat inflation (some sort of index or fund) and then annually use some portion of those profits to simply give to the charity of your choice. Your investment and your charity do not necessarily need to be the same vehicle.

  • 9
    "Wal-Mart is a humanitarian enterprise" - I know what each of these words mean, but I've seen them in this sequence before. And I believe that more small businesses were destroyed by this company than any other. I don't believe buying WMT stock is what OP had in mind. Commented Apr 25, 2014 at 15:28
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    Politically incorrect, but true about Walmart. +1.
    – Pete B.
    Commented Apr 25, 2014 at 15:59
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    @JoeTaxpayer - All companies serve people. A company that distributes food and clothing to millions of people serves humanity. The fact that other businesses closed does not alter this equation. Charities displace each other, companies displace each other, romantic partners displace each other. If anything, the fact that so many businesses closed suggests that the replacement was superior in the eyes of a critical mass of consumers. I'm also not sure why we should consider the needs of businesses above the needs of consumers.
    – NL7
    Commented Apr 25, 2014 at 16:00
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    If a charity went to millions of low-income people and gave them a 5%- price-cut voucher good for all their groceries for the next decade, we'd call it an enormous act of charity. I don't see why we shouldn't also praise Wal-Mart's aggressive price cutting, especially since it is equivalent to something more like 25% price savings for food consumers.
    – NL7
    Commented Apr 25, 2014 at 16:08
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    I have heard this argument before, but what about Wal-Mart's place in creating low incomes in the first place? Not just employees and communities, but for their suppliers?
    – MrChrister
    Commented Apr 25, 2014 at 16:46

Shariah compliant investments attempt to achieve your "ethical investing" ideals. Many countries around the world have a long list of shariah compliant investments and lots of journalists will go great lengths to reveal when a company is not really shariah compliant.

Standard & Poors (S&P), an American financial services company, hosts a Shariah compliant index too, but on the Toronto Stock Exchange in Canada due to the Islamaphobia rampant in the United States. But of course, international companies are indifferent to any single country's social problems, and in your new pastime as an international speculator you will get the same luxury too and exemption from the political spectrum.

S&P/TSX 60 information can be found here: http://web.tmxmoney.com/tmx_indices.php?section=tsx&index=%5ETXSI

Business sectors prohibited from the Shariah index include: Gambling, Pornography, Tobacco, amongst others.

In the United States, the concept has been renamed "B-Corporation" (a play on the federal term C-Corporation and S-Corporation), and has garnered enough of a movement that several states have created these as entities people can actually register them with the state, but these are not recognized as "B-Corporations" to the federal government.

Shariah compliant investments will be easier to find worldwide, due to the popularity of the associated religion.


I'd suggest you to separate "doing good" from "earning profit". Look at the guys like Warren Buffett and Bill Gates (or Carnegie and Ford for that matters). They understand that you can't reconcile the two goals, so they donate for free what they earned for profit.

If you want to make a social impact with your money, you can check the charity programs that have a confirmed record of a positive impact on people's lives.

Non-profits that studied such programs publish their results extensively:

AidGrade compiles this research and suggests direct donations to the programs that demonstrated best outcomes per dollar invested:


FTSE ethical investment index:


"The FTSE4Good Index is a series of ethical investment stock market indices launched in 2001 by the FTSE Group. A number of stock market indices are available, for example covering UK shares, US shares, European markets, and Japan, with inclusion based on a range of corporate social responsibility criteria. Research for the indices is supported by the Ethical Investment Research Services (EIRIS)." - Wikipedia

  • There are a few tracker ETFs available following the UK FTSE4Good index; there do not appear to be any for the US one so far as I could find.
    – timday
    Commented Jan 2, 2016 at 10:54

There isn't going to be one right answer, but LessWrong has some posts on effective altruism you might find helpful. They also link to a TED talk

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    Can you summarize the contents of those links, if possible, so that your answer is still useful even if those links go dead or change? Commented Apr 25, 2014 at 23:46

In the UK, one quirky option in this area (OK, admittedly it's not a passive) is the "Battle Against Cancer Investment Trust" (BACIT). Launched in 2012, it's basically a fund-of-funds where the funds held charge zero management charges or performance fees to the trust, but the trust then donates 1% of NAV to charity each year (half to cancer research, investors decide the other half).

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