Posting this for a friend who is intensely ~overwhelmed~
My friend is in her 60s and her husband’s parents just passed, leaving a Trust with 10x the anticipated money (~$80k expected turned into about ~$800k realized). Yay windfall but cue huge stressful life-changing decisions while trying to battle Very Serious cancer.
The money will go into a Trust for taking care of the family residence and for the longterm support of family members with special needs. How that Trust/Trusts should be structured is a-whole-nother complicated topic for which lawyers are getting hired BUT …
TLDR who should the new Trust lodge with that will not hurt the world with the money? My friend is VERY clear that better social values is more important than maximizing the ROI (this money has a lot of jobs to do so it still needs to be a safe and smart investment).
The parent’s old Trust is still with Merrill and that is not emotionally satisfying (these are very crunchy folks who have spent their lives starting schools, adopting kids with Autism, building permaculture, etc). I don’t think that just a regular ESG fund of a Big Bank will be satisfying either. Any recommendations for firms that are doing Good Work?
First, kudos to your friend for approaching this so intentionally. An investment portfolio that is smart and safe has to be diversified. So if a single investment or fund tanks, it doesn’t risk the entire pot. This is why funds like Vanguard target date funds are considered some of the smartest and safest. Fwiw, Vanguard is slightly better than most big banks in that it is owned by its investors; effectively a giant co-op so it’s incentivized to have lower fees.
It is impossible to do zero harm across a broad portfolio. A good strategy might be to make sure there’s a component of actively doing good.
Have a look at ImpactAssets and the funds they offer investments in. Unfortunately I think IA only manages Donor Advised Funds which are legally committed to being given away. Their lists are nonetheless interesting.
These funds are quite narrow through (not sufficiently diversified across a range of industries, companies, geographies, etc). A small portion of the inheritance could be set aside to invest in some of these with the majority remaining in a Vanguard target date or other general fund.