Soon Do-Gooders at Vanguard Charitable Can Do Better

By Ginger Szala

News September 25, 2018 at 04:24 PM

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Now charitable donors can leverage their efforts through ETFs that are invested in environmental, social and governance directed products. On Oct. 4, Vanguard Charitable will make available three new ESG investment options using ETFs.

Vanguard Charitable is a nonprofit organization that allows investors through a donor-advised fund "a tax-effective way to consolidate, accrue and grant assets to charity." The group was started in 1997 by Vanguard as an independent 501(c)(3) organization. According to Vanguard Charitable, it is "not a program or activity of Vanguard. A majority of Vanguard Charitable's trustees are independent of Vanguard."

The three new offerings are part of a "larger refresh" to the group's investor lineup. "Our donors are increasingly interested in aligning their charitable investment strategy with their personal values," said Jane Greenfield, president of Vanguard Charitable, in a statement.

The new ESG ETFs, launched earlier in the year by Vanguard, are the ESG U.S. Stock ETF and ESG International ETF that seek to track two broad-based FTSE Russell indexes constructed to offer broad large-, mid- and small-cap equity exposure. There also will be an ESG Global Stock ETF that is a proprietary 70/30 blend of the U.S. and international ETFs.

The key to these ETFs is they exclude companies that produce or take part in alcohol, tobacco, gambling, adult entertainment, weapons, fossil fuels, and nuclear power. It also excludes companies that do not meet certain diversity criteria, as well as the labor, human rights, anti-corruption and environmental standards defined by the United Nations Global Compact Principles.

Other new funds available will include a Total International Bond, Balanced Index, Wellington and Income.