Investment: When Good Deeds Return Dividends

Scores of U.S. corporations, business coalitions, labor unions and foundations have contributed heavily to programs aimed at easing the plight of the nation’s poverty-stricken citizens—a large proportion of whom are Negroes. In most instances, such efforts have been purely philanthropic. Yet it is becoming apparent that good deeds and financial dividends are not mutually exclusive.

The latest to make this discovery is one of the biggest contributors of them all: the Ford Foundation. Last week President McGeorge Bundy announced that the foundation, while continuing to give some $200 million a year in outright grants, will for the first time dig into its investment portfolio with the expectation of reaping a return from its high-minded endeavors.

As a starter, foundation trustees earmarked $10 million for investment in activities that would have a profit goal as well as offer a sociological gain. Out of this, interest-bearing loans will be granted to or stock purchases made in these enterprises:

— South Carolina’s Congaree Iron and Steel Co. ($1,000,000), which needs working capital and has agreed to transfer a substantial part of its stock and profits to a trust for its predominantly Negro work force.

— Philadelphia’s Progress Enterprises Inc. ($300,000), an enterprising real estate and manufacturing operation controlled by the city’s mostly Negro Zion Baptist Church.

— New York City-based Mutual Real Estate Investment Trust ($1,000,000), which owns apartment buildings in New York, New Jersey, Illinois and Virginia. The company has had a hard time raising capital for expansion because of an aggressive policy of integration in its units, most of which are well removed from heavily Negro neighborhoods.

In describing the new investment program, Bundy made it clear that the

Ford Foundation expects to get more than its money back in loan repayments, interest and stock dividends. Where will that money go? Back into other foundation work.