Third Sector met with CEO of UCA Funds Management, Michael Walsh, to find out about his role in ethical funds management and get his thoughts on innovation and growth in the NFP sector.
TS: Can you tell us a little about yourself and how you became CEO of UCA Funds?
MW: I have been in the financial services industry for over 30 years and about 15 years ago I became interested in ethical investing and the charity sector. I recognised there was a need for research [in that space, and so I] started two business units that conducted research on ethical investing and charities. This turned into a business that had events and awards for charities and ethical investing.
I sold the other business and got back into executive funds and now I am CEO of UCA Funds, which is an ethical funds management [organisation] specialising in the charity and ethical funds sector.
TS: Could you explain what ethical investment is and where this evolved?
MW: Ethical investing actually came from the Society of Friends, which is a Christian movement. That’s the origin but the principal goes back centuries.
There is certain type of business activities you would and wouldn’t be involved with. You have a choice as to where and who you want to invest with. Other organisations then professionalised this idea.
TS: I have read you use a 360 approach and have four main methods in doing so, could you elaborate on this?
MW: For philanthropists and NFP organisations, ethical investing is the way they would implement an investment – they are mission-based organisations.
This is the idea of aligning the policy of ethical investing with the mission of your company. What we have is a more 360 and integrated approach. 360 ethical means we operate ethically as a company. The people who work at UCA Funds do not get bonuses- this is an example of ethical investing.
TS: What are the areas of ethical investing that are growing?
MW: One of the areas of ethical investing that is growing is in addition to putting your money where your mouth is, you actually engage with companies. You might invest with banks but if banks are supporting activities that aren’t ethical, you can say, “well maybe this should change.” We are talking to banks about the fact they let gamblers use their credit cards to gamble online. This is a big issue. We learnt about this issue working with various charities.
TS: Are there any struggles you encounter?
MW: Change happens slowly so building a knowledge base for NFPs who are strapped for cash and convincing institutions that this is something to get on board with, this is a process that takes a while. We also recognize we are not the only organization taking this approach.
NFP were victims of the global finical crisis. Governments are also in debt and this means there is a lot of cut in funding. There is a real problem with funding in the NFP sector. We have developed programs such as our webinars in which we can help NFP organisations navigate this challenge. We will use our events to help manage this problem together.
TS: What is the key to success?
MW: One of the keys to success in the non-for-profit sector continues to be developing social enterprise. UCA Funds is a great example of a social enterprise. We have been able to demonstrate that we can provide as good of services as other big companies and we can do this ethically. I would love to see NFP organisations develop their social enterprise. Building a successful business, however, takes time and it involves risks.
TS: What are your hopes for the future of UCA Funds?
MW: We would like to grow and we would like to grow through people recognising the value we can provide.