production. Because timber is not correlated to the performance of stocks or bonds, it offered investors an attractive diversification strategy.

Some real estate advisory firms have launched equity funds that generate returns for investors while furthering such causes as conservation, affordable housing and urban redevelopment. For example, MMA Sustainable Land Investments, started in 2006, invests in properties such as large tracts of forest and farmland. Income is derived from sustainable forestry or crops raised using green techniques. Among the company’s stated goals are minimizing urban sprawl, protecting wildlife habitats, reducing soil erosion — and producing competitive returns for investors. Even real estate investment trusts (REITs) are going green. “Some publicly traded REITs are working to improve energy efficiency, lessen the carbon footprint and develop green buildings,” says Gary Pivo, a professor of urban planning and natural resources at the University of Arizona.

Investors committed to serving a cause may even be willing to sacrifice some financial gain from a values-based investment, such as purchasing a below-market-rate CD from a community development bank as a way to support community and local projects. But knowingly forfeiting returns for a good cause is difficult to justify if the investment is part of a personal portfolio in which maintaining income or protecting assets is a consideration. If the investors do not seek at least a competitive market return, Merrill Lynch’s Wolfe says, it’s possible that they could lose ground to taxes and inflation, risk diminishing the value of the portfolio, or even force the investor to compensate with much riskier investments elsewhere.

On the other hand, accepting low returns to benefit society may be an acceptable strategy for an investor who has excess capital. But if financial gain is not an imperative, why not just give away the money in the form of an outright gift?

One reason, says Merrill Lynch Private Wealth Advisor David Waitrovich of San Francisco, is “many entrepreneurs and other investors want to make sure the money they give actually is put to work and has an impact.” An investment implies an obligation on the part of the recipient to produce value — whether societal, financial or both, he says.