Seek out the best of the socially responsible mutual funds

Hundreds of mutual funds promote socially responsible investing. You should compare funds carefully and ask your investment advisor for advice before choosing one. The point of SRI is to contribute to the social good while also maximizing your returns.

I recommend: Three SRI mutual fund companies stand out as consistent top performing socially responsible investments: Calvert, Parnassus Investments and PAX World Mutual Funds. You can download a prospectus for each of Calvert's funds. You'll need to contact Parnassus and Pax for more information. As with any investment, review the risks and performance of each fund carefully before investing any money.

Compare funds online to find one that suits your idea of socially responsible investing

If you want to invest in a particular type of product, green energy for example, or you want to avoid certain types of companies, such as those that do animal testing, then use online investment research tools to locate a fund that reflects your values.

I recommend: SocialFunds.com allows you to search by social issues, religious affiliations and whether or not the funds exclude alcohol, tobacco and gambling. You can also compare fund performance and percentile ranking. The Social Investment Forum provides a chart that shows how the funds screen companies and areas in which companies make positive contributions. You'll also find charts on financial performance.

Invest in socially responsible hedge funds if you need a large investment vehicle

Hedge funds are similar to mutual funds in that they pool the funds of multiple investors. However, unlike mutual funds, hedge funds are not regulated, are only open to accredited investors, and don't advertise their products. Socially responsible hedge funds are for the multi-million dollar investor looking for a private investment fund with high yields. Hedge funds can be risky, so make sure you've done your homework before investing.

I recommend: Adair Capital offers socially responsible alternative investments. Like all hedge funds, you'll need to contact them for fund information. Expect to undergo a thorough screening process before being invited to invest in their funds. Green Cay Asset Management is a Bahamas-based hedge fund company. You'll have to email them for fund information.