Investment managers have found a new way to give back

The popularity of companies that give back — such as Warby Parker and TOMS, which donate a pair of glasses or shoes for every pair you buy — is spreading to investments.

Investment manager Infrastructure Capital Advisors, for one, is giving 10% of its revenue from sales of its exchange-traded funds towards funding an organization aimed at closing the education gap with low income youth, called Tutoring America.

State Street Global Advisors is another, donating part of the revenue from its ETF aimed at supporting gender diversity (SHE), into a donor-advised fund that supports female leadership programs.

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And Loncar Investments announced a year and a half ago that it would contribute .04% of the total assets in its Loncar Cancer Immunotherapy ETF (CNCR) to the Cancer Research Institute. To date it’s given about $30,000.

“People increasingly want to do a good thing while they’re earning a return on their money,” said Brad Loncar, chief executive of the firm. “Younger people almost demand it from their purchases.”

He anticipates the appetite for investments with this type of philanthropic component will increase, similar to the way money flowing to socially responsible investing and impact investments is rising.

Assets in SRI, which include assets tied to an impact mandate, hit $8.7 trillion last year. That’s up more than 183% since 2010, according to US SIF, the Forum for Sustainable and Responsible Investment, an association of socially responsible investment professionals.

Impact investors specifically seek to buy profit-seeking investments in firms with the power to improve their communities or the world as a whole, while SRI portfolios tend to invest only in firms with certain practices, such as those that are environmentally conscious.

All of these investments are especially popular with millennials and women, multiple surveys have shown.

Mr. Loncar said he’s also seen support for his firm’s immunotherapy ETF come from older, wealthy investors who have already made their money and want to see it support “a good thing.”

“People view the firm’s contribution as an extra nice thing, like the cherry on top,” Mr. Loncar said.

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Jay Hatfield, president of Infrastructure Capital Advisors, said his firm’s charitable commitment is a way of giving his company a purpose beyond just making money. The firm’s two ETFs have about $500 million in assets under management.

At the end of this year, the firm will contribute about $400,000 to fund supplemental tutoring services and other academic resources aimed at helping underprivileged students catch up with their wealthier peers.

Improved education and test scores can help end the cycle of poverty for these students, and it’s a cause that everyone should want to fund, Mr. Hatfield said.

“I can’t think of one person in the world who wouldn’t want to give extra resources to children who don’t have enough,” he said. “We are supporting low-income students getting an equal playing ground.”