They call it the "miracle tree." It grows one foot a month and is an abundant source of firewood for fuel-poor villages in Third World countries. Its leaves can be used as fodder or fertilizer, and when the Giant Leucaena tree is cut down, new shoots grow from the stump and renew its life.

In the past three years, the Pax World Foundation of Bethesda has sent 80,000 Leucaena seeds to villages in Asia, Africa and Latin America, said Jack Corbett, president of the foundation. Funds for the tree project come, in part, from shareholders in the Pax World Fund of Washington, who annually earmark some of their dividends for foundation activities. So far this year, the foundation has received $36,417 -- 73 percent of its income -- from Pax World Fund shareholders.

Pax World -- the first mutual fund to make peace the yardstick for its investments -- is not your run-of-the-mill mutual fund. But neither are the other "social responsibility" funds: the Calvert Group's Social Investment Fund in Bethesda, Dreyfus' Third Century Fund in New York and the Working Assets Money Fund in San Franciso. While each has its own criteria, all select their investments with an eye toward companies that have good records on pollution, product safety, equal opportunity and health in the workplace.

These groups try to do well financially by investing in socially beneficial projects, said Luther E. Tyson of Laurel, president of Pax World Fund.

Shareholders "not only get income, they not only get dividends, they also get satisfaction knowing that those dividends were made in a way they approve . . . ," he said. "There also can be social satisfaction in knowing they are using their influence with corporate executives concerning peace criteria, environmental criteria and fair employment."

The pioneering trail carved through the American business thicket by Pax World Fund 13 years ago has become a busy thoroughfare. Pax World has grown to $16 million, Calvert to almost $47 million, Dreyfus' Third Century Fund to $131 million and Working Assets Money Fund to $40 million in little more than a year. The social investment movement has spun off newsletters, investor guides and trade association-style forums.

Social investment appears to be expanding into new territories, with socially concerned investors beginning to put money into community self-help projects in housing, small business and other areas. The trend is clear to Joan Bavaria, director of the Franklin Research Fund and Development Corp. in Boston. Her company manages $140 million for 200 organizations and individuals, many with specific investment criteria.

"I see an incredible amount of movement toward socially responsive investment," Bavaria said. A growing spectrum of investors -- including public pension funds, unions, churches and endowments -- are using their money to effect social change through the investment process, she added.

For people with deep social concerns, the funds offer an important choice. Keith Oberg, a 33-year-old program officer for the Cooperative League of the U.S.A., and his wife, Jessica Mott, 30, an economist at the World Bank, have purchased shares in the Calvert fund. "We wanted to invest in some sort of responsible manner. We're particulary concerned about the military aspects," said Oberg, noting that his wife is a Quaker and a pacifist. "We like to invest in companies that address human needs."

Grace Parker, assistant vice president of the Calvert fund, says interest in her group's portfolios is growing. "The bigger the fund gets, the more general the population that invests in the fund," she said. "It started out with people who liked the idea and were willing to take what they thought was more of a risk. But it turned out that it wasn't more of a risk and actually was a good economic decision."

In 1983, Calvert's Social Investment Money Market Fund was the nation's top performer, increasing 8.9 percent, according to Donoghue's Money Fund Report. Because it was relatively new, however, the fund did not charge its full management fee. Had it done so, its yield would have been reduced, but only by about three-eighths of one percent, according to Wayne Silby, the fund's president.

Social investing also has taken root in California. Fifteen months ago, the Working Assets Money Fund was launched by eight people in San Francisco with $100,000. Today, it has more than $40 million in assets, said Julia Parzen, the fund's chief executive officer. Twenty-five percent of the fund's assets come from institutions, including foundations, churches, unions and consumer groups.

Parzen said the fund grew rapidly because of media attention and an advertising campaign in environmentally conscious publications such as The Progressive magazine, Mother Jones, New Age, the Nation, Friends of the Earth magazine and Sierra, the Sierra Club magazine. The average age of investors is 35 to 38. Parzan calls them "the maturing generation that has money it didn't have before and is interested in investing in a socially reponsive way."

One-third of the fund's accounts are held by women in their own names, Parzen said, "reflecting changes in the economy in which women are taking control of their own money."

The heart of "socially responsible" investing is the "screen" that fund officials use to sort out the bad guys from the good guys -- those who pollute from those who give a hoot, as it were. Each fund has its own yardstick. Pax World Fund, for instance, takes a pacifist approach toward war and rejects investments in defense companies, using the Defense Department's own list of the 100 largest contractors as its basic guide. Health care, education, pollution control, housing, retail, food and the clothing business are high on Pax's list of concerns.

Dreyfus' Third Century Fund, on the other hand, screens companies on the basis of four categories: protection of the environment, occupational health and safety, consumer protection and product purity, and equal employment opportunity. "Our agenda is . . . a consensus agenda," said Jeffrey Friedman, the fund's president. "We try to avoid getting caught up in special causes."

When studying a company for possible investment, Dreyfus analysts also study the industry and rank the company within its industry. Generally, if a company falls below a median standard of performance, it is unlikely to be eligible for investment, Friedman said.

The Calvert fund avoids companies that pollute the air and water, discriminate against women or minorities, build weapons, produce nuclear power or do business in South Africa. Pax World Fund says it also has severely limited its investments in companies doing business in South Africa, although it has invested in firms involved in food or medical activities in that country.

"We are struggling with a criteria we can live with," said Corbett, Pax World's vice president.

The Working Assets Money Fund will not invest in companies that have facilities or employes in South Africa or in banks that lend the country money.

One of the smallest social investment funds is the New Alternatives Fund of Great Neck, N.Y.

It has has $429,000 in assets and concentrates on solar energy because it believes the nation needs to step up its conservation efforts, said David Schoenwald, the fund's vice president.

Fund officials say that alternative energy sources are a "growth area" for investment.

Beyond its investment in the Leucaena trees, the Pax World Foundation is earmarking money for other agricultural products to help people who live in Third World countries.

One of these is the Buffalo Gourd, which, like the Leucaena tree, grows in hot, dry climates. It has hundreds of seeds that are rich in oil and protein and can improve the diet of people in drought-afflicted areas such as Ethiopia. In colder regions of the world, the Siberian Pea Shrub promises to provide a new source of food.

In its proposed 1985 budget, the foundation has earmarked $10,000 to reforest Third World villages with Leucaena trees, $10,000 for the Buffalo Gourd project and $5,000 for Siberian Pea Shrubs.