Can you invest and do good at the same time?

Can you invest and do good at the same time?

backinstudioAnd we’re back! First time in the studio in two months and it feels so good to be home!

This week’s show was inspired by our many hours in the car, where NPR was our only option on the radio (our car is old by tech standards so yes, we listened to the radio the whoooole way across the country).

Mark Zuckerberg and Priscilla Chan made headlines when they announced plans to “give away” nearly their entire fortune over their lifetimes. Lots of people, experts or not, speculated what their plans were.

Some claimed they were looking for a big tax break (not happening – they didn’t start a foundation), others were wondering what the heck they were actually planning to do with the money if they weren’t donating it.

Clients and workshop participants ask me all the time if there’s a place they can invest their money that is also socially conscious. This is beyond making sure you’re not investing in tobacco, alcohol, prisons, sweatshops, etc., which is typically what’s available now.

Zuckerberg and Chan are part of a growing group of investors who want to know their dollars are going towards companies and causes they believe in.

This kind of investing – coined as impact investing, socially conscious investing, or socially responsible investing – is often thought of as an oxymoron in the investment world. You do good and give impactback through charitable giving and you make your money from investments and businesses.

But is there another way? We see companies building this into their business models all the time now, and with great success (with Tom’s Shoes and Warby Parker as standouts).

Does this translate to the investment world?

The Forum for Sustainable and Responsible Investment has a list of mutual funds that focus on socially conscious companies, so you could almost build an entire investment portfolio that’s diversified and socially responsible (although word of caution – not much of a track record performance-wise for most of these funds).

Startups like Aspiration are appealing to socially conscious investors from multiple angles – with an impact investment fund, a commitment to donate to a microlending non profit, and a pay-what-you-wish fee model.

When you have young billionaires committing their fortunes to impact investing, it feels like more than just an investment trend. It feels like a movement.

Take a listen to the show for more details on where impact investing is now and where the industry thinks it’s headed and feel free to forward this to friend who’s been having their own moral quandaries about investing. We’re right there with you.

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