At the same time financial stability became an even large concern than usual. Many planned on buckling down should a recession hit, while others became more focused on retirement and investments. So when you’re trying to be woke but also make some decent financial decisions, what’re you to do? That’s where social impact investing (also known as social justice investing) comes in.
What is social impact investing?
It’s aligning your investments with businesses and organizations that also align with your social views, so that way your hard-earned money is making its way to groups that stand up for what you believe in - and giving you some of that coin right back. More and more people are now becoming much more savvy about how to ethically invest.
Think about what kind of investor you’d like to be.
Are you looking to invest for the sake of the planet? Looking at labor practices like how companies treat their employees? Corporate governance (i.e. the board of directors of a company, how they run that company)? Determining what kind of places you’d like to invest in is half the battle, but so is doing some internal self-reflection to figure out what is represented in the places you invest in.
Do your research.
We know, we know - this is probably the internet’s favorite line when it comes to winning an argument, but the same holds true for investing effectively in your social views. Looking into startups, nonprofits, and more organizations working on tackling issues close to your heart is a surefire way to put your money where your mouth is to make some real, lasting change. Our favorite resource? Latinx finance experts dedicated to advancing our community, SUMA.
Participate in impact banking.
Impact banking is just one of the many ways that you can house your money, but with a more just approach: taking your money out of banks that practice predatory lending and putting it into a financial institution with social justice at the forefront of their priorities. This includes B Corporations (banks meeting certain metrics that benefit individuals/the environment and have certain levels of both public transparency and accountability by B Lab, a non-profit), Minority Depository Insitutions (credit unions or banks that are at least 51% owned by certain minority communities, serve mostly minority communities, or have a minority-majority Board of Directors), and Community Development Financial Institutions (banks or credit unions that divert the majority of their financial activities to investing into low-income, underserved areas, with their boards representing those same communities they invest back into). There are also now alternative banks that are 100% focused on community impact. You have lots of options in the impact banking department.
Become familiar ESG ETFs.
We know, lots of acronyms right? It’s not so overwhelming once you consider investing in exchange-traded funds focused on environmental, social, and governance, though! There’s many ESG ETFs you can put your money in, but this list from Bankrate outlines some of the best of the best - and even go through reputable investing firms like Fidelity and Ally too.
SRI funds can help you achieve your goals.
Socially responsible investing is a part of the ESG investment strategy, but focuses more on how businesses run and impact their communities. When you approach your investing with an SRI strategy, you’re investing more into corporate social responsibility or how much a business looks to behave ethically to all of its key stakeholders, the environment, and the market itself. By investing this way, you’re looking to put your dinero to the challenge of making the world a better place - one dollar at a time.
Like this article? Be sure to join the Luz Membership Community, where we host online events, workshops, and more on everything covering finances to building your own space online.