Hal M. Bundrick, CFP®
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If you feel your values are minimized in a world where only the loudest voices are heard, you can do something about it.
Even when money is scarce, you can direct your financial resources in ways that support the causes you care about. And there are ways to exert your influence on matters that matter to you without spending a dime.
Here’s how to explore ethical finance.
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What are socially aware actions?
The steps you take to support causes based on your values, such as human rights, the environment, helping animals, are called socially conscious actions. They may include:
- Consumer Choices: Make purchasing decisions based on a company’s commitment to prioritized values, such as the environment, locally sourced or ethically sourced products, or items with natural or sustainable ingredients.
- Individual involvement: A simple and inexpensive way to make your voice and values count. It can be as simple as engaging in a volunteer project in your neighborhood or joining a national effort.
- Financial actions: These can include charitable donations to organizations involved in causes you care about, choosing a bank wisely, and targeted investments.
What is socially conscious consumption?
In short, it’s choosing to spend your money in a way that supports your values. Every dollar builds momentum by increasing demand, so companies that act responsibly get the message: this is what people want.
Maybe it’s recyclable packaging, locally grown food, ethically produced goods, or products that are free from animal cruelty. According to a report commissioned by the World Wide Fund for Nature, “consumers are changing their behavior, with [Google] searches for sustainable goods up 71% globally “between 2016 and 2020.
“The link between exploitative factories and fast fashion is a good example,” says Patricia Illingworth, a professor at Northeastern University and author of “Giving Now: Accelerating Human Rights for All”. Many inexpensive clothing manufacturers are known for low pay and dangerous working conditions, she says. “We don’t need 10 shirts and we could buy transparent and ethical brands.”
Check if a company has been certified by B Lab, a non-profit organization that measures environmental and social justice performance and the impact of for-profit activities. You can check the B Corporation Certification Directory to see if a company you are considering doing business with has met the B Corp standards of socially conscious impact.
How to be socially aware without spending a dime
One word: volunteering. And it doesn’t have to be a solo effort. Networks of volunteers, called “mutual aid associations”, often provide childcare, food or medicine deliveries and other services to those in need or without transportation.
Some volunteer organizations cook, serve, or deliver meals to other community members.
The power of socially aware volunteer groups is that “people decide together what they want to do and how they want to help each other. And then they help each other. And the people they are helping could help other people at some point.” Illingworth says.
Many times, these efforts offer volunteers the opportunity to do things they love, like cooking, sewing, or maybe a little extra data.
“A recent student on my philanthropy and ethics class spent 30 minutes a day helping others,” says Illingworth. Then, he and another student volunteer co-founded a nonprofit called Donor Lab, which uses data science to help nonprofits reach donors.
“They wanted to use their skills to help make the world a better place.”
Socially aware financial decisions, including charitable donations
Even considering philanthropic powerhouses like the Gates, Ford, and Getty foundations, individuals still account for more than two-thirds of all U.S. charitable contributions, according to an analysis by the National Philanthropic Trust of the 2021 annual report Giving USA. However, if your budget doesn’t have a lot of “give” in it, you can still use the power of your daily dollars to push change. Here are some ideas:
Aim for your impact
Budget carefully to see how much you can save, then pick an area of impact and focus on that. Your dollars could go further with a small hometown charity. However, you can also choose a national nonprofit organization known for efficient spending by checking its consulting score on Charity Navigator. Also consider combining and multiplying your contribution with other small donors by hosting a fundraiser, perhaps something like a neighborhood yard sale with proceeds to benefit a good cause.
Check with your employer to see if it will match any or all of your nonprofit donation. Some companies do.
Be aware and reduce your carbon footprint
This can include cycling more, driving and flying less. Perhaps considering a hybrid or electric vehicle. And when you travel, choose LEED certified accommodation.
Examine your bank
Being open to changing your financial services provider can allow you to find local options that may better fit your values. Community banks and local credit unions can be excellent options and can be easier to research than huge national financial institutions. Often these local financial centers are involved in local charities, social causes, and benevolent projects worthy of your support.
And the board members are often high-profile business leaders you may have heard of or even know about.
Here’s how to identify an ethical and socially responsible bank.
In your research, keep in mind a marketing tactic called “greenwashing”. It is then that companies exaggerate their environmental priorities to win the favor of socially conscious consumers.
Consider a targeted investment
Choices include donor-recommended funds, or you may want to choose environmental, social and governance or ESG investments.