3 Ways To Be A Financial Activist – Without Spending Money

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When it comes to making an impact with our money, our first instinct may be to shift our purchasing dollars to support the change we seek in the world. Of ban plastics To support black-owned businesses to boycott retailers who are not nice to their workers, how and where we collectively spend is certainly important and deserves our attention.

But are these financial transactions the most powerful way to initiate change? In her new book, Wallet Activism, author and activist Tanja Hester encourages us to think bigger to align our financial movements with the larger movements that are important to us. “If we look at the greatest opportunities we have to use our financial power, a lot of it lies in the work we do. It’s not just the shopping part. It’s how we invest and where we save, ”Hester explained on a recent episode of my So Money podcast.

Here are a few cash moves that Hester says can help tip the scales for a brighter future.

Find out if your bank is part of the problem

If you have a checking or savings account with a major US bank, your deposits can be used to fund large-scale “non-climate-friendly” projects. A Rainforest Action Network study finds that the world’s largest financial institutions have been the main financiers of fossil fuel projects, to the tune of $ 3.8 trillion since 2016.

“I think you have a much bigger impact if you can move your money from a big bank to a credit union, community bank, black-owned bank. There are so many great options that don’t lead. not the money going to the fossil fuel industry, so I would honestly tell people to start there, ”Hester says.

Total cash deposits at all commercial banks in the United States currently exceed $ 17 trillion, but some of those dollars are moving to mission-driven, digital-only banks.

Ando, ​​a neobank, launched in January as an alternative to what is called the “dirty bank”. Since then, in partnership with community banks and credit unions, the company has invested its clients’ money to support more than $ 12 million in carbon reduction projects. “Ando enables the average person to engage in climate change in a healthy, meaningful and frequent way,” says co-founder JP McNeill. Ando says he has more than 30,000 clients and has raised $ 6 million in funding.

In September, the woman-led neobank Rallius pledged to use its clients’ deposits to invest exclusively in environmental, social and corporate governance issues – sometimes referred to as ESG – such as decarbonization, affordable housing and empowerment of women and minorities. The company told CNET that it hopes to withdraw $ 500 million in deposits in its first year of operation.

Align your investments with your values

Do the companies in your portfolio match your convictions? ESG investing is quickly becoming a multi-billion dollar market, as individual investors increasingly support companies aligned with their mission. You can often invest in ESG-focused funds through your broker. Some workplace retirement accounts may also offer ESG or ‘impact’ focused ETFs.

But as the market for ESG investments grows, Hester insists that we still have to do our own homework – because without a standard metric for valuing ESG funds, the market remains murky.

Direct indexing is another way to choose investments suited to your values. How it works: You buy individual stocks in an index fund that you want to track, leaving out the companies that you have a problem with. “You could take the S&P 500 and take out the fossil fuel companies, the gun manufacturers, the people who make fast food,” says Hester. “You can match it with your values.”

While not quite widespread, direct indexing has gained momentum as giant brokerage firms like Vanguard have started offering the service. Word on the street is Fidelity is next.

Make a difference at work

Refusing to work for a “bad actor” company is another way to harness your power, says Hester. “I think industries will be forced to change if the most talented and in-demand people say, ‘You know what? I don’t want to work for this industry. ‘”

However, quitting your job is not always practical or strategic. You can, as an alternative, try to have an impact from within – by organizing a union, for example. There is strength in unity, says Hester. And if your business is struggling with equity issues, you can mentor and lobby for more diversity and inclusion in the workplace.

The recent walkout of workers at Netflix is an example. Trans advocates and employees have urged the streaming service to remove Dave Chapelle’s new comedy special, which pokes fun at transgender people. But when the company refused, employees staged a walkout and the news went viral. Over time, this can cause Netflix to think twice about what content it supports and streams. It will also serve as an example for other companies.

Work is a financial transaction, ”says Hester. “So it’s important to see this as financial power.


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