Key takeaways
- An increasing number of people, especially the younger crowd, believe it’s important to actively take steps to positively impact social issues and the environment.
- Impact investing, a concept that has gained traction over the last few years, does this by only investing in publicly traded companies and funds with a commitment to addressing environmental and social issues.
- We recently discovered a virtual bank that operates in much the same way. This bank allows customers to decide how much to pay in things like ATM fees, if any at all. They then take a portion of that fee and donate it to charity.
- More and more financial organizations are waking up and listening to those who strongly believe in getting involved to make the world a better place.
- Take some time to see if any of the banks out there, especially those with a solely virtual presence, have a philosophy that fits with yours.
If you’re concerned about the environment, or interested in making a difference in various social issues, you might consider impact investing. It’s a concept that has been gaining traction over the past few years. Investing your money in certain publicly traded companies can have a beneficial societal or environmental effect and that’s what impact investing is all about. This is in addition to the financial benefit you actually want from your investments, in general.
We’re seeing this concept take hold in other areas of the financial sector as well. Recently we came across a website called Aspiration.com. Aspiration is a virtual bank following this approach for making a positive impact by how they share their profits and the societal issues they believe important to address. For instance, they believe in sustainable investing. To follow through on this, they will not invest in any oil pipeline projects or donate to political campaigns not committed to sustaining the environment.
And their policies include an interesting twist: they allow banking customers to pay only the fees they want to pay. Here’s how it works. They charge no ATM fees, but let you decide what you think is fair to pay for a transaction. Maybe you feel like paying $5 for the convenience of using an ATM, or maybe it’s $3 or $7. Whatever you decide it is, they take 10% of that and donate it to charity.
This virtual bank is filling a need on a couple of fronts. The point is that we’re seeing even the stodgy old financial world take note of what people want and then filling these and similar niches. Think about a bank and you’ll probably conjure up images of a stodgy, overly formal place with unchanging goals and policies. But now these organizations are awake to people’s increasingly strong desires to make a difference in the world and they’re appealing to those of us who say,
“You know what? I’m with you on this. I philosophically hold the same beliefs you do. If I’m going to bank anywhere at all, I’ll do it with you. I know that if I pay a fee for some service or convenience you provide, you make a profit off of my money. By donating a portion of that profit to causes I find important, you’ll help me make an incremental difference in the world.”
That’s something different. That’s something truly interesting. So, go out there and look, even in the stodgy old banking industry, to see if there’s one out there with a philosophy that fits in with yours. Look closely at virtual banks, those with no brick and mortar presence, because they can take some of the money they save in overhead and put it toward things that make sense to you. It’s interesting to see these companies popping up and I’m sure we’ll see many more of them in the near future. Until next time, enjoy.
Gary
