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Values Aligned Personal Investing

I have been inspired by visions and examples of regenerative economies that can support all life forms, rather than the resource accumulation by a select few with massive inequalities and ecosystem degradation that is so prevalent today. This inspiration has come from books including Doughnut Economics, Decolonizing Wealth, The Soul of Money, and Wealth Supremacy, and leaders at the Post Growth Institute, Capital Institute, Zebras Unite, Life at Work // Weekly. These ideas have helped me gradually rethink how I can leverage my own time and personal financial influence to be more in line with my values and supporting regenerative economies, including where I shop and bank. From spending money locally by buying my veggies at a local farmstead, to moving from a big bank to a local credit union where my money will support my neighbors, to investing in a tool library membership rather that buying tools I’d only use occasionally. Aligning my larger financial investments with my values has been an area where I haven’t been as sure about where to start so it’s taken more time and learning.

Over the past few months I’ve made it more of a priority to learn about opportunities to invest my personal savings in a more intentional way that is better aligned with my values and desired impacts in the world. I’ve attended many webinars, read books, listened to podcasts, combed through website, and still I feel like I’m just scratching the surface in a way in this large sea of opportunity. Since it has been challenging and a bit overwhelming for me to start to learn about the practical sides of how to align my investors with my values, I wanted to share some resources I have discovered in hopes it might help others jump into this topic and make practical changes to their personal investments also.

Learning more about the personal impact investing landscape

I found a few really helpful resources for exploring what is available within the values aligned world for individuals with modest amounts of savings and finding communities of others active in this space:

  • My Fair Money – this 8 part podcast series is aimed at helping retail investors make a positive difference with your money. I found it was a helpful introduction to investment topics and terminology. Their website also includes many (Europen-centric) resources and fund and impact databases.
  • The Next Egg – this community has the goal of giving people the power to self-direct their 401(k)s and IRAs, so that we can invest our money in building vibrant communities. They offer resources to subscribing members, but have also offer free webinars including an AMA session and related resources which has been really helpful for me. Their members also put together a spreadsheet of non-extractive investing options.
  • Transformative 25 – this is an annual list of funds, banks and initiatives that are demonstrating the power of integrated capital that is designed to reimagine the finance system to work for people and planet, published by Integrated Capital Investing. I looked at the three years of reports available to get information about what funds may be aligned with my goals.
  • Invest for Better – this nonprofit equips women with the skills and confidence to take charge of their assets for positive change. They have regular webinars – I participated in one one CDFI Loan Funds that was informative. If you become a member for $50 annually you have access to additional community resources. One of the founders is Jane Firpo, author of the book Activate Your Money.
  • Decolonizing Finance – In this panel at the Decolonizing Economics 2024 summit, the discussion began with three major points: (1) resist pressure to assimilate to rules and best practices for traditional lending and investing, (2) think hyper-local – keep assets in “communities”, and (3) trust the people responsible for making the vision a reality – look at non-traditional measures to determine trust.
  • Transform Finance – as their name says, they are a partner for the movement to transform finance, envisioning a world where all investors serve as net positive contributors to a just and equitable society. They provide many useful resources, including a Database of Alternative Ownership Enterprise (AOE) Investment Funds and Vehicles and webinar on investing in AOE funds.
  • The Nature of Investing – this book by Katherine Collins explains how principles from the natural world can apply to finance, including moving from transactional to relational, cultivating cooperation, and seeing diversity as an asset.
  • Impact Assets (IA) 50 – this is an annual showcase of impact investment fund managers. It’s is a large list so was a bit overwhelming for me, but may be a good resource for some.

Finding funds to start with

I had a few key requirements for investments to meet my current needs:

  • Available to modest investments – There are a lot of funds that require large investments and require investors to be a “qualified investor”, but I wanted to focus ones with small investments requirements within my personal limits.
  • Expected returns to at least keep up with inflation – While I can understand the reasoning behind ideas of a zero or negative interest economy to reduce hoarding, given the limited governmental social safety net where I live, I also want to make sure the money I’ve set aside to support myself in retirement or to pay for unexpected medical expenses that may come up will be there to support me, so I was looking for funds that provided expected interest rates to at least keep up with inflation.
  • Risk – I have a low tolerance for risk of losing my invested money so I wanted to find funds with a track record of returning assets to investors with interest.
  • Liquidity – While I wanted to be able to access some of the invested assets on a 1 year horizon, for other assets I was fine not accessing them for up to 5 years, so I was open to funds offering liquidity on these time scales.
  • In line with my social and environmental justice values – I looked for funds support some combination of black and indigenous communities, co-operative organizations, and environmental health.
  • Starting local – In theses initial investments I was interested in investing locally in the areas I know best, supporting my region (Washington state/Seattle area) or a mix of investments throughout the U.S. Over time I want to expand this to understand how to best invest in ventures in other parts of the world.
  • Ease of Use – I was looking for funds available for investment within a platform that made it easy to get started.

Private market and debt funds seemed to have the best opportunity for impact meeting while my current needs since they offerer the opportunity for additionality – positive impact or outcome that would not have otherwise occurred without additional resources or capital investment. A few funds and investment platforms that have stood out to me are:

  • Shared Capital Cooperative – lending and investment fund for co-ops of all types and sizes, cooperatively owned and managed by the co-ops that borrow from and invest in them. Their Shared Capital Class A Preferred Stock offers a 5% target annual dividend, with no minimum hold period though investors are asked to plan to hold Shares for at least 5 years. Provides the option to invest using a retirement account. It was easy to invest in this fund through the SVX US platform, and this platform hosts other impact-driven investment opportunities.
  • Steward – the Steward Regenerative Capital (SRC) fund is a portfolio of secured loans made to a diverse collection of regenerative farms, ranches, fisheries, and food producers. The fund provides a fixed 6.50% annual interest rate, paid monthly, with a 9 month term.
  • CNote – technology platform that pools resources for investment in Community Development Financial Institutions (CDFI) funds. When you request to make an investment, they match your request with community partner needs. Their flagship fund currently offers 4% APY (the rate will change over time with the market environment) for 30 months term with no minimum investment, which was of most interest to me but they offer a few other investment options also.
  • Salish Sea Cooperative Finance – refinances high-interest student loans in Washington State by reinvesting its members’ financial resources, offering a 1% return.
  • RSF Social Finance – their RSF Social Investment Fund Notes supports positive social and environmental impact with quarterly to 3-year notes, on minimum investments of $1,000 to $25,000, and interest rates of up 4% annualized. Unfortunately it’s not available in Washington State where I live.
  • Black Farmer Fund – provides Black agricultural and food businesses in the Northeast U.S. with gifts, patient debt, and technical assistance to optimize their growth potential and social impact.
  • Carbon Collective – helps invest IRAs, brokerage accounts, trusts, in more green, sustainable stock & bond portfolios built for solving climate change.
  • EquityVest – a crowdfunding platform for the faith-driven community. I learned about it through a podcast episode with the president of New Way Homes, which is one of a few funds available for investment on the platform

Public equity stock markets investments

While private markets seems to have the a better opportunity for impact through additionality, I also wanted to have options that were available for investment within public equity stock markets so that I could invest from my existing accounts at large financial investment organizations for the IRA accounts I didn’t want to move away from those institutions yet. For the funds I found, I took a look at the different stocks that make up the fund to understand what they are actually invested in. I was also conscious of the expense ratio, since these fee eats into any gains. A few that I’ve found that are interesting include:

  • Change Finance – impact-driven, performance-focused strategies, including their Change Finance Diversified Impact US Large Cap Index (CHGX) which its current top holdings include Micron Technology, Alphabet (i.e. Google), and PayPal.
  • Nia Impact Solutions Fund – seeks long-term capital appreciation by investing in companies that contribute towards advancements in the areas of diversity and inclusion, sustainability and/or social justice. The mutual fund available as NIAGX, with the current top holdings including a fixed income mutual fund (FGXXX), IBM, and Stantec.
  • Adasina Social Capital – their Adasina Social Justice All Cap Global ETF (JSTC) is a highly diversified, global, all-cap portfolio that allows investors to align their portfolios with social justice values. Current top holdings include Mastercard, Hydro One, Visa, and NetApp.

This is just the beginning

I initially focused on investing money that was not within individual retirement accounts (IRAs), since the additional requirements/limitations of those accounts were more intimidating. I can easily invest my IRA in the funds available in public equity stock markets within their existing accounts and some of the funds I mentioned above do enable investment from retirement, but it will be a longer journey as I understand the limitations specific to these IRA accounts and move these investments to other funds more fully in line with my values.

I’m still doing a lot of learning and on the lookout for funds that are in line with my values and meeting my other needs. I’m just starting a course on Finance for a Regenerative Economy, which I’m hoping will provide more context and insight. If you have any suggestions or questions to share, please feel free to reach out!