In 2007, when I worked at The Forum for Sustainable and Responsible Investment (US SIF)— The national association for socially responsible investing (SRI) firms and professionals—I became the staff liaison for the Investors and Indigenous Peoples Working Group (IIPWG). One of IPWG’s main campaigns at the time was asking companies and investors to pressure the owner of the Washington, D.C. professional football team to change its name to anything else that was not a racist slur.
As you clean up the corks and streamers from New Year’s celebrations, finances may not be top of mind. With the holiday season fuss, many people forget to check on year-end to-dos in December. Good news: there’s still time to make some moves that can positively impact your 2021 tax situation and your overall financial health.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
IRAs can be opened and funded this year before April 15, 2022 (or October 15 for SEPS, SIMPLEs, and 401(k)s) to count for 2021. The deductibility of these contributions depends on the type of IRA as well as whether you are enrolled in a workplace retirement plan.
So you have money invested with Vanguard, BlackRock, State Street, or Fidelity, and you recently heard that these Asset Managers have failed to utilize their power as large shareholders of publicly traded companies to address structural racism.
You don’t want your money held at, or managed by a Company that is supporting voter suppression and other public policies that cause great harm to communities of color. After all that we have learned about racial injustice in American society, some companies are still, to this day, voting to approve all-white corporate boards of directors, or blocking shareholder efforts to improve corporate disclosures of lobbying activities and political contributions.
We finally get to take some victory laps! After years battling the previous administration, we are finally seeing executive branch actions that roll back its archaic rules and guidance that clearly benefited corporations and not investors.
The Securities and Exchange Commission (SEC), for example, recently issued new guidance addressing the criteria by which shareholders may submit proposals to the ballot for a shareholder vote. The guidance restores the original intent of the shareholder submission process in order to reduce the subjectivity of SEC staff interpretations, which typically blow in the political winds depending on which party controls the executive branch.
After wrapping up another season of end-of- year requests from non-profits, it seems to make sense to take a broader look at philanthropy and charitable giving.
Philanthropy in the U.S. is a massive undertaking. In 2020 Americans gave $471 billion to charitable causes. That is almost the same amount the federal government generally spends every month.
Why people choose to give, and what causes they support, is often a deeply personal matter. Some choose to support scholarships, while some support causes they think the government could or should cover; others to further a cause or ideal.
1: DESPITE SPILLS AND AIR POLLUTION, FOSSIL FUEL COMPANIES AWARD CEOS FOR ENVIRONMENTAL RECORDS
Executive bonus programs at fossil fuel companies, meant to encourage better environmental practices,
evolved to allow firms to award executives full bonuses even in years with major environmental damage or total emission increases.
2:NAVIGATING THE THICKET OF ESG METRICS
With socially responsible investment becoming mainstream, unpacking how environmental, social, and governance (ESG) metrics are analyzed at different firms becomes an important distinction for investors to understand.
3: COMMUNITY INVESTING: TOOLS FOR THESE TIMES
An important pillar of responsible finance, community investing has evolved over the past several decades. The resurgence of anti-racist discussions in the public narrative has invigorated new efforts to support BIPOC low-income communities.
4: EMPLOYEE OWNERSHIP ON THE RISE
Amidst the pandemic and Great Resignation, employee-owned businesses are increasing in the form of cooperatives and employee stock ownership plans (ESOP).
5: MICROSOFT AGREES TO RIGHT TO REPAIR
The movement to reduce electronic waste is picking up steam and corporate giant Microsoft is one of several tech firms bowing to federal pressure, consumer demands, and investor concerns to expand repair options.
As You Sow
The stock market ended the final quarter of the year with some measures higher and some measures lower, though for the year markets were solidly higher. For 2021, large company stocks rose 28.7%, small company stocks rose 14.8%, and foreign stocks were up 11.3%. Domestic bonds for the year were down 1.5 percent.
The initial phase of the COVID-19 pandemic in early 2020 created a sudden freeze in global economic activity on a historic scale. In the following phase—roughly beginning June 2020 and continuing to the present—the economy has experienced an astonishing rebound surpassing all expectations. The rebound has been fueled by unprecedented government stimulus programs in various forms, as well as the deployment of effective vaccinations, which helped bring people out again.
The past year was defined by incomprehensible loss—and for many, the losses were personal. In May, my father-in-law Bernie passed away on his 94th birthday. In the end, he said he was ready to go, but we are mourning the loss of an attentive and engaged family man who was like a second father to me.
In the midst of our grieving, I was thankful that we had done some planning ahead of time for this moment. With this recent experience in mind, here are some steps you can take to prepare in advance for inevitable end-of-life transitions.
Wall Street Wakes Up to SRI by James Frazier
Capitalism: Reformation or Revolution? with Carrie VanWinkle
A Conversation: Ebony Perkins of Self-Help Credit Union with Brady Quirk-Garvan
Download a full PDF copy here: Investing with Intent – Fall 2021
My conversation with Esther Park of Cienega Capital for my Smart & Soulful Money® podcast brought me more clarity and also opened my thinking to what’s possible. I hope it does something similar for you! A few of my takeaways from our conversation include a more grounded idea of change based on growing up through the cracks (spaces of possibility) and how powerful and transformative this type of change can be. Part of this is a “whole systems” perspective—the opposite of monoculture ways of thinking and implementing.
Also, there is so much power and opportunity stored away in charitable foundations and other structures like donor-advised funds. Opening the flow of these resources, in a way that is wise and inclusive, can mean critical transformation for addressing so many needs we have—from climate change to racial equity to the many social needs of our day. We don’t have to be Rockefellers to be a part of creating (and incubating!) systemic changes.