Impact Investing … For As Little As $20

Impact Investing seems like a remote term for many young Millennials just beginning their careers. This is especially true when student loans and rent is consuming 50% of their monthly income. Investing, or even thoughtful investing, might seem very far off.

However, if we don’t mobilize enough resources in the right direction then our future won’t be very profitable, or sustainable, for anyone. Climate change and economic inequality require huge shifts in spending and mindset to make up for decades of subjugation. Millennials are in a unique position because they will be living with the consequences of previous generations’ failure to address these issues. Because of this, they also face the potential of a lower standard of living than that enjoyed by their parents.

Millennials must meet a dual challenge. With slow wage growth and a retirement system in disarray, they must be more vigilant about saving and investing. They also must be at the forefront of an effort to change our priorities as a society — in particular, to realign our resources and our values. The problems ahead of us can seem overwhelming. But I remain optimistic, and I know that the new generation is critically insightful of their finances as well as their values. They want their money and their time to make a positive change in the world.

In the article below, I’m going to make the case that, even if you don’t think you’re ready, there is no time like the present to get serious about saving and investing. And as you begin putting together an investing strategy, I urge you to be conscious of the social impact of your assets from the beginning. Even with just a little spare change, you can begin securing a better future for yourself, and for the planet.

People’s Climate March 2014 — Eduardo Munoz / Reuters

What is Impact Investing?

You’re probably familiar with the term socially responsible investing. The basic idea is to avoid investing your money, directly or indirectly, in companies that harm people and the planet. You might choose, in other words, to invest in an ‘SRI fund’ that doesn’t have holdings in companies involved with, for example: poor environmental practices, arms dealing, animal testing, violating workers’ rights, etc. This concept has been around for a while. Activists boycotts against companies doing business in South African helped bring down apartheid.

Impact investing includes this idea, but takes it a step further. Instead of just keeping your money out of companies doing the wrong thing, you actively search out companies trying to make a positive change in the world, and also use your leverage as an investor to encourage more companies to do the right thing. The Global Impact Investing Network (GIIN), a leader in the field, describes it impact investing as: “investments made into companies, organization, and funds with the intention to generate social and environmental impact alongside a financial return.”

One way to think about impact investing is as a continuum. At one end of the spectrum is investing purely for profit, for market return, without regard for social consequence. This is a “Financial First” approach. At the other end is philanthropy, giving for the sake of social good, without the prerequisites of financial self-interest. This is the “Impact First” approach. In between are all the complexities of impact investing. Trying to find a fair return on your money while at the same time supporting issues you deeply care about.

My brief sketch….*ESG = Environmental, Social & Governance

Large, mainstream financial firms like Goldman Sachs and BlackRock® have recently embraced the practice of impact investing. On the one hand, that’s a good development: a sign that big firms know their customers and the general public cares about where their money is invested. On the other hand, there is always the danger that, just like “green marketing,” the concept will be appropriated by large institutions trying to “greenwash” their brands without making a real commitment to social change.

Where to Begin

First, try to eliminate or consolidate debt; get serious about setting a budget and saving on a regular basis. Apps like Mint, WealthFront and Betterment for our investments. These applications have automated the entire investment process which has increased the connection between people and their finances. This has been especially true for individuals that have been historically disadvantaged because of brokerage fees and investment minimums-the “unbanked” or “underbanked”. However, these apps compel us to become more critical of where we invest our money.

If you haven’t begun investing yet, you can start small and have a powerful impact. Micro-investing apps like Motif can literally help you invest spare change, a few dollars at a time and move it into a SRI account (Acorns is another microinvesting app). This is a welcome change from old-school investing, which often required a substantial minimum investment. Even better, with only $20 you can invest in Calvert Foundation’s Calvert Foundation (which is actually a nonprofit charity rather than a ‘private foundation) has created the community investment note which is funded by and allows you to invest in some of amazing organizations (such as Equal Exchange Coffee which has a delicious Espresso Silk blend)

If you already have an IRA or 401(k), start with “negative screening” to make sure your money isn’t being put to use in ways you find objectionable. As You Sow (Oakland’s very own) can help you identify investments with ties to the fossil fuel industry with their nifty app:

Sites like ImpactSpace, Your SRI and Social Funds can help you screen your investments by a wide range of criteria.

Next Steps

Next, you can move on to “positive screening” — finding companies or funds actively committed to making the world a better place. The screening sites above (Your SRI) can help you target your investments to the issues most important to you. Don’t fall for the false dichotomy of “Doing good vs doing well”. Many Socially Responsible funds are now beating their traditional counterparts.

Be a conscious investor. Applications like WealthFront and Betterment (sometimes known as “robo-advisors) have allowed us to track our finances in real-time on our smartphones, and to automate and streamline the process of investing. This has given us greater control over our bills, investments and savings — and provided access to financial services for the “unbanked” or “underbanked”. Nevertheless, these applications have their disadvantages as well. Once our monthly finances are automated they are also easily forgotten. Without our consent, our investments could potentially fund companies that are destroying the planet.

Similarly, if you invest with a financial advisor, make sure you “look under the hood” of your investments and know what your money is funding. For example, a foundation may have programs that fight lung cancer in East Asia but have an endowment invested in Phillip Morris. Or, you could be volunteering your time cleaning up the beach but have your 401K investing in those same beach polluters. Ask your account representative, investment advisor or fund manager where your money is invested. “I don’t know” isn’t an acceptable answer. Socially Responsible investments (SRIs) are funds that have a rating that goes beyond financial return. It doesn’t take much time to examine your investments. And don’t assume that you are at the mercy of your financial advisor.

Investing For A Future We Want

Impact Investing for the Long Run

Continue to educate yourself about the range of options available. I’m not a registered financial advisor, but I would like to highlight a few options that should be widely available for any investor — either through a retail agency like Fidelity, or through your retirement plan. Some of these funds might have a slightly higher administrative cost than a low-cost S&P index fund — but still pretty minimal at .15%.

  • Calvert Socially Responsible Mutual Fund or their Large Cap Index Fund performs very well and is fairly common in many large retirement portfolios
  • TIAA Responsible Fund –is a pretty rigorously examined fund
  • Walden Equity Fund — Walden screens out investments in weapons, nuclear power, alcohol and tobacco, and otherwise seeks companies with a positive record for social responsibility but holds stock in McDonalds
  • Domini Social Investment — I had the chance to meet Amy Domini herself, very thoughtful person who runs a thoughtful company that invests in high performing tech companies with beneficial impact.
  • Finally, you can look into alternatives to traditional banking like Peer To Peer (or P2P) borrowing and lending services: SoFi, Prosper, LendUp


Impact investing is an emerging field and there are thousands of people willing to give you their opinion (me included). Below are several influential resources that helped establish the field impact investing and are committed to seeing it grow.

  • Global Impact Investing Network — GIIN: They are paving the road with their tools and literature to formalize the impact investing space. They also run ImpactBase: Cruchbase for impact.
  • FB Heron Foundation: Has committed to going “all in” with their endowment and is leading the way in innovation of how philanthropies can be catalysts in the new economy.
“All of our financial assets must be our mission” -Clara Miller, FB Heron Foundation
  • Sonen Capital: The founder, Raul Pomares, literally wrote the book on Impact Investing. @SonenCapital
  • Resource Generation: RG organizes young people with wealth to leverage their privilege for social change.
  • Impact Investing Podcast: A new podcast from a young guy on the east coast that interviews the leaders in the impact investing space.
  • Impact Alpha (David Bank): A intelligent group of business media professionals that understand the importance of critical thought. They have an insightful slant regarding impact investing news and they operate ImpactSpace (mentioned above).

And here are some good people to follow on social media:

  • Fran Seegull, @franseegul, Chief Investment Officer and Managing Director, ImpactAssets, @IAimpactassets. Fran is a fresh voice of critical thought and innovation in the world of Impact investing.
  • Matthew Weatherley-White, deconstructs & reconstructs impact investing on a very amiable level. He works with some of the wealthiest family firms in America and pushes them to make bold changes in the investment of their resources.
  • Margot Seigel and Kate Poole: Two millennial’s voices on impact investing and the social implications of businesses. They are both from Regenerative Finance, an organization that looks critically of the role of money in our society.
  • Jed Emerson: The founding CEO of Larkin Street Youth and a pioneer in the Impact Investing community. Termed the phrase “Blended Value” as a descriptor for practices that create both financial and impactful returns
“Capitalism can do better” — Matthew Weatherly-White

Putting together the right investing strategy that is aligned with your values is a long-term process. Impact investing can become a fruitful journey that helps you understand what is truly important to you and so that you can create for your future. However there is a alternative investment you can make right away: with your own time and energy. Volunteering for worthy organizations makes you a better citizen today, and a more informed and conscious investor tomorrow. It exposes us to communities that may be very different from our own. We then begin to develop empathy, compassion and a more complex understanding of the issues of our world. Being of service helps us become truly invested in the issues of our world and this helps us re-focus on what is truly important.

Hope this helps,