Philanthropy and Impact Investing: Making a Difference with Your Wealth

Once you have enough money to meet your basic needs, cover retirement savings, and leave a legacy to your loved ones, you may be looking for ways to use your wealth to give back. When considering your philanthropic endeavors, you’ll want to closely review how you can invest in order to make a tangible impact that is aligned with your values. This might include researching topics like ESG investing, the tax implications of charitable contributions, and ways to increase your impact.

Here are some points to consider as you seek to make a difference through your investing.

Learn about different philanthropic and impact investment types

Before you consider how you want to invest, it may be useful to first gauge the different investment types available to you. ESG investing, also known as environmental, social,  and governance investing, is one option, as is SRI, or socially responsible investing. The key difference between the two is that SRI takes ESG investing to the next level by choosing investments based on certain ethical considerations, like avoiding companies involved in the gambling or tobacco industries.

You may find it helpful to research different ESG and SRI-focused businesses by reviewing company websites and available reports and by speaking to investment professionals to assess which companies prioritize ESG and SRI as part of their business operational strategies. Impact investing, which can prioritize clearly identified goals (like clean energy or education) over upfront corporate profit, is another option to explore, especially as you consider your investing from a philanthropic perspective.

Align your goals and your financial philanthropy

Once you have decided to make an impact with your philanthropy, you may find it useful to identify specific philanthropic goals and priorities. Ask yourself which issues you care about then outline your goals and map them to investments that match. Whether you speak about them with trusted investment professionals, your family and loved ones, or other investors, you can clear the way to making intelligent, thoughtful decisions about where to invest that will make a difference to you and to the world at large.

Choose your investments

After you’ve aligned your goals and conducted your research, you may be ready to select your investments. Whether you invest on your own or leverage the expertise of an investment advisor, be intentional and mindful about your selections. You’ll also want to consider which types of accounts to use, which may include a donor-advised fund (DAF) or sending money from your IRA straight to a charity as a qualified charitable distribution. Consider letting your impact investment priorities guide you in making these decisions, as well as your philanthropic goals.

Keep learning and diversifying your portfolio

One of the pleasures of impact investing and philanthropy is that there is always room to grow and learn about new ways to make a difference with your money. You may find it beneficial to regularly review your investments and seek out different companies and causes that align with your goals. Through a well-thought-out approach to charitable giving, you can feel good about your impact, invest in accordance with your principles, and help generations of people still to come.

Media Contact Information

Source: Northwestern Mutual

Contact: Don Klein, 1-800-323-7033

Country: USA