Saturday, November 18, 2006

The diverse motivations for socially conscious financial decisions

I've tried and failed for months now to write a post addressing criticism of SRI/socially conscious personal finance strategies. Gradually it's occured to me that my problem is the diversity of reasons (or perceived reasons) for pursuing such approaches; if you misunderstand why people are doing something, your critique and their defense are going to go right past eachother.

So I thought I'd start by laying out some of the reasons I can think of for socially responsible financial decisions (I'm defining that as including not only investing and banking but also shopping/consuming):

  • "I want to have a direct, positive social impact."
    • This is certainly an admirable goal, and one that many of us do indeed have. But it seems like detractors get the impression that this is our only motivation, and try to tear down socially conscious investing by debunking it. And in some cases they can do a good job of that. While there are certainly some socially conscious financial practices that I think are solidly, directly positive-- community development banking, for one-- it's also true that it's harder to find a clear link between, say, investing in a socially responsible mutual fund and seeing a direct positive impact in the world. If that's your only motivation, you're likely to be disappointed.
  • "I want to have an indirect effect and influence other people."
    • This is probably the biggest one for me. I know that I alone have a very small impact. But I believe very strongly in the principle of considering the social impact of financial decisions-- and I want as many people as possible to a) be exposed to that viewpoint and b) start doing the same. So for me, a lot of why I do it is to help make it more visible. I do it so there'll be news stories talking about how much it's grown. I do it so I can tell you guys about it on my blog! That sounds kind of silly, but I think it's important.
  • "I do it because of how it makes me feel."
    • I think there are two sides to this. One is to do it because it makes you feel good about yourself. I'm not saying that's completely a bad thing (it helps provide the psychological support to keep you going, for one), but I do think it can be problematic when it makes folks complacent. You have to be realistic about what your choices actually accomplish, and not let other opportunities slip past you because you're wrapped up in the smug feeling of being a do-gooder.
    • But on the other hand, I think it's really valid to want your financial decisions to be consistent with your values. It's a decision about living your life more fully in tune with what you believe, and feeling better, more comfortable, more authentic as a result. This is important to me-- something seems to click into place when I'm making a values-based choice, so that I feel more at peace with myself. The challenge here, of course, is that it is virtually impossible to totally avoid financial choices that have problematic implications, so when you become more conscious of the context of your decisions, you also end up feeling like more of a hypocrite, complicit in things you oppose. I think the key here is just to be realistic about what options you actually have, and instead of kicking yourself when good choices are difficult or unavailable, get involved in increasing the options for everyone.
What do you think? Do you think of yourself as making socially conscious financial decisions? If so, do these describe your reasons, or are there others I've missed? (I'd love to hear you talk about your reasons and motivations in your own words!) If you don't, why not? Is it a practical choice-- "It doesn't do enough/any good; I can find better ways to support my values"-- or are you opposed in principle?

Related posts:
Guide to Socially Responsible Investing: Part 1 (what is SRI?) and Part 2 (some SRI options)
Community Development Banking
Socially Conscious Finances: Spotlight on GLBT
All about fair trade and where to find it
Locally-owned businesses vs. corporate chains


Tiredbuthappy said...

Bravo, Penny. Another thought-provoking post.

No time to think/write about why I practice SRI, but I'll chew on it and try to come back here or respond on my blog.

FWIW, my own politically motivated financial decisions have been made stronger because you write about SRI. I might have wavered more if you weren't over here being consistent and articulate about your values.

Speaking of values, how cool is it that you're using the word VALUES? For me that word has icky right-wing "family values" connotations, but you're using it from a leftist perspective. Values as in ethics. Values as in whatever you value. It doesn't necessarily mean you think God created woman out of Adam's rib or some sh**. Yay, Penny! Take back the word VALUES.

I throw the word "family" around a lot for the same reason--to take it back from people who want to define it in a narrow way.

Penny Nickel said...

Thanks, TBH, I can't tell you how much that means. And it goes both ways, too; it's way easier to keep writing about these issues I care about when I know you're reading (and writing about similar things yourself).

I'm looking forward to your response and as always will gladly link to it!