SMUG MONEY: Principles with your profit? Don’t stop giving

Written by Rebecca O'Connor on 13th December 2016

I don’t mind admitting that one of the problems with a website that teaches you how to make money from being nice is that it could be viewed as inadvertently undermining charity.

The basis of charity is giving. Whether that’s to the rest of humankind/ animals/ the planet. And the giving is done with no hope or expectation of reward. It is a selfless act, done expressly for the benefit of the Other.

The message of this website, on the other hand, is that you can make money by arranging your personal finances with providers that make a positive contribution to society and to the environment, such as Charity Bank, Ecology Building Society, or Triodos Bank, to name a few.

In other words, that you don’t have to be selfless to do the right thing with your money.

Occasionally, I get a pang of guilt that this message might be misinterpreted as anti-charity; as a way of selling the unrealistic ambition that it is possible to do the right thing by oneself and others at the same time and that self-sacrifice, the very basis of charity, is wrong.

Christmas always makes me think a lot about charity and how I need to give more, volunteer more, campaign more and just be a bit more mindful of those for whom life = suffering and how frikkin’ lucky I am.

It might be the sombre sound of the Salvation Army band at London Bridge station this morning; the homeless person with a Santa hat on, or the reality jolt of a friend’s father passing away last week, but now seems like a good time to put on record that the intention of Good With Money is not to deflect money that would otherwise go to charity into investment.

The exercise of trying to bring the impact of our money on the world to the fore and suggesting that people put their savings and current accounts into worthier places, such as mutually owned organisations or renewable energy projects rather than oil funds, should not be interpreted as misplaced philanthropy.

Some people believe that charity and investment are separate – that there is no place for ethical thoughts when deciding how to generate profits on your ISA and pension money, because that is what charity is for. According to this world view, there is no place for moral considerations in investing.

Thanks to the huge growth of Environmental Social Governance (ESG) in investment, this is now an archaic view, although it will be some time before the entire investment industry is turning its nose up as Randgold Resources or BP because of the harm they do. It’s possibly unrealistic to expect that the “greed is good” hardcore of the City will ever dissipate entirely.

One cannot be too judgmental. According to some neurological studies, it is true that it is hard to fire up the selfish, survival parts of our brain at the same time as the parts that govern empathy, compassion and concern for the greater good. Which explains why some of the world’s biggest philanthropists are also some of its greatest wrong ‘uns. But it’s not impossible.

Intertwining “charitable” considerations in financial decision-making does not mean “don’t give to charity”. It means continue to give to charity, and if you do, then all the more reason to make sure your personal finances are not undermining your own charitable donations (this Christmas, mine have been Crisis, the Wikimedia Foundation, the Dogs’ Trust and Children in Need).

The wonder of the evolution of ESG is that charity and impact investing can now co-exist. You can give, purely selflessly, to your chosen charities; meanwhile your pension can also match the values you hold dear, if you choose wisely. This degree of choice is something to cherish and is proof of how far some large businesses have come in humanising themselves.

But it is true that the crossover does not work the other way. You cannot expect a profit from charitable giving. The reward of charity is nothing more than the knowledge of having given to charity and the vague sense of peace that often comes with it.

So if you are getting into impact investing and responsible money, who knows, maybe even as a result of stuff you have read on this site, then don’t feel guilty – you are not undermining the charitable endeavours of all those wonderful people who give their lives to good causes. You are not deflecting money that you would have otherwise given to them. You are helping them. Because in investing with kindness, through putting your money into institutions that have some kind of moral code, you are helping society and the planet heal, taking the strain off the charities that are constantly picking up the pieces of a world broken by many of the activities that responsible investing can fix.