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Can donations be cancelled out?

All of us have causes that we care about, and often we are so moved that we show our support financially. In fact, according to the 2016 World Giving Index, the United States is the second most generous country in the world based on charitable donations given and time spent volunteering. Fun fact: Myanmar holds the top spot and has done so for the last few years. 

You might care deeply about puppies and kittens, so you donate to SPCA International, or maybe you’re passionate about war-torn regions and endemic diseases, so you donate to Médecins Sans Frontières, you might even donate to the Natural Resources Defense Council, an environmental organization.

Our charitable donations can go a long way toward helping people in need around the world and at home. Our dollars go to tangible changes like supporting the treatment of malaria, finding a cure for cancer, or lunch programs for low-income children. These are all great causes that really make a difference in the lives of millions of people each year.

However, have you ever wondered if the companies in your investment portfolio are creating the very problems you’re trying to address through your charitable donations?

Back in 2013, Canadian journalist and author, Naomi Klein asked this very same question. She wrote an expose detailing how many of the most recognizable environmental organizations have large endowments that are invested in companies that are creating the same problems these organizations purport to combat.

Think: World Wildlife Fund investing in Royal Dutch Shell or The American Diabetes Association investing in Domino's Pizza. Doesn't seem right, does it?

Imagine that you’ve just given to Greenpeace, one of the few environmental organizations that does not invest in energy companies. However, 20% of your investment portfolio is comprised of ExxonMobil, Gazprom, Anadarko Petroleum, and other companies known for contributing to climate change and environmental degradation1. Your donation to Greenpeace is essentially being undermined by the polluting activities of the holdings in your investment portfolio. The amount of capital allocated to companies like ExxonMobil2 etc. far exceed the donations Greenpeace3 receives for their environmental protection efforts.

So what can you do?

  • Examine your investment portfolio. Take a look at the company names in your investment products. If you see ones you don’t like, divest. 
  • Then, reinvest. There are a host of investment products that do not hold companies you might find objectionable. Be sure to examine their holdings, the devil is in the details. 
  • Donate. You can now feel more confident that your charitable donations are not in conflict with your investment portfolio. 

Topics: The Stack Up

Amberjae Freeman

Amberjae Freeman

Amberjae brings more than a decade of experience in public and private sector research to her role at Swell, including a stint at the Royal Bank of Canada, where she specialized in ESG investing. She’s also spent time working in developing countries with cash-strapped NGOs—an experience that led her to believe that financial markets should be used as a vehicle for social and environmental change.

Read more about our six portfolios

1. http://www.sciencemag.org/news/2016/08/just-90-companies-are-blame-most-climate-change-carbon-accountant-says

2. http://news.exxonmobil.com/press-release/exxonmobil-earns-162-billion-2015-28-billion-during-fourth-quarter

3. http://m.greenpeace.org/international/Global/international/publications/greenpeace/2016/2015-Annual-Report-Web.pdf

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