Understanding and Discovering Your Values

Often the most challenging aspect of impact investing is narrowing our focus.

Where do we want to make an impact? What social, ethical, or environmental causes weigh on our hearts and minds? Marrying money with meaning calls us to look within ourselves and discover what is truly paramount. It is a values exercise that taps into our beliefs, our backgrounds, our histories.

For some, this awareness comes easy. It is a compass that consistently directs financial, career, and personal decisions. For others, it is more of a challenge. There may be too many issues we want to alleviate or philanthropic endeavors that we want to honor. Homing in on personal values can also require some soul searching—and shedding of others' belief systems or expectations.

Wherever we each fall within this schism, it can be helpful to look to some tools to help discover or re-align with what matters to us most. From here, we can begin to determine where we want to invest our capital. This exercise of honoring and harnessing our values unlocks the potential for meaningful, impactful choices when it comes to where, whom, and what we choose to support. It is part of the philosophy of being “wealth conscious”: We can choose to appreciate what we have in our lives and to be intentional and purposeful with how we spend our time and money.

Because after all, the expectations of social or environmental change are first determined by the impact investor herself.

#1: Define Your Values

It is essential to define what matters to us individually. These values should not come from outside sources or a partner (while we can often share values with those we love and respect), but rather from a direct conversation with ourselves. To home in on these values, ask the following questions:

·       Whom or what do I want to help the most?

·       What do I want to help heal or perpetuate?

·       What local, national, or global issues concern me the most?

·       What social, ethical, and/or environmental causes am I passionate about?

·       When/if I have volunteered in the past, what energized me?

·       What gives me a sense of purpose?

·       Are my current investments connected to a broader impact I wish to have?

In asking these questions it is important to be generous with ourselves. The answers may not come immediately. Take time to reflect. By thoughtfully and honestly answering these values questions we begin to build our guiding principle(s) for deciding in what and whom to invest.

#2 Consider the Needs and Practice Being Wealth Conscious

So now we understand what drives us, but the next steps—where or what to direct our impact investing dollars—may still be overwhelming. In this case it is beneficial to research current needs and statistics. This can help to narrow focus. For instance, let's say you are passionate about improving food security, expanding access to clean water, and bolstering maternal health. Research to see the local, national, and/or global state of each issue. Approximately one-third of children in the world die each year due to malnutrition, according to the United Nations. Nearly one-third of the world's population does not have access to clean drinking water, according to the World Health Organization. And on average 808 women die every day from preventable pregnancy and childbirth complications, stated by the United Nations Population Fund. 

Let’s narrow that focus and look specifically to Africa where startups throughout the continent face a capital gap. Entrepreneurs there struggle to raise seed rounds, typically $10,000 to $100,000, which presents a huge obstacle for economic development. Eighty-six percent of social enterprises in emerging markets say that access to financial backing is a major constraint. And yet, small businesses account for 77 percent of all jobs in Africa, and as much as half the GDP in some countries. And small and medium-sized businesses create jobs at twice the pace of large corporations. This presents a huge opportunity for social enterprises to fill the gaps in critical goods and service provision. There are huge opportunities in early-stage investing to have a social impact and help these companies scale. 

Knowledge of these facts can provide direction as to what issues and global regions to further home in on.

#3 Discover Impactful Companies

Impact investing is investing in the people behind the companies that match your values. Therefore it is critical to research and vet the goods, services, and people working to alleviate these issues in order to make the most impactful and successful decisions. Look to companies driven by a social mission in the areas that align with your values, and analyze and screen them with the same diligence as with traditional investing. 

Growth-oriented entrepreneurial groups, including SPRING Accelerator and Unreasonable East Africa, as well as personal connections in the impact investing industry, can help to build awareness about mission-driven companies that are looking for funding. And each week, The Beyond Capital Podcast unveils a new episode that features an interview with a purpose-driven leader in the world of social, ethical, or environmental impact.

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At The Conscious Investor, it is our goal to shed light on topics that we find interesting, inspirational, and educational. Therefore, this article is strictly for inspirational and informational purposes only. It is in no way intended to substitute for professional investment advice, professional financial advice, or general counsel. To the extent that an article features the insight, opinions, or advice of an expert or company, the expressed views are those of the cited person or company and do not necessarily represent The Conscious Investor and its employees or affiliates.