I don't want dirty money
August 14, 2011 6:38 PM Subscribe
When all is settled from a deceased family member's estate (though this may take a while), I will be inheriting a substantial amount of money - including about 150k from sold stocks (after taxes). The vast majority of what I'll be inheriting was earned from fairly ethical means, but most of what will come from the stocks are from corporations that I consider pretty shitty and abhorrent. What's the best way to do something positive and helpful to communities and people with this money? Simple donation to organizations and charities with solid reputations? Setting up a charitable trust? Please help me with some ideas.
There are a lot of organizations out there that help with large-scale charitable giving, setting up trusts (I think the amount of money you're considering giving may be a little shy of what would be an effective trust, but my company's clients work with such huge sums of money that my scale might be way off) and/or investing in a socially responsible way.
You may just want to speak with the financial advisor you might be working with to sort out your inheritance. It's certainly not an unusual question in the world of finance.
posted by xingcat at 6:57 PM on August 14, 2011
You may just want to speak with the financial advisor you might be working with to sort out your inheritance. It's certainly not an unusual question in the world of finance.
posted by xingcat at 6:57 PM on August 14, 2011
If I were you, I'd consider investing it in corporations that do the opposite of whatever bad things you're taking issue with. If some of it was oil stocks, invest in clean energy companies. If it was in tobacco companies invest in companies that create products that promote healthy lifestyles or non-smoking. That way, not only are you taking the investment away from the bad companies, you are promoting ethical businesses in their place, and those ethical businesses will hopefully also take business away from the bad companies.
Just donating it to charity is good, but if you want a more ethical business climate, it would be more helpful to directly invest in a more ethical business climate.
posted by jacquilynne at 7:01 PM on August 14, 2011 [11 favorites]
Just donating it to charity is good, but if you want a more ethical business climate, it would be more helpful to directly invest in a more ethical business climate.
posted by jacquilynne at 7:01 PM on August 14, 2011 [11 favorites]
Yes, be sure to talk to a financial adviser. And then, with kudos to this good comment, it makes sense to donate to established charities (rather than trying to do something on your own).
posted by ldthomps at 7:04 PM on August 14, 2011 [1 favorite]
posted by ldthomps at 7:04 PM on August 14, 2011 [1 favorite]
What are your other goals besides ethically laundering the money? There are many options for doing that, so what are your second-tier objectives?
Me, I like belonging and being part of things. I have a few causes I really care about, and I like to see those goals pursued systematically and strategically. So, I would steward the money so that I could be a regular major donor at an organization I cared about, and over time, hopefully join its policy committees or board and be a long-term supporter of its success.
But suppose you want to empower fledgling kitchen-table grassroots groups that are trying to make a difference for themselves and their neighbors. These groups are often doing great work on a shoestring, but the flip side is that they're not professionalized yet. To give to them often requires a donor to do serious vetting, and sometimes also provide capacity building or professional support (e.g., if they're not legally recognized as a nonprofit yet, the foundation might serve as their fiscal sponsor). In that case, I'd donate to a small grantmaking organization that operates on this model.
But suppose you cared about your hometown, but felt it was getting worse and worse. You might want to fund local city council campaigns until ethical, smart people held a majority of seats.
The options vary greatly in what could be achieved, in the amount of time, and in the kinds of skills that would be necessary. Why don't you tell us more about what you care about and think you'd like to do?
posted by salvia at 7:12 PM on August 14, 2011 [1 favorite]
Me, I like belonging and being part of things. I have a few causes I really care about, and I like to see those goals pursued systematically and strategically. So, I would steward the money so that I could be a regular major donor at an organization I cared about, and over time, hopefully join its policy committees or board and be a long-term supporter of its success.
But suppose you want to empower fledgling kitchen-table grassroots groups that are trying to make a difference for themselves and their neighbors. These groups are often doing great work on a shoestring, but the flip side is that they're not professionalized yet. To give to them often requires a donor to do serious vetting, and sometimes also provide capacity building or professional support (e.g., if they're not legally recognized as a nonprofit yet, the foundation might serve as their fiscal sponsor). In that case, I'd donate to a small grantmaking organization that operates on this model.
But suppose you cared about your hometown, but felt it was getting worse and worse. You might want to fund local city council campaigns until ethical, smart people held a majority of seats.
The options vary greatly in what could be achieved, in the amount of time, and in the kinds of skills that would be necessary. Why don't you tell us more about what you care about and think you'd like to do?
posted by salvia at 7:12 PM on August 14, 2011 [1 favorite]
At the very least, invest it in socially responsible investment (SRI) mutual funds. Four that I recommend are:
Domini
Parnassus
Pax
Winslow Green
posted by intermod at 7:27 PM on August 14, 2011
Domini
Parnassus
Pax
Winslow Green
posted by intermod at 7:27 PM on August 14, 2011
Give it to animals! They're never bad guys, and I'm sure there's a local no-killl rescue operation in your neck of the woods that would go nuts for a huge donation.
posted by mckenney at 8:04 PM on August 14, 2011
posted by mckenney at 8:04 PM on August 14, 2011
Please, please, please talk to a financial advisor before you donate anything at all.
posted by Miko at 8:06 PM on August 14, 2011 [5 favorites]
posted by Miko at 8:06 PM on August 14, 2011 [5 favorites]
Talk to a financial advisor and an accountant. But I encourage you to consider putting your money into businesses that act in accordance with your values. If you go back throughout history, all sorts of wealth has come from all sorts of bad things. There's no reason you have to let that legacy taint the money and keep you from making choices that incent good business practices. You're welcome to donate it or do whatever makes sense for you, of course, but you could just as well invest it in companies that mean something to you, whether as part of your own portfolio or a foundation/trust of some sort.
posted by Chaussette and the Pussy Cats at 8:13 PM on August 14, 2011 [1 favorite]
posted by Chaussette and the Pussy Cats at 8:13 PM on August 14, 2011 [1 favorite]
150k is not nearly enough to sustain a foundation. Foundations have minimum expenses: board of directors, accountants, a little office space somewhere, etc. Even if you can get friends and family to help out and run the foundation out of someone's home on an absolute shoestring, you'll be consuming several percent per year of the seed money just to hang out a shingle. I've seen rules of thumb that say a million is the absolute minimum, so forget the foundation. Even the trust that you'll have to keep the assets is going to bleed you for 1% a year, so take that into account. The longer it exists, the less you'll have to do good with.
So, where can you, with the resources available to you, make an impact? It's a very difficult question. The problems overseas are unimaginably worse than in the U.S., but it's also harder to know that you're permanently improving people's lives.
My instinct would be to put it into a few, higher-impact places. Find a food bank that's looking to open a new location, or a homeless shelter that desperately needs staff. If control is important to you, consider giving one large gift rather than 10 smaller ones.
posted by wnissen at 8:51 PM on August 14, 2011
So, where can you, with the resources available to you, make an impact? It's a very difficult question. The problems overseas are unimaginably worse than in the U.S., but it's also harder to know that you're permanently improving people's lives.
My instinct would be to put it into a few, higher-impact places. Find a food bank that's looking to open a new location, or a homeless shelter that desperately needs staff. If control is important to you, consider giving one large gift rather than 10 smaller ones.
posted by wnissen at 8:51 PM on August 14, 2011
Also, please Google and read "Criticisms of Kiva" etc, seeing as it's recommended here.
Really, an informed advisor is a better resource for this question than AskMe, especially for multi-thousand-dollar donations.
posted by Miko at 8:58 PM on August 14, 2011 [1 favorite]
Really, an informed advisor is a better resource for this question than AskMe, especially for multi-thousand-dollar donations.
posted by Miko at 8:58 PM on August 14, 2011 [1 favorite]
I'd recommend the acumen fund if you want to give some of it away.
posted by sninctown at 10:08 PM on August 14, 2011
posted by sninctown at 10:08 PM on August 14, 2011
Once you figure out how much you want to donate, write a list of the things you care about and then narrow it down. Then go online to somewhere like Charity Navigator and choose the top ten charities listed there for the cause you care about.
I'm not a big fan of the local charity over international/overseas charity unless you are already involved, want to volunteer with that charity or have particular ties to a local cause. Often international charities can do a lot more overseas with funds than a charity in the U.S.
Once you get ten charities that are reasonably well rated, email them and say that you want to make a large donation so you would like to get copies of their financial and operational reports and a list of three underfunded programs they have. Ballpark your amount.
Write off any charity that doesn't respond to you within a month or gives you a round-around on the reports.
Then sit down with a pen, and go through the reports. Research criticism of the charities. Look at the programs they're asking for and see if there's something that clicks. If nothing does, but a charity does, make an unrestricted donation.
Oh! And ask them about their financial planning for the future, and code of ethics.
Don't look at fundraising videos or photographs. They appeal emotionally and don't actually tell you anything about how effective the charity is in pushing forward the cause you're supporting.
And write down all your questions that came up when you were researching, and ask the charity to answer. Don't feel awkward about asking tough questions.
Don't look at the percentage of admin to operations, as long as it's less than 40%. Look at the salary of the top staff (most charities in the US have to file that, or they can give you a ballpark figure) compared to similar charities to see if they're overpaid. The admin/ops thing is largely accounting - it is remarkably easy to reassign categories to show a lower overhead. What you want to look for is *effectiveness*.
Look at how much they spend on fundraising - more than 25% should be a red flag for sustainability.
And now you have a financially sound charity that answers your questions openly and works for a cause you're passionate about. It sounds like a lot of work, but you will make a far bigger difference supporting one great charity than spreading it around a dozen average places.
You can either make a one-time donation, or pace it out - both benefit the charity a lot, and you should ask your financial advisor what works for you.
Make sure to tell the charity what level of contact & recognition you want, if you want to get regular reports, be named as a donor etc.
And congratulations on making one of the healthiest decisions you can. We had a similar situation, and it was much easier to deal with the rest of the money once we had given a chunk of it away to causes we loved and knew worked well.
(Also: pick smaller over bigger if you end up with two charities you like on your shortlist. Your money will make a bigger difference in the smaller charity)
posted by viggorlijah at 10:40 PM on August 14, 2011 [2 favorites]
I'm not a big fan of the local charity over international/overseas charity unless you are already involved, want to volunteer with that charity or have particular ties to a local cause. Often international charities can do a lot more overseas with funds than a charity in the U.S.
Once you get ten charities that are reasonably well rated, email them and say that you want to make a large donation so you would like to get copies of their financial and operational reports and a list of three underfunded programs they have. Ballpark your amount.
Write off any charity that doesn't respond to you within a month or gives you a round-around on the reports.
Then sit down with a pen, and go through the reports. Research criticism of the charities. Look at the programs they're asking for and see if there's something that clicks. If nothing does, but a charity does, make an unrestricted donation.
Oh! And ask them about their financial planning for the future, and code of ethics.
Don't look at fundraising videos or photographs. They appeal emotionally and don't actually tell you anything about how effective the charity is in pushing forward the cause you're supporting.
And write down all your questions that came up when you were researching, and ask the charity to answer. Don't feel awkward about asking tough questions.
Don't look at the percentage of admin to operations, as long as it's less than 40%. Look at the salary of the top staff (most charities in the US have to file that, or they can give you a ballpark figure) compared to similar charities to see if they're overpaid. The admin/ops thing is largely accounting - it is remarkably easy to reassign categories to show a lower overhead. What you want to look for is *effectiveness*.
Look at how much they spend on fundraising - more than 25% should be a red flag for sustainability.
And now you have a financially sound charity that answers your questions openly and works for a cause you're passionate about. It sounds like a lot of work, but you will make a far bigger difference supporting one great charity than spreading it around a dozen average places.
You can either make a one-time donation, or pace it out - both benefit the charity a lot, and you should ask your financial advisor what works for you.
Make sure to tell the charity what level of contact & recognition you want, if you want to get regular reports, be named as a donor etc.
And congratulations on making one of the healthiest decisions you can. We had a similar situation, and it was much easier to deal with the rest of the money once we had given a chunk of it away to causes we loved and knew worked well.
(Also: pick smaller over bigger if you end up with two charities you like on your shortlist. Your money will make a bigger difference in the smaller charity)
posted by viggorlijah at 10:40 PM on August 14, 2011 [2 favorites]
Bear in mind that holding the stock in Evil Corp, Inc. does very little to benefit that entity, even if you owned a lot of it. After the initial public offering the trades of stock all occur between parties other than Evil Corp, Inc. They only tangentially benefit from the perceived good value of the stock because the corporation often still holds some of its own stock -- but even that is meaningless unless they plan to sell.
So, let this ease your conscience a little. You may own their stock but you aren't financing them in any way. If it does make you feel better to divest it, by all means do so after you have consulted a financial adviser.
posted by dgran at 7:04 AM on August 15, 2011 [1 favorite]
So, let this ease your conscience a little. You may own their stock but you aren't financing them in any way. If it does make you feel better to divest it, by all means do so after you have consulted a financial adviser.
posted by dgran at 7:04 AM on August 15, 2011 [1 favorite]
It would take about $5,000-$10,000 (for tools and rent, depending on the cost of rent where you live) to start up a volunteer-run bike collective. Add another $20,000 for one salaried person to get it up and running the first year or two, and you've started a bike collective where people can learn how to work on their own bikes. I could talk to you for hours about how to go about doing this, could set you up with contacts to find people and tools, information, setup, etc. There is a LOT of demand for bike collective organizations right now.
Or your own favorite cause.
The question is: do you want to put work into starting something needed and new? Or do you want to just put your money somewhere and be done with it? There are a lot of right ways to go about spending your money, and each will confer different benefits.
posted by lover at 12:53 PM on August 15, 2011
Or your own favorite cause.
The question is: do you want to put work into starting something needed and new? Or do you want to just put your money somewhere and be done with it? There are a lot of right ways to go about spending your money, and each will confer different benefits.
posted by lover at 12:53 PM on August 15, 2011
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As someone in education, I greatly appreciated the grants/scholarships I received. (In fact, feel free to donate to my student loans, just kidding). I even was able to meet some of the family members who had established the scholarships which was meaningful to me (talking about small scholarship - $500). You could do something similar through church/school/local organization.
Or you could do something along the lines of this book I read recently. He gave out one time gifts to needy families.
posted by quodlibet at 6:55 PM on August 14, 2011