At Align Financial, our mission is to help clients align their money with their life. And for many people, this includes finding ways to make a greater impact with their wealth. Indeed, investors are increasingly allocating their assets more purposefully. Morgan Stanley reports that 84% of investors say they’re interested in impact investing—that is, supporting companies that make a positive difference in the world.

But making an impact isn’t limited to responsible investing. In fact, there are many ways you can effect change by strategically directing your dollars to organizations and businesses that share your values. Whether you want to change the world, shape your legacy, or simply be more mindful about where your money goes, here are three strategies for making an impact with your wealth.

Strategy #1: Spend More Mindfully

In the United States, personal consumption has historically averaged about 70% of gross domestic product (GDP). That means our personal spending habits literally drive the economy. Imagine the impact we could make if we used this power for good.

Support Mission-Driven Businesses

One way to be more mindful about your spending is to support companies that are actively trying to better the world. There are a multitude of mission-driven companies that are committed to positive change, either by improving the environment, promoting social equity and justice, or treating their employees well.

On the other hand, there are many institutions driven by values that may not align with your own. These organizations often make headlines, and you probably have a few in mind as you’re reading this article. You may decide you no longer wish to support them with your spending.

Of course, everyone’s values and goals are different. However, being more mindful about where you spend your hard-earned dollars can make a significant impact over time. It can also help you feel better about yourself and your money.

Shop Local When Possible

Shopping local is another great way to make an impact with your wealth by strengthening your community.

Supporting local businesses can help boost the local economy and provide jobs for residents. According to data from Intuit Mint, for every $100 spent at small businesses, $48 is put back into the local economy.

Moreover, shopping local can help reduce dependency on conglomerates with less commitment to their communities. In some cases, these larger corporations may also have unfavorable business practices compared to the small businesses in your community.

Strategy #2: Develop a Strategic Giving Plan

By nature, we Americans tend to be a charitable bunch. In fact, despite being a year of many unprecedented challenges, Americans gave a record $471 billion to charity in 2020. Moreover, charitable giving accounted for 2.3% of GDP in 2020.

Yet despite our charitable inclinations, many of us fail to measure the impact of our gift after writing the check. The good news is you can make a greater impact with your wealth by developing a plan to give more strategically.

For example, donor-advised funds (DAFs) can be an effective way to financially support the causes most important to you. These accounts are set up within a charitable organization such as a community foundation and offer increased flexibility and efficiency over many other charitable giving methods.

Because of the potential advantages, DAFs have soared in popularity in recent years. Grants from DAFs to qualified charities totaled nearly $35 billion in 2020, representing a 27% jump from 2019 and the highest DAF grant increase in a decade, according to NP Trust.

Of course, this is just one way to be more strategic about your giving practices. A trusted advisor can help you develop a giving plan that supports your values and financial goals.

Strategy #3: Invest with a Purpose

By now, you’re likely aware of the various ways to invest according to your values. For example, you may have heard of sustainable investing, socially responsible investing (SRI), and of course, environmental, social, and governance (ESG) investing. Though the terminology varies, investing with a purpose is becoming an increasingly popular way to make a greater impact with your wealth.

Indeed, interest in ESG investing soared in 2020 and 2021 as the Covid-19 pandemic and Black Lives Matter movement shined a light on social inequities and injustices. And with climate change at the forefront of many people’s minds, growth in ESG assets is expected to continue in 2022 and beyond. According to research from Bloomberg, global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.

For decades, the emphasis in investing has been on generating higher returns for shareholders despite the associated costs. Fortunately, individuals are becoming more powerful and intentional when it comes to strategically directing their investment dollars to influence positive business practices.

And you don’t have to sacrifice financial gain to invest with a purpose. That means you can make an impact with your wealth while also achieving your personal financial goals.

Do You Want to Do Well While Doing Good?

At Align Financial, we believe the key to feeling good about your wealth is aligning your money with your values. Everyone’s definition of financial success is different. And as we accumulate wealth, part of this definition may include giving back and making an impact on the world around us.

If we can help you align your money with your life and make a greater impact with your wealth, please don’t hesitate to get in touch. We’d love to hear from you and see if we’re a good match.