Pride Month: LGBTQ+ friendly investing

It’s Pride Month — and whether you’re a member of the LGBTQ+ community or a supportive ally, it’s a good time to consider what you can do to make the world a better place for LGBTQ+ people.

One option is by investing in companies and funds that are actively working towards social justice. Another option is to invest in major corporations that have done the work of diversifying their management and building a culture of equity and inclusion. If you’re interested in LGBTQ+ friendly investing, there are plenty of ways to get started — but you have to know where to begin.

“Investing is a lot like voting,” explains Kate Dorman, Financial Therapist at Sound Financial Therapy LLC. “Knowing what your money is doing is really important.”

With that in mind, here’s some things you should consider if you’re interested in investing your money in support of the LGBTQ+ community.

What is ESG investing?

There are many different types of socially conscious investing, whether you’re looking to invest in companies that share your values or whether you’re looking to invest exclusively in businesses that support a specific cause or community.

One of the most common sustainable investing categories is environmental, social and governance investing, also known as ESG investing. When you become an ESG investor, you focus your investments on companies that may be ranked positively in terms of environmental and social impact. These companies also may be rated on governance factors such diverse leadership and other progressive indicators.

Many brokerage companies and investment firms have already done the work of identifying ESG stocks, ETFs or index funds. However, people who are interested in ESG investing that also supports the LGBTQ+ community may need to do a little additional research.

“People need to start by figuring out what’s really important to them,” explains Diane Bourdo, a Certified Financial Planner™ professional and president of The Humphreys Group, an all-women owned and run wealth management firm based in San Francisco. “It’s not just what you want to screen out, but also what you want to screen in.”

How can you get started with socially conscious investing?

The best way to get started with socially conscious investing is by asking yourself what kinds of companies and businesses you’d like to support. “If I want to invest in a company,” says Bourdo, “I want to know that it’s thinking about its footprint and its place in the climate discussion.”

Like Bourdo, you may want to put part of your money towards organizations focused on climate. You may also want to invest in companies working towards racial justice. When you invest, you’re putting your money towards another organization’s potential growth — so make sure you choose organizations and corporations that are worth rooting for.

“Investing requires researching,” Dorman explains. “Even if you are using an online brokerage or roboadvisor, it’s important to do your own research and choose the investments that best support your values. No one’s going to care more about your money than you.”

How can you find investment funds that support the LGBTQ+ community?

If you’re looking for socially conscious investment opportunities with a focus on the LGBTQ+ community, you have options.

“Start with the LGBTQ 100,” says Dorman. “It’s an index that tracks 100 large-cap stocks from various sectors. These stocks have high ESG ratings, and the companies show specific support for the LGBTQ community through non-discrimination policies, equitable benefits and an inclusive culture.”

If you’re looking for investment opportunities beyond the LGBTQ 100, Bourdo suggests considering the Adasina Social Justice All Cap Global ETF. “It’s a new EFT that’s based in San Francisco, and it focuses on gender, racial, economic and climate justice.” She also suggests taking a look at the Pax Ellevate Global Women’s Leadership Fund. “You can go to Pax and review all of the stocks that are in the portfolio, which metrics are involved, you can see the big picture or get really specific.”

How else can you support the LGBTQ+ community financially?

Not everybody has extra money to invest right now — but that doesn’t mean you can’t support the LGBTQ+ community financially.

“Think about how and where you spend your money,” Dorman advises. “Which stores do you shop at?” If you’re already choosing retailers, restaurants and local businesses that support the LGBTQ+ community, you’re putting your dollars towards your values.

Another good way to support the LGBTQ+ community financially is through charitable donations. Many people do the bulk of their charitable giving at the end of the year, but one of the best ways to support a non-profit financially is by making a small monthly donation. Even as little as $5 every month does its work — and helps the organization continue to do theirs. 

No matter how you decide to invest, spend or donate, look for companies and causes that are doing the important work of supporting LGBTQ+ people. Whether you’re shopping at a local business, donating to an organization focused on social justice or investing in a stock on the LGBTQ 100 list, you’re doing your part to help the LGBTQ + community thrive. 

“No one company is doing everything perfectly,” says Dorman, “but there are a lot of companies doing a lot of good.”