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Whether you're a member or ally of the LGBTQ+ community, you can tailor your investments toward companies that support the LGBTQ+ community by researching companies and specific investments, and seeking a financial advisor who supports the community.
Some companies make it easy to know where they stand, while others make it harder to discern whether they support the community. If it's important to you to invest in committed LGBTQ+ allies, it's also important to know whether a company is supportive in its actions and words or simply looking to gain profit or hop on the bandwagon without a genuine commitment, a practice known as "rainbow washing" or "pinkwashing."
Online resources now make it easier than ever to research corporate practices and spending, so you can find out if companies put their money where their mouth is-so you can too.
Find Companies Friendly to the LGBTQ+ Community
In the past, many businesses and financial institutions excluded the LGBTQ+ community, but the tide is slowly turning. Here are a few tools for finding truly affirming companies:
- Refer to the Human Rights Campaign's latest Corporate Equality Index. Each year, LGBTQ+ nonprofit HRC evaluates and ranks thousands of businesses based on factors such as nondiscrimination policies, equitable benefits for LGBTQ+ workers and their families, supporting an inclusive culture and practicing corporate social responsibility. Some of the top-ranked companies for the past 20 years include Apple Inc., J.P. Morgan Chase & Co., American Airlines, Nike Inc. and Xerox Corp.
- Check out OpenSecrets. This nonprofit database pulls in stats from the Federal Election Commission to show how individuals and companies have donated to various politicians, lobbies and political action committees. In one section of the site, you can search specifically for contributions by organizations.
- Look up companies on Progressive Shopper. This database allows you to search by company to see how they donate and if they engage in "pinkwashing."
- Note any certifications or memberships. The National LGBT Chamber of Commerce (NGLCC), has hundreds of corporate partners and has certified over 1,800 businesses as Certified LGBT Business Enterprises. You can make sure you support those businesses, or look for businesses that are affiliated with LGBTQ+ chambers in your local area.
- Read the company's marketing materials. It's become popular for companies to launch special pride-themed lines and products, but if you look closely, some companies may be doing so more for show or profit than to substantively support the community. Before you buy, take a close look at how a product or service is advertised to see if it is actually part of an effort to help the community. Is a percent of sales going to an LGBTQ+ charity? Is it in partnership with an LGBTQ+-owned business? If not, your support might only be benefiting that business, not the community.
Look for Special Investment Funds
If you want to go beyond shopping with companies friendly to the LGBTQ+ community and also invest in them, one option is to buy stock in individual companies. There are also an increasing number of mutual funds and exchange-traded funds (ETFs) that bundle investments in diversity-minded companies. Side benefit: It can also help diversify your portfolio.
Today there are funds comprised of companies that practice socially responsible investing (SRI) or support environmental, social and corporate governance (ESG) causes. These socially conscious products have boomed in popularity and are now widely available. Many brokerages, including Vanguard, Fidelity and Schwab among others, offer SRI or ESG funds, and you can read their criteria on why those companies were chosen. Robo-advisor Wealthfront also recently launched a socially responsible portfolio option.
Bear in mind that definitions of SRI or ESG can vary, and some may focus more on the sustainable environment efforts or fair labor practices. For the social component, there is usually an emphasis on diversity. It may be broad, such as supporting inclusion and empowerment of women and minorities, so the LGBTQ+ community isn't always called out specifically. But you can invest in these funds knowing that the companies were hand-picked for valuing diversity.
When you invest in companies focused on LGBTQ+ issues or social responsibility, it's not guaranteed your returns will equal those of more traditional investing. However, fund managers aim to deliver similar results, and research from the past few years shows that SRI and ESG investing can pay off just as much, if not more.
Work With a Financial Advisor Who Supports the LGBTQ+ Community
Regardless of what type of expertise you're looking for, there's a financial advisor out there who has it. To ensure your savings and investments are handled well, and that you're treated with dignity, consider seeking out financial advisors, and potentially investment advisors or wealth managers, who are either in the LGBTQ+ community or support it.
If you belong to the LGBTQ+ community yourself, it's especially helpful to find an affirming advisor who's knowledgeable on the unique issues you face; for example, the specific financial challenges same-sex couples might face with getting married or buying a home.
A savvy advisor can ensure your bases are covered for estate planning, help you plan and save for family-building, and in some cases advise on LGBTQ+-friendly investments. If you can't easily find someone in your area, check databases of financial planners who are either in the community or affirming, such as the one from the Gay and Lesbian Directory, or by searching on The National Association of Personal Financial Advisors and filtering by LGBT.
Know What Resources Are Available
If you're in the LGBTQ+ community, make sure you're aware of financial resources available to help, from affirming banks to family-building grants to free online financial training. It's also wise to sign up for free Experian credit monitoring so you can find ways to improve your credit and catch any issues, such as errors or identity theft.