Creating Impact with Every Dollar — Considerations for Aligning All Assets with Your Values
Key Takeaways
- Every dollar deposited or invested at a financial institution is driving some kind of real-world outcome — for better or worse.
- As a values-conscious investor, you probably focus on where you invest, but areas such as where your cash is sitting, where your DAF assets are invested before being granted and your broader portfolio exposure are often overlooked.
- With $19 trillion¹ deposited in U.S. commercial banks and $326 billion² held in donor advised funds, the opportunity to create impact with those assets is significant.
- Generating impact with these assets doesn’t have to be complicated. Choosing values-aligned banks and financial service providers, reviewing how your DAF assets are invested before they are granted and pressure-testing your broader portfolio against your values all makes a meaningful difference.
- ImpactAssets builds this philosophy into every investment product, including cash management.
Every dollar is invested in something, by someone, whether you’ve thought about it or not. Think about where your money is right now, and not just what’s in your impact portfolio:
- The cash in your bank account
- The assets your financial advisor manages on your behalf
- Even the contributions sitting in your donor advised fund
These funds are all driving real world outcomes, for better or for worse. That's why it's critical to examine all of your assets and where they are invested.
Banks: Often Overlooked Cash and What it Can Do
Start by examining the most overlooked place: your bank account.
You may think of your bank account as a place where your money “sits,” but it isn’t. The moment you make a deposit, your financial institution puts that money to work: making loans, financing projects and fueling economic activity. With roughly $19 trillion¹ in cash deposits at U.S. commercial banks, this enormous pool of capital powerfully shapes lives and communities every day.
The bank you choose isn’t just a place to store money. It’s a decision about what gets financed, who receives a loan and which communities get access to capital. Your financial institution can fill critical market gaps by financing affordable homes, education, healthcare and small businesses...or it can direct your capital elsewhere entirely, toward sectors that may not align with your values (fossil fuel expansion and other extractive industries are common examples, but there are many other investments that can have unintended consequences for local communities and community development).
Donor Advised Funds: Don’t Forget Ungranted Funds
Your DAF account is another place worth examining, one that’s easy to overlook for a very different reason. Unlike your bank account, your DAF may feel like it’s already doing good. You’ve made a charitable contribution, and the money is set aside for philanthropy.
But there’s a question many DAF holders never ask: What is your DAF sponsor doing with that money before you grant it out?
The answer matters more than most people realize. Total assets held in U.S.-based donor advised funds reached $326 billion in fiscal year 2024², nearly double what they were just four years earlier. That’s an enormous and growing pool of capital, and most of it is allocated to whatever default strategies the sponsors have chosen.
If you haven’t examined your DAF’s investment strategy and made a proactive choice, your contributions are likely sitting in a conventional money market fund, a pooled fixed-income vehicle or a broad index portfolio. These vehicles may focus on growth or principal protection, but not positive impact. They may even hold significant positions in sectors that run counter to your values.
Your Other Advisors: The Rest of the Picture
Of course, the same principle extends to your broader portfolios. The assets your financial advisor or RIA manages on your behalf: your taxable investments, equity holdings and fixed income are also creating impact in the world.
For most of us, this is less surprising than what was previously highlighted about bank accounts and ungranted DAF assets, but it’s highly consequential. Traditional investment portfolios, even well-intentioned ones, can carry meaningful exposure to sectors or companies that conflict with your values, simply because conventional indices and benchmarks are built for financial returns, not values alignment. There is nothing wrong with wanting a portfolio that delivers financial return; the point is to make a conscious decision that feels right for your overall goals.
DID YOU KNOW?
Traditional indices, such as the S&P500, are weighted by market capitalization. This means that portfolios focused on these indices invest more heavily in the largest companies within the index, regardless of sector. Unless you specifically choose otherwise, you may be invested in a broad spectrum of sectors, including oil or manufacturing, as broad indices do not screen for ESG criteria.
How ImpactAssets Drives Positive Outcomes with Every Dollar
At ImpactAssets, we start from a simple premise: every dollar of your assets has social and/or environmental impact, in addition to financial considerations.
Over the past 15 years, this understanding has shaped all areas of our work supporting more than 2,000 clients. It's why we've designed all of our investment strategies and products to work toward positive outcomes. For example, our default investment strategy for new DAF contributions has a significant cash allocation that is deposited at a mission-driven commercial bank focused on economic empowerment for its customers and communities.
ImpactAssets Capital Partners: An Extension of Your Advisory Team
For family offices, corporations and foundations who want to align their broader investment portfolios with their values, ImpactAssets Capital Partners (IA Capital), our SEC-registered investment advisor, serves as an extension of your advisory team, bringing values-alignment to the full scope of your capital.
IA Capital specializes in private market impact investing, offering bespoke strategies for clients who want their full financial picture to reflect their values, not just their philanthropic giving. Whether it's working with your internal team, outside advisors or both, we also provide rigorous, institutional-quality due diligence that aligns your impact and investment priorities.
Every Dollar Is a Decision
As an impact-conscious investor, you probably spend considerable time and energy selecting the right funds, vetting the right opportunities and building portfolios that align with your values.
But the assets outside of your core impact investments matter, too. Being intentional about the institutions you entrust with your funds can make all the difference.
¹ https://fred.stlouisfed.org/series/DPSACBW027SBOG
² https://www.dafresearchcollaborative.org/research/annual-daf-report
LEGAL AND PROGRAM DISCLAIMER: This is not a solicitation to buy or sell securities, nor a private placement offering pursuant to any private placement memorandum that must be issued to qualified investors. It is an informational description of charitably oriented, social purpose investment options that have been approved by ImpactAssets only for use in its donor advised fund asset base. It is only for use by its donors. This does not constitute tax advice. Please note there are a number of factors to consider when assessing the tax implication of gifts to charity. Individuals should consult with a tax specialist before making any charitable donations.
ImpactAssets Capital Partners PB LLC (“IA Capital”) is an investment adviser registered with the SEC. The content of this website is not a solicitation or offer to sell investment advisory services, nor is it a solicitation or offer to sell securities. All content of this website is for informational purposes only and should not be relied upon as investment advice. Information is subject to change at any time, and IA Capital is under no obligation to provide updates or amendments. Investment in securities involves the risk of loss. Past performance is no guarantee of future returns.
