Here at the Gandhi Institute we recognize that the ‘how’ of our work is as important as the ‘what’. This allows us to be completely transparent about all aspects of the way we function, including, importantly, how we receive and transform financial resources. Our budget is easily accessible on our website and clearly accounts for each dollar in and out.
As we often hear, budgets are moral documents – done well, they illustrate the values of an organization. In this land of dramatic and increasing inequality (https://data.oecd.org/chart/6bij) it’s more vital than ever to know that our financial contributions are met with integrity in how they are used. Ethical nonprofit reporting has become synonymous with reducing overheads and eliminating waste. However, there is an overlooked aspect of nonprofit finance that I’d like to draw attention to as we each consider how to distribute our extra wealth at this time of giving.
Nonprofits, like businesses and individuals, sometimes invest capital in stocks and bonds as a way to increase return on each dollar. This is considered to be a smart way to make the most of contributions and is often supported by donors. This kind of investment is not in itself morally questionable. The integrity gap lies where there is a lack of transparency about what is supported by these investments, especially when it is a significant amount. Students have brought to light in recent years the importance of their universities divesting from fossil fuel funds – and this is a great start – but what about divesting from companies that use exploitative labor practices, or from weapons manufacturing and distribution, or from predatory lending institutions? The issue is particularly stark when we compare a nonprofit’s mission statement and its investment practices. If you are donating to a cause you care about, it’s worth checking with their CFO about whether their investments reflect their values. If they don’t know where there money goes they may unwittingly be taking with one hand what the other is giving through their mission.
The Gandhi Institute has taught me that living nonviolence should cover all aspects of our lives. If I devote energy to acting, speaking and even thinking nonviolently, I also want to use my energy in a smart way to bring about the world I want for my child and all our children. Tackling a lack of transparency in investment practices may be more influential than any of us could imagine, because the money we divest from areas that do not align with our values can be invested into work that really does. There are countless companies and services committed to a better world that desperately need investment. Imagine with me a nationwide shift towards investment in life, rather than in those things that do not support life. Though these times of retreating into ourselves and our homes can stifle our sense of effective contribution, we can gently shake the world by making sure our donations are invested as wisely as they are made.
Isobel Davies is a former board chair and current member of the development committee.