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The Moral Imperative of Doing Good with Your Money

The following is adapted from The Good Your Money Can Do.

In his book The Life, You Can Save, moral philosopher Peter Singer proposes a hypothetical situation that challenges our perspective of poverty. The situation goes something like this: imagine you are witnessing a child drowning in a lake.

Would anything stop you from jumping in to save them? What if you hadn’t been swimming for a few years? What if you didn’t know who the child was? What if you were wearing an expensive pair of shoes?

In Singer’s opinion, the answer should always be an emphatic no-nothing that would distract you from your instincts to help that child. However, in our daily lives, we often make choices that run counter to our altruistic instincts. We prioritize the proverbial expensive pair of shoes over the potential impact we could have by acting.

None of us means to do this, of course. In part, because the real world is so much more abstract than Singer’s hypothetical. Still, that parallel can help us recognize that we all have an immense potential for impact. There are many places where people’s lives are hamstrung by issues that seem trivial in the context of our day-to-day lives and choices.

What might to us be the cost of a new pair of shoes, might to someone else be a make-or-break purchase that will immediately improve their livelihood. The good news is that the small choices we make with our money can help others a great deal.

In this article, I am going to discuss what I consider the moral imperative for doing good. As you read, here is the challenge I put to you: Do you want to live with your money and resources only working for those in your immediate circles? Or do you want to create meaningful opportunities for all stakeholders, and know not just what you are investing in but also what your impact is with those investments?

Society Depends on Cooperation

Last year, I attended a talk where the philosopher of science Michael Vlerick discussed his book The Second Estrangement. Vlericks’s primary argument is that while we live in a global society, our psychology and institutions lag behind.

He claims that humans are intended to live in groups of one hundred or fewer and that living in larger groups leads to tribalism. People voluntarily separate into smaller groups based on self-selected traits (i.e., cultural, religious, racial, etc.).

Tribalism leads to conflicts in which certain individuals see themselves as distinct from others instead of all being “humans on this one fascinating planet.” This is problematic, Vlerick argues because what separates us from the animals-what makes us special as humans are that we cooperate with one another.

Achieving progress in a modern sense means linking the interests of the individual to those of society. Sure, businesses are bound to compete, but they can also cooperate in a way that serves not just shareholders but stakeholders.

This concept became even more important during the COVID-19 pandemic, where the true effects of globalization where we all witnessed the true effects of globalization like never before. In one way or another, everyone is affected by global events.

Stepping back to think about the origins of the challenges we face allows us to come to better solutions. If Michael Vlerick’s theories hold true, humans struggle so much along political and cultural lines because they were built for a different type of society.

His suggestions are threefold: focus on education, promote positive contact between different groups, and insist on women’s rights. While there are many ways to go about ameliorating the many issues modern society faces, conscious investing may be the most effective way to cover all three of those approaches at once.

Money as a Medium for Meaning

In spite of talk of tribalism and war, human nature is inherently good. At the heart of it all, we are all looking for happiness, ease, and connection-whether in our personal or our professional lives. Even in the face of tremendous tragedy and hardship, there is always the opportunity to foster global solidarity. There is hope. There is the potential to emerge from a crisis into a better world. Conscious investing-active engagement in how you spend your time and money can play a significant role in that.

In his book Payoff: The Hidden Logic That Shapes Our Motivations, renowned economist and behavioral economics and psychology professor Dan Ariely describes the results of a study in which he measured which factors drive employees to work hard.

According to his findings, employees were not driven by bonuses, healthcare, or even foosball tables. Instead, they were driven by trust, purpose, meaning, mission, and emotional connection. Humans are ultimately looking for emotional connection. Regardless of what they are doing, they value the mission and seek inspiration from the work.

Conversely, an abundance of scientific and psychological research says that the greater an individual’s wealth, the less likely they are to be happy. Specifically, as one study found, the more money a person has, the less generous that person is likely to be.

As we discussed earlier, behaviors such as giving and assistance are directly correlated to happiness. The greedier and stingier someone becomes, the less likely that person is to exhibit and perform the very traits and behaviors that lead to happiness.

The harsh reality is that money does not directly correlate to happiness. Perhaps this is why generations before us chose not to speak about money. Without a connection to meaning and purpose, it is not a happy subject and therefore not one perceived to be for children, women, or friends to engage in.

For this exact reason, it is important for conscious investing to help turn this tide. All research points to the improvements that can be made with a positive mindset, especially regarding business outcomes.

Conscious Investing Leads to Emotional Connection

Capitalism conditions us to believe that wealth is only related to financial prosperity. With a conscious investing mindset, money becomes about more than a financial return. It becomes an opportunity to connect with your money and what you do with it-to cooperate with your fellow humans and regain a sense of humanity. Conscious investing becomes the vehicle that allows you to travel toward emotional connection.

When you understand who and what is involved in your decisions, money, time, and energy, it becomes that much easier to make an impact with your investing. Doing good with your money isn’t just the province of wealthy philanthropists. It’s a fundamental human need and a moral imperative.

For more advice on doing good with your money, you can find The Good Your Money Can Do on Amazon.

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