April was national Financial Literacy Month so perhaps now you’re motivated to pay closer attention to your personal investing strategy. But what about your political investing strategy?
Do you take a strategic approach when it comes to your political and charitable contributions? Do you apply the same kinds of principles as you do with your personal investing?
If you’re like most people, you answered “no.” Even though individuals give billions of dollars in political and charitable contributions each year, they rarely pay enough attention to how much they are giving and whether it’s being used effectively. Nor do they apply the kinds of sound investing principles—like diversification, due diligence, and return on investment—that they use with their personal financial investments.
The New Progressive Coalition LLC (NPC) is working to change that by helping individuals target their charitable and political money and time more effectively. You can read their recent feature in the Innovation section of Business Week .
Here Catalina Ruiz-Healy , NPC’s Investor Services Director, answers some frequently asked questions about how NPC helps individuals invest more strategically in political change.
Q: What’s the difference between the way individuals approach their personal investing versus how they approach their political investing?
A: It’s amazing how differently people treat their personal financial investments versus their charitable and political investments. Most people take a long-term view towards their financial planning and recognize that it’s going to take many years to build a nest egg they can rely on in retirement. They also understand that successful investing is about doing the right research, diversifying your portfolio, assessing return on investment, and finding the right advisors to help you make decisions.
But most people don’t take the same approach when it comes to investing in politics. They often don’t know how much money they are giving to organizations and candidates, let alone whether it’s being used effectively. When you ask people about their political giving, they mention attending fundraisers, responding to email or snail mail appeals, or giving to a cause because a friend asked them—but they rarely talk about targeting their money in a thoughtful or strategic way.
Even a very sophisticated financial investor made this confession: “Come to think of it, I don’t take a strategic approach to my political investing. When my blood pressure reaches a certain level I just throw $250 at MoveOn.org and treat them like my local aspirin.” As it happens, this individual is a financial advisor to very high net worth individuals and yet even he was surprised to realize that he didn’t employ any sort of strategy when it came to political investing.
Q: Why don’t people take a more strategic approach to political investing?
A: Until now there haven’t been comprehensive resources and tools that educate individuals about political investing and how to do it strategically. It’s also been difficult to measure the impact of your contribution—or the return on investment—when it comes to giving to organizations.
If I give money to a candidate, I can measure my return based on whether that candidate won or lost the election. But it’s not as easy to measure the return on investment when it comes to giving to, say, a progressive think tank, media entity, or advocacy group. That’s why NPC has developed products and services to address these issues and help individuals approach political investing more strategically.
Q: How does NPC help individuals be more strategic and effective with their political and charitable giving?
A: NPC is taking a similar approach to that of a financial services firm—helping our members target their time and money more effectively. Our goal is to help busy people become politically engaged in ways that are effective and fit their lifestyle and we provide different tools and services to make that easier.
For example, we provide an online marketplace and tools that enable our members to make and manage their political and charitable contributions. We also offer individual consultations to help them find organizations they are excited about supporting. For people who are overloaded with information and don’t know where to start we just released the NPC Investor’s Guide to Not Reinventing the Wheel, a short primer that outlines a series of simple steps to smarter political investing. And that’s just the beginning—we are developing tools to help measure political return on investment, political mutual funds, and more.
Like any sound financial investing strategy we also encourage diversification. Just as it doesn’t make sense to invest in only one stock, it makes little sense to invest in only one candidate or organization. It’s important to invest in a variety of different organizations because to succeed politically we need a strong progressive media, a leadership pipeline, idea generation, organizing, technology, and many other elements working together.
Q: What do you mean by building the next generation of political investors? Is NPC membership only for people who have a lot of money?
A: What we mean by “investors” are those who want to contribute—either expertise or money—to progressive organizations, and who are looking for a more entrepreneurial way to be engaged in politics. Our investor members include people who give a couple of hundred or a couple of thousand dollars per year, as well as those who give a lot more, but what really matters is their desire to be more strategic about their political and charitable investments.
We also value our members for more than money—we know they can also contribute time and expertise that will help progressive organizations succeed. Some of our investor members serve on boards, host events, or provide strategic advice and connections. They appreciate being able to invest in progressive politics in different ways that are meaningful and in line with their interests. I would encourage anyone who is interested in learning more to visit NPC’s Web sire and contact us to get involved.
More about Catalina Ruiz-Healy
Catalina Ruiz-Healy’s focus is to develop the tools and strategies NPC members need to become savvy and committed political investors, as well as to advise them on their political investments. She has over 10 years of experience advising clients on their philanthropic investment strategies, most recently as a philanthropic advisor at Tides Foundation. Prior to joining Tides, Catalina worked all over the United States providing management consulting services to private and corporate foundations, and to nonprofits as a consultant with The TCC Group and as an independent consultant. She received a BA from Pomona College, and a Masters degree from Columbia University’s School of International and Public Affairs. Catalina is a 2005 graduate of Emerge, an advisory member to TransFair USA, a board member of OaklandVote.