The recent murder of George Floyd at the hands of law enforcement has reinvigorated the nation’s unfinished racial justice agenda. While people across the country have joined in to protest police brutality and the racist policies disproportionately affecting Black people, indigenous people, and people of color, corporations continue to profit from these systems of oppression and exploitation.
As members of the same society that allows these systems to exist, we have a responsibility to take action. We have power when we come together to form a united front in the fight for justice and equality for all.
When we invest for the future, we are making the decision to support companies with our capital. But common investments like mutual funds can make it hard to know exactly which companies we are supporting. Prison Free Funds has empowered us with having access to this knowledge. Now it is up to us to make the choice to invest using our values.
It’s your money, and your financial advisor works for you. You just need to discuss what you have learned about your holdings and how you would like them changed in order to align with your values. An investment professional will advise you of potential risk and you make your own decisions.
You can trade your own portfolio or tell your manager to do it. They may push back and tell you that you’ll make less money. You can reply, “Maybe, maybe not, but it’s my money, I want less risk, and incarceration-based companies are a risky business.” It’s a financial advisor's job to manage your money, so you should drive home this point in no uncertain terms.
Ask for help finding the best choices. The advisor may advise against investing in a specific fund because it has a short or rocky history, so you may need to be patient as they find a better alternative. The goal is to remove the risk, not necessarily a specific fund. It is important to focus on risk (especially future risk) as well as returns. If your broker is tied to a big-name brand, they may only be able to offer products that the particular company has approved. If you want funds that are aligned with your values, and your broker is not able to provide them, it might be time to consider finding a new advisor.
If your employer-offered 401(k) already has investing options that are aligned with your values, that's great! However, many plans only offer diversified funds that own the whole market, including companies involved in the prison industrial complex. It is possible to change what the plan offers, but it will take more effort than if you have an IRA or a personal portfolio that you solely control and has more options. You will need to engage the plan administrator to help find the right blend of options to satisfy the many employees that all invest in the same group of mutual funds. This may take time and possibly some coordination with your co-plan participants.
To effectively advocate for new offerings through your employer-sponsored plan, first build a coalition of peers and interested co-workers inside your company. Your voice will be much stronger as a group. If you’re writing to someone in power, advocating on behalf of 20 or even 10 people carries a lot more weight than just one. One way to spur interest would be sharing the results from your Prison Free Funds search among fellow employees. All plan participants are offered the same group of mutual funds as you are, so they are probably asking the same questions right now.
Some companies have “corporate responsibility teams.” If there isn’t one already, it may be time to create one for prison free investing. Communicate with your co-workers through a company intranet, employee portal, a company newsletter, corporate chats, or social media.
The 401(k)/403(b) plan administrator, manager, or coordinator should be known if you are a plan participant, and that’s where to start. There could also be a chief corporate responsibility officer or employee engagement manager, and those could be good resources. An effective method is to go to the LinkedIn pages of those people and find who might have some sympathy for the cause. Do any of them volunteer or have connections with organizations working to reform the prison industrial complex? Look for indicators that they’re friendly to corporate responsibility and start contacting them in order of their friendliness. In a publicly listed company with more structure, a coalition is vital to signal to managers that it’s an important issue for many employees. If it’s a smaller company, the CFO or CEO could be approached directly. In a mid-size or family company, a family member could be more influential.
The usual starting point in these conversations is: “We want to reduce the future risk of our 401(k) fund choices. We also want to invest in a more just and equitable future. How can we enhance our 401(k) choices to do so?” Getting new fund choices added to the list of the existing plan options is a formal process, and could take up to a year to be added. Larger companies often have some form of investment committee, which engages an investment advisor. There may be some funds in your plan that you see contain only one company flagged by Prison Free Funds for involvement in the prison industrial complex. You could ask the plan administrator to call the fund manager and say, “Is there a substitute for this one company?”
If the investment advisor and plan administrator refuse to help in swapping out some prison industrial complex-heavy funds for some prison industrial complex-free funds, you may need to get fellow employees to sign a petition requesting the change and send it to the investment committee. If you are told, “But you’ll make less money if you’re not invested in these companies,” you can say, “Actually, the prison and border industries are a risky investment. We want to diversify and be part of building a less violent future.”
If you want to learn more about the prison industrial complex and find ways to make a difference, check our these organizations and resources:
A special thank you to the organizations that provided us with data and feedback as we worked on Prison Free Funds. This site would not have been possible without their help.