Consider a food bank discovering that its operating reserves are in banks that finance industrial agriculture, the very system contributing to food insecurity and displacing small community farms. Or think about a housing nonprofit realizing that its primary bank engages in predatory lending practices that push families into homelessness.
These scenarios aren’t hypothetical. They reflect the complex daily challenges organizations face to align their financial practices with their social missions.
“The systemic shifts we need come from listening to communities—not just financial metrics.”
In an era of constrained funding and growing inequity, nonprofits increasingly recognize financial systems’ role in perpetuating or alleviating social injustices. Engaging more consciously with financial institutions offers nonprofits a unique opportunity to amplify their impact.
From shifting capital from harmful industries to mobilizing capital for underserved communities, nonprofits can leverage financial systems as tools for equity and justice. But how do organizations—often underresourced and overburdened—navigate these complex systems? And why should they? The answers lie in finance’s transformative potential to drive systemic change.
What the Research Says
Impact Experience—a nonprofit where I work based in Oakland, CA—recently looked into these questions. Our report, published in December 2024 and titled “Strategic Financial Engagement in Movement Building: A Case Study Analysis,” examines how movement building organizations in climate justice, racial equity, sustainable agriculture, and human rights—to name just a few areas—engage with financial systems to advance their goals.
The findings categorize strategies into three broad approaches: systemic influence, incremental relationship building, and targeted grassroots action. While these strategies vary in scope and scale, they share a common goal: leveraging finance as a tool for justice. The report also examines how to address common challenges, such as institutional resistance, resource constraints, and a lack of access to financial resources.
Before releasing the report, in October 2024, Impact Experience convened over 30 representatives from movement organizations, impact investing firms, and environmental justice groups to share best practices, promote collaboration, and cultivate a community focused on utilizing financial systems as tools for systemic change.
As one movement leader who works at the intersection of human rights and community finance said at that gathering: “The systemic shifts we need come from listening to communities—not just financial metrics—and centering their visions for change.”
How can nonprofits and movement groups convert community desires into meaningful financial action? Below, I outline three actionable steps.
Knowing Where You Stand
The first step in having your financial practices advance your mission is to know where you are currently situated. Only then can you begin to change and align financial practices with your mission. As one movement leader at the convening emphasized, “When we align our financial systems, we set an example and build trust with allies in the financial sector.”
Aligning financial practices with mission builds credibility and positions organizations as leaders in justice-oriented finance. Bringing finance into alignment involves three main actions.
First, do an audit of current financial relationships. This means evaluating where your organization banks or invests its funds. Don’t forget to consider your employee retirement plan! For example, it’s worth noting that 110 million Americans have an estimated $8.4 trillion in 401(k) accounts or 401(k)-like accounts (including an estimated $1.3 trillion in 403(b) accounts that nonprofits offer). That’s about $76,000 per account holder on average. Yet fewer than 3 percent of those accounts even have the option to invest in companies that support a climate-safe future.
Tools such as Bank.Green or the Global Alliance for Banking on Values can help mission-driven organizations identify values-aligned banks.
Second, educate the staff and board. This might include hosting workshops on justice-aligned investing and financial literacy. Outside groups, such as the one I lead, offer workshops in this area.
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Third, set clear policies so that everyone at your nonprofit knows what alignment means at your organization.
To achieve this, it is useful to create a cross-functional team charged with aligning financial practices with your mission. In a larger nonprofit, you might organize a team that includes finance leaders to evaluate whether banking partners and investment portfolios support the organization’s values, programmatic and strategy teams to define clear impact metrics to bridge financial and social returns, and investment committees to develop policies balancing growth with mission alignment.
Aligning financial practices with mission builds credibility and positions organizations as leaders in justice-oriented finance.
In a smaller nonprofit, many of these roles are combined among the same individuals. Regardless, this integrated approach ensures every financial decision—from banking relationships to fundraising—advances your organization’s impact goals.
Building Strategic Relationships
Once internal practices are aligned, nonprofits can expand their influence by cultivating partnerships with financial institutions and other allies. As one movement leader shared in our research, “Our approach is not just about immediate results but building trust and educating financial actors over time. It’s slow, but it works.”
What might building strategic relationships look like? Here are a few viable approaches that we have encountered:
- Collaborate with mission-aligned institutions: This might include partnerships with community development financial institutions (CDFIs), Minority Depository Institutions (MDIs), or local credit unions. For example, housing nonprofits can work with CDFIs specializing in affordable housing loans, while environmental organizations might consider collaborating with green investment funds. A powerful story of how this can occur is the alliance developed between Native Women Lead and Nusenda Credit Union in New Mexico to create a special loan fund to advance their common goal of facilitating business ownership by Indigenous women.
- Engage financial institutions directly: Begin discussions with your bank or, if you have one, your investment manager about aligning their practices with your mission. Tools like As You Sow’s Invest Your Values platform can assist you in evaluating the ESG (environmental, social, and governance) performance of your organization’s investments.
- Utilize coalitions: Explore partnerships with industry-specific financial networks focusing on initiatives aligned with your mission.
Direct Engagement with Financial Systems
Nonprofits can also use their influence as stakeholders within financial institutions to drive meaningful change. One grassroots leader noted during a breakout session at our gathering in October, “We’ve halted several infrastructure projects through grassroots campaigns and targeted pressure on financial institutions.” By aligning their finances to their advocacy, nonprofits can have an even broader impact.
The most obvious way to do this is to move nonprofit assets, such as those in reserves, from harmful industries (such as fossil fuels) into investment in community-led solutions. Even if your only asset is your bank account, there is still the possibility to move your bank account to an institution aligned with your values, such as banks that are oriented toward advancing climate justice.
Used strategically, the financial resources of nonprofits—limited though they may be—can be powerful levers to advance mission goals.
Nonprofits with a racial justice mission would do well to consider moving funds to banking institutions that are majority owned-by people of color, known as MDIs—including those on this list of Black-owned banks and credit unions.
Larger nonprofits that have stock holdings might also want to consider engaging in shareholder advocacy, a strategy long used by activist groups like the Interfaith Center on Corporate Responsibility to leverage organizational investments to push for corporate accountability on racial equity and environmental sustainability issues.
Finance for Justice
Engaging finance for justice may seem daunting. And often the way that finances are talked about serves more to obfuscate than elucidate. But used strategically, the financial resources of nonprofits—limited though they may be—can be powerful levers to advance mission goals.
The bottom line: Finance is about more than numbers. It is about power, priorities, and possibilities. The simple steps outlined here can help empower nonprofits and other movement groups to leverage finance as a resource and a tool for justice.
By aligning internal practices, building strategic relationships, and directly engaging with financial systems, nonprofits, and their allies can challenge entrenched inequities while advancing equity-driven solutions.
