By Jonathan Shieber
Looking for some insight into the societal cost of buying a cup of coffee, a double cheeseburger, or a pack of cigarettes? Well, financial services startup Aspiration now has an app for that.
The fascinating fintech company that was co-founded by former Bill Clinton speechwriter Andrei Cherny just launched a new feature inside its mobile banking app that tracks a customer’s spending and offers them a report on the social impact of their consumption at the end of each month.
Several startups have tried to give consumers the tools to track which companies are aligned with their personal values, but none (to my knowledge) have integrated that into a monthly roundup that is directly tied to a bank account.
Aspiration tracks how companies perform on two main metrics. The first is how they treat their employees and the communities they operate in. The second is how companies treat the planet.
It’s an extension of the push some big time money managers are making to hold corporations accountable through shareholder advocacy around what’s called “stakeholder rights” — jargon for how a company treats the communities around it rather than the investors who back it. For example, does a company dump toxic waste into local streams and rivers or finance scholarships for underprivileged students and treat sick puppies?
“In this day and age, money talks,” Cherny said. “Imagine weaponizing that consumer sentiment and putting it in your pocket.”
For Cherny, the new tool is an extension of the work he’s been doing since his days working with former Vice President Al Gore, empowering consumers to understand how best to use the power of their purse.
Consumers in the U.S. spend $36 billion and “voting with a wallet” by choosing where to spend some of that money actually does have a huge influence on corporate behavior. Just look at how quickly Fox News turned on its mega-star Bill O’Reilly when corporate advertising dollars began to dry up.
Aspiration began developing its new tool, which tracks 75,000 data points on nearly 5,000 companies around issues like diversity, employee pay, energy efficiency and carbon footprint, almost a year ago.
Aspiration, which offers a pay-what-you-will fee structure for its customers, has a banking product and a mutual fund for investors. My peerless peer, Connie Loizos, described the company’s main products thusly back in 2015:
Aspiration now has its own low-risk mutual fund (managed by Emerald Asset Management on the East Coast) that its clients can begin funding with just $500 [ed. note: that number has now dropped to $100].
Users don’t have to pay any management fees, either – zero – though they can opt to pay up to 2 percent of their assets under management if they so choose.
Aspiration also offers completely free checking and free ATM transactions, though again, customers are invited to pay for the service – up to $6 per month — if they see fit.
It’s a pretty good deal. Not only do customers enjoy being freed from onerous transaction fees but Aspiration pays 1 percent interest on checking accounts, while most traditional banks are currently paying out between .20 percent and .80 percent interest.
As if that weren’t enough, Aspiration is also donating 10 percent of its revenue to Accion, the large nonprofit microloan provider, so that more low-income Americans can start businesses.
The Los Angeles-based company’s strategy is beginning to pay off. Aspiration has roughly $200 million in assets under management and the top performing sustainable investment fund of the past year, Cherny told me.