Where should systems change organisations keep their money?

At Opus, we’re in the process of changing where we keep our company savings to better balance ethics, risk and the current financial landscape. Team member Sam Gregory spoke to colleague Bashkim Muca about the thinking behind the switch, and what learning we can offer to other organisations dedicated to social change.

Bashkim Muca

Opus is a worker-owned social enterprise based in Sheffield, England, that explores systems change projects that benefit people and planet. Like similar organisations, we’ve struggled with the dilemma of who we bank with: how can we avoid inadvertently investing in things that create the very problems we’re trying to tackle through our work?

New team member Bashkim Muca has been exploring whether we can bank in a way that’s more ethical, while also generating additional interest to contribute towards our work on systems change. He sat down with colleague Sam Gregory for a generative conversation that we hope will generate learning for other organisations grappling with the same problem.

How would you describe the problem you were trying to solve?

The problem I was trying to solve is that often with NGOs, charities, and companies that do really positive work, there's an interesting correlation with the banks they use and the interest rates those banks provide. Really harmful investments return a lot more money than really positive investments. Weapons, oil… these have huge returns. In standard financing, companies that do both – ethical and unethical investments – are actually considered to be more diversified and less risky to invest in.

A lot of charities use what are considered to be ‘ethical’ banks, but the interest rates are very low. The tough thing to balance is getting nice interest rates, so we get extra money to continue the positive systems change work, but not picking something that doesn't align with the ethos of Opus. Because then it’d be pointless. Who you interact with, who you procure from – that's a voice in itself.

Some organisations with big endowments end up investing in things that are causing the very problems the organisation exists to solve.

Is any bank really ethical? The line that everyone draws is so different. Even Triodos’s Global Equities Impact Fund used to invest in Nike, which has a poor record on worker exploitation, and currently invests in AstraZeneca (which has continued to do business in Russia). You can't avoid it in full unless we take all the cash out and put it under a mattress.

Tell us a bit about the process you went through.

I essentially did a detailed six-pager, summarising our savings account options. At the moment we use Co-op’s Instant Access, with 1.25% interest, which is really bad. But Co-op are actually quite ethical. There's different ways of measuring the ethics of a bank, and we've ended up using three different websites: the Good Shopping Guide, the Ethical Consumer Guide, and Bank Green. The latter aren’t incredibly well known, but they look at the sustainability of banks – what’s their stance on net-zero? What do they invest in?

There's a bank called Charity Bank which is actually the first EU B Corp bank, meaning they work in service of people, planet and profit, all together. Pretty good interest rates as well, but the issue is they’re quite small. There's no internet banking, and as an organisation that sort of stuff can be quite prohibiting, especially for capacity. 

I ended up looking at quite a lot of banks: Nationwide, Triodos, Charity Bank, Co-op. There was a lot of background research, calling all the banks – ‘Do you do this?’ It seems that a lot of the ‘ethical’ banks are having capacity issues when it comes to business savings.

That’s interesting. There’s a demand for it?

Yeah, exactly. I think Nationwide have been unable to open their business savings accounts to new customers since 2021. These were all things I was trying to make myself aware of before I proposed something. It was essentially a lot of analysis using metrics to gauge whether these banks are ethical or not, and then making certain value judgments as well as to what I feel Opus would be okay with.

What did you decide on in the end?

There's a difference in the risk appetite organisations like ours should take on compared to larger organisations. The problem is, if we put our savings in one bank, it’s quite risky. If that bank were to collapse, you’re FSCS guaranteed up to £85,000. If we put anything more than £85,000 in one bank, we'd only get £85,000 back. It’s about prepping for a worst case scenario.

The decision I ended up recommending in the proposal uses an organisation called Flagstone. It’s essentially a fin-tech organisation which is like a middleman between us and about 60 banks, and there's actually a few B Corp banks on there. I think about 12 of them are ‘ethical’ by the metrics we’re using. Flagstone acts as a platform through which you can spread your savings across multiple different banks, but with an interface that makes this easy to do without opening up dozens of different accounts manually.

The banks they have on their site offer better interest rates than you can actually find on the banks' own websites, as it's a good way for the banks to get liquid cash quite quick. They can offer higher interest rates than normal without the much longer process of having to open official accounts. Banks often need liquid cash to meet short-term financial obligations so it's beneficial for both parties. Flagstone provides all the 'know your customer' and 'due diligence' work prior, so the banks also save a lot of time, as do we.

You put your money into this wallet, but unfortunately the wallet Flagstone has is a holding account that goes through HSBC. Unfortunately for us, HSBC would never be on the list of banks we want to use. They’re Europe’s second biggest investor in fossil fuels, so definitely not on our tick list. So it actually needs to leave the holding account as quickly as possible so HSBC doesn't have access to that on their balance sheets, which might allow them to reinvest our money into things we wouldn't approve of. We need to prep what banks we want to use, where we're going to put our money, and then once we get the account open, instantly put it in.

Opus is a democratic worker-owned company, so what I’ve come up with so far is just a proposal. I’m going to put it to the rest of the team at an upcoming board meeting, but I’m hopeful that they’ll see that this is the right way to go – balancing our need to generate more income with our ethical aims as an organisation.

So with Flagstone we spread the savings across different ‘ethical’ banks?

Yes, exactly. We're able to keep that FSCS protection. If we split all our savings across six or seven different banks that we consider ‘ethical’, and all of them collapsed at the same time, we’d get our money back. It's being clever with the risk and the opportunity we've got, and knowing how much we can put in each account. How can we best balance the higher interest rates to help with systems change work while also being ethical? The only hiccup in that entire process is the HSBC holding account – damn.

What’s the best thing that could happen as a result of this work?

Internally, I'm hoping there's quite a large discussion that stems from this as a case study about ethics and due diligence in our entire procurement process: what we're okay with, essentially. It’s about leading by example. 

I’m hoping that externalising this, through this interview, shows that Opus as an organisation wants to be transparent. And also that in a world that’s incredibly unethical, you can actually make adjustments and still get some benefit. It's a bit of a balancing act. That's the overarching goal: to show people it's possible.