As Christians, how can we make biblically-based investment decisions and steward our resources wisely? Faith-based investing is a growing way to invest your money where your values are. It’s known as Biblically Responsible Investing and has grown in popularity on the idea that how a company makes money and what they do with it is just as important as how much money it makes. These funds help like-minded investors avoid putting their money into businesses that don’t line up with their spiritual values and beliefs.
The following recording is from “Mornings with Kelli and Steve” on Moody Radio Indiana (97.9 FM). For more information on Moody Radio, go to moodyradio.org/indiana.
What is Biblically Responsible Investing?
Biblically Responsible Investing is the process of trying to align your investment portfolios with your faith by avoiding investments in companies that you believe are either operating a business in a way that is counter to your Christian beliefs or is using their money and influence to support agendas that are counter-Christian.
That sounds like a good idea, so is this something that all Christians should be doing?
This is where we need to be very careful and I realize that my answer may not be popular with all listeners. I believe that we have Christian liberty when it comes to issues of how we engage in the culture around us. This also applies to how we interact with the companies that we’re going to come into contact with in various ways as we live our lives in this fallen world. If I like the service or product being delivered to me by a certain business, but the owner of that business is engaged in a sinful act, their sin does not necessarily defile me.
Romans 14:22-23 – “The faith that you have, keep between yourself and God. Blessed is the one who has no reason to pass judgment on himself for what he approves. 23 But whoever has doubts is condemned if he eats, because the eating is not from faith. For whatever does not proceed from faith is sin.”
I believe that how we invest our money also has this degree of freedom and the real decision will come down to an issue of conscience on the level of the individual. Romans 14 speaks to this gray area where it comes down to an issue of conscience.
If my conscience is not violated when I invest in a company, then I am not sinning by doing so. However, if my conscience tells me that I shouldn’t be investing in a certain company, then I need to obey it because violating my conscience is rebellion against God and the investment that may be fine for you would be sinful for me.
As a Christian, I want to be careful to not elevate issues of the conscience up to a concrete standard and heap guilt on those who have the freedom to do as they please.
We also need to realize that some companies are seeing this as a marketing opportunity and trying to place guilt on potential investors.
The idea of not supporting these companies is a much bigger issue than just where we invest, isn’t it?
Yes it is. If it violates my conscience to invest in a certain company, then my responsibility doesn’t end with my investment account. I also need to avoid supporting that company by using its goods and services as well. If I do one, but not the other, I’m really just appeasing my conscience in one area while ignoring it in others.
What type of issues are typically being avoided in Christian-based investment funds?
These can vary from one provider to the next, but commonly accepted issues that are screened are Abortion, Pornography, Anti-Christian Lifestyles, Human Rights, Alcohol, Tobacco and Gambling.
If someone wants to take on a Christian investment approach, what are some things you think they need to know going into it?
They’re going to need help. A person can’t do this level of research on their own. A single mutual fund can hold hundreds of companies in them, so to figure out what is going on in all of those companies is just not possible. Fortunately, there are companies specializing in this type of research.
You also need to realize that your investments won’t perform like everyone else’s because you’re not going to be investing in the same companies. Take last year for example. A majority of the gains in the stock market was coming from just a handful of companies – Facebook, Apple, Amazon, Netflix and Google. There’s a good chance that you wouldn’t be investing in any of these companies, so you can’t expect to see your account performing like the rest of the stock market. It’s not that your performance is necessarily going to be less in the long run, it’s just going to be different at different times and you’ll need to be patient.
You mention companies that specialize in Christian investment management. Can we just pick one and go with them or are there things to consider?
As with anything, some companies are going to do a better job than others. You’ll want to make sure they’re providing a good service for a reasonable price. You want to invest in the best options available, so you need to do your research.
You don’t have to limit yourself to “Christian” investment firms. There are also good, secular investment options out there that probably won’t violate your convictions either. As with anything, the more choices we have, the better.
We also need to be careful of the companies that claim to be screening investments, but are either not doing it or not doing it well. In the worst case I’ve seen, I ran a filter on a supposedly screened fund’s investments and 60% of the holdings failed the test.
What if my only investments are in a company-sponsored 401k plan?
Unfortunately, most company plans are not going to offer you Christian worldview investment options. In that case, there are really only two choices – invest in the options you do have or avoid investing in the 401k plan. If it’s going to violate your conscience, you need to avoid the plan and then go start up your own investment account using investments that meet your criteria.
If you are a person in charge of your company plan, you may want to consider adding some biblically responsible investment options to your plan to give those who have this conviction an option. I believe that’s the proper way to design a corporate plan since it provides an option for everyone.
Brad Graber, CFP® has been working with clients on personal financial planning and investment issues since 1996. He invests his time mentoring and educating individuals on ways to be better stewards of the resources God has entrusted to them.