What is faith-based investing?
In the book of Mark, this question is posed: “What does it profit a man to gain the whole world, and forfeit his soul?” (8:36 nasb). Through the effort to find solutions to address the issues that go along with this question, faith-based investing was born. This movement seeks to align a person’s faith, moral beliefs, and ultimately God’s Word with the investment community.
There are now millions of religious investors attempting to align their morals and values with their investment portfolios. Religious concerns have long been a factor in the investment process because investors have wanted to avoid companies that contradict their belief system. This began with social screens such as alcohol and tobacco and has migrated to moral issues such as pornography and abortion.
There has also been a recent movement for investors to reassess their financial priorities in light of the corporate and mutual fund scandals that have surfaced over the last ten years. People are looking for more meaning in their lives and ultimately to make a more positive difference with their investments. This has led to the desire and ability to screen for more social and moral issues.
The rise in the number of faith-based mutual funds and money managers has opened the door to new avenues of investing. There also has been a surge in the level of sophistication in research available to advisors, money managers, and individual investors. As a result of this movement and awareness, millions now have the opportunity to put their money where their values are.
Simply put, faith-based investing is a form of investing that seeks to please and glorify God. 1 Corinthians 10:31 says, “So whether you eat or drink or whatever you do, do it all for the glory of God.” (1 Corinthians 10:31 – NIV).
A great summary quote comes from Chuck Colson:
“In every action we take, we are doing one of two things: we are either helping to create a hell on earth or helping to bring down a foretaste of heaven. We are either contributing to the broken condition of the world or participating with God in transforming the world to reflect his righteousness. We are either advancing the rule of Satan or establishing the reign of God.”
– from How Now Shall We Live
Romans 12:2 also gives us good guidance: “Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind.” (Romans 12:2 – NIV)
The Beliefs of a Faithful Manager
Faith-Based investors typically make investment decisions with four core beliefs:
1. God Created Everything.
This means you believe it all starts and ends with God just as stated in Genesis 1:1: ―In the beginning God created the heavens and the earth‖ (niv). If you believe God created everything—from the earth and the other planets to plant and animal life to humans to, more specifically, you—then this should be the foundation of your faith. Who is in control of everything?
2. God Owns Everything.
Psalm 24:1 tells us, ―The earth is the Lord’s, and everything in it, the world, and all who live in it‖ (niv). Your faith is your greatest asset in this world. As your faith continues to grow, your reliance on God should increase as well. Believing God owns everything will motivate you to a whole new level. This also leads to an important question: To whom does your money really belong?
3. We Are God’s Trustees.
First Timothy 6:17–18 exhorts, ―Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share‖ (niv). Being entrusted with wealth carries great responsibility. If you believe God owns everything, isn’t your money really His money? He has entrusted the things of this earth to you, and He allows you usage during your lifetime, but He is still in control and the ultimate Owner. How, then, should you manage His money?
4. Managing Money Involves an Emphasis on Honoring God
The core of this belief is to look at how God would want His money invested. This involves an understanding of what God would support or condone. You may believe that issues or causes are not just black or white, that there are gray areas. Do you think God sees in gray? There is right and there is wrong. Man uses gray to justify his lifestyle. Rather than be convicted of wrongdoing, man often changes what God intended to suit his needs rather than God’s desires. How should God’s money be invested?
What are your thoughts? Did I miss any main points?