Here are four ways we can love without hypocrisy as we invest.
In Part 1, I showcased several avenues for practicing “relational investing” that put borrowers and their dreams, rather than the lender’s profits, at the center of the equation. In this post I want to describe how a primary focus on our neighbors (near and far) can be practiced through a variety of other investment strategies.
The first involves bonds. Because my work has had me traveling throughout the U.S. for the past twenty years, I feel personally connected to a number of cities — particularly their economically distressed but people-rich parts. I’ve hung out in innumerable neighborhoods that need investment, with neighbors who’ve been shut-out from wealth-building opportunities. My investment in the Domini Impact Bond Fund has allowed me to deploy capital in ways that benefit these kinds of people and places. The Fund helps to make capital available for home mortgages for first-time buyers. It also seeks investments in affordable housing, healthcare, public goods like transportation systems, green infrastructure, and nonprofit education facilities. These are all good things for the neighbors I’ve met along the road.
My work with community development ministries throughout the U.S. has shown me that real estate can be a powerful force for good. (It also is ripe for neighbor abuse, so investments in this sector require careful examination.) Small Change and Fundrise are two vehicles open to non-accredited investors. These platforms showcase opportunities for investing in a variety of real estate developments. Through Small Change I can actually hand-pick particular projects. With Fundrise, the choice is between different portfolios of pre-selected projects. I’m in a portfolio whose developments vary, some with greater social impact and some more conventional. Through these vehicles, I’ve been able to deploy capital in ways that benefit my neighbors in some of the cities where I have friends and business connections: creating affordable housing in L.A., stabilized rental units in Charlotte, and much-needed housing stock in Phoenix (by converting a hotel into studio apartments).
Other redemptive real estate investing opportunities are there for those willing to spend time looking for them. For example, accredited investors could check out Shift Capital in Philadelphia. This group has invested about $100 million in positive projects ranging from commercial to residential. They’ve rehabbed vacant properties, launched retail redevelopments, converted shuttered factories into usable space, and more. In Indianapolis, Commonwealth is directing investment into a major growth plan to help Co-Hatch expand into more cities. Co-Hatch operates community co-working spaces with a strong commitment to advancing community good through business incubation, corporate giving, and free memberships for nonprofits. In Chicago, Creation Investments focuses on advancing financial inclusion for un/underbanked entrepreneurs in emerging markets.
When it comes to investing in stocks and mutual funds, I want to support companies that offer helpful, healthy, needed products/services to customers and that treat their employees well, are a positive influence in the communities where they are located, and refrain from harming God’s good creation. Love of neighbor demands that I consider the interests of all these stakeholders who are affected by the businesses I’m supporting with my investments.
Back in the 1990s when I first started investing, my first buy was into a “socially responsible” mutual fund that screened out investments in the weapons, tobacco, and gaming industries. I liked that my money was not going to support things that contributed to human suffering. Love of neighbor, I reasoned, at least begins with “do no harm.” What I really wanted, though, was an opportunity to promote good things as well as avoid bad ones. When I learned several years ago about how Everence/Praxis and Eventide are investing in companies whose activities intentionally and robustly promote human flourishing, I could barely contain my excitement.
Through the Praxis Mutual Funds, I get to invest in companies involved in renewable energy projects and participate in social impact bonds. The latter concept, pioneered in the U.K., leverages private investment to provide results-based financing for social service programs. Through Eventide, I am playing a small part in supporting businesses that promote thriving by producing higher quality, healthier food, promoting energy efficiency, increasing the supply of clean water, and advancing precision cancer treatments.
Learning as much as I could about how these funds select businesses has helped me to identify individual companies for investment. To help me further with those decisions, I’ve also used a variety of ratings systems, academic research, and lists of holdings from various SRI funds to learn which corporations excel in areas like community impact, transparent governance, and employee care. These resources have included the Catholic Values Index, the KLD400, JUST Capital, the Haas Socially Responsible Investment Fund, U.S.SIF, and MSCI’s ESG (environmental, social, governance) ratings. I also look to see if companies have won awards for things like community involvement or charitable giving. This research process eventually led me to identify several public companies that were highly rated and also have been selected for inclusion in a variety of SRI funds. I’ve invested in a half dozen companies’ stock directly. Additionally, in summer 2019, I used the M1 platform to create my own “mutual fund” of 18 companies.
I can imagine some readers wondering if I’m indifferent to earning a profit on my investments. I’m not. I explore the likelihood of financial return. I want to appropriately risk my Master’s capital, not carelessly or cavalierly lose it. A firm’s profitability serves as one signal of its health: it can speak of whether the company is meeting a felt need and reflect something of the competency of its management. It is prudent to attend to those things. Avoiding loss and building wealth are good things: they allow us to meet our own needs and enable our capacity to share.
Additionally, as investors we may face certain constraints that affect our freedom. For example, one retirement account I hold is connected to my current employer. My mutual fund choices have been limited to pre-selected portfolios. I imagine other Christian investors face similar issues.
My experience has convinced me that “other-centered” investing is profitable. Much of my retirement is invested with Eventide and Praxis and I have been satisfied with their results.
All investments involve some risk—there’s no guarantees. In my experience, the investments I’ve made to try to promote human flourishing have largely met my financial expectations. More importantly, they’ve allowed me to play a small role in advancing foretastes of God’s kingdom, and that provides tremendous satisfaction.
I don’t know exactly how things will work out in my first investment with Urban Lazarus that I described in Part 1, or whether my recent equity crowdfund purchase of a start-up called IX Water (which has patented a process for cleaning up wastewater from oil and gas drilling) will make me a successful, miniature “venture capitalist.” I do know that I’ve come to love investing. It has profited me abundantly in non-financial ways. It has facilitated connections to real people in real places — social entrepreneurs and neighbors seeking opportunities for better, healthier lives. It has deepened my prayer life as I ask for guidance and pray for those borrowers, neighbors, and businesses with whom I’m now connected. Practicing the vocation of investing as a disciple of Jesus has meant learning how to deploy the capital he’s entrusted to me in ways that align with his passions and priorities. It has made my life, not just my bank account, richer.
This beautiful ministry has brought me joy.
This communication is provided for informational purposes only and was made possible with the financial support of Eventide Asset Management, LLC (“Eventide”), an investment adviser. Eventide Center for Faith and Investing is an educational initiative of Eventide. Information contained herein has been obtained from third-party sources believed to be reliable.
This communication is provided for informational purposes only and was made possible with the financial support of Eventide Asset Management, LLC (“Eventide”), an investment adviser. Eventide Center for Faith and Investing is an educational initiative of Eventide. The author of this communication is an investor in Eventide products and was provided cash compensation in the amount of $1,000 for the preparation of this piece. Neither the author nor Eventide are aware of any material conflicts of interest as a result of the author’s relationship with Eventide. Information contained herein has been obtained from third-party sources believed to be reliable.