Article originally posted here by GenerosityNY

by GenerosityNY

Hear Henry Kaestner’s story, of how he started Impact Investing over a decade ago.

Article originally posted here by Medium

by Jimmy Song

One of my favorite stories in the Bible is in Acts 1. Jesus has been with the apostles for over 3 years. He’s also spent about 40 days with them after rising from the dead. He’s about to go up to heaven and leave them. They have one question they ask and the question is:

So when they had come together, they asked him, “Lord, will you at this time restore the kingdom to Israel?” — Acts 1:6

After three years of miracles, direct teaching and witnessing Jesus rise from the dead, they still didn’t quite get what the kingdom of God was all about. For them, establishment of Israel was the Old Testament prophesy that He had not yet fulfilled. The Messiah was supposed to restore Israel and while they’d all seen the miracles, they hadn’t gotten the message that Jesus fulfilled that prophesy in a way that they didn’t expect. The kingdom He restored was one that was much broader than a political kingdom. His kingdom would be a restoration of humanity as a whole.

Blind Spots in our Education

You can forgive them for their ignorance in this matter. Jewish teaching at the time, and to some degree today, believed that a Messiah would restore the nation of Israel and that’s what these Jewish followers of Jesus grew up learning. They didn’t have the benefit of the perspective we have today of seeing Christ change civilization forever.

I bring this story up not to make fun of the apostles, but as a reminder that everyone has blind spots. Like those apostles, there are certain ways of thinking about things that are entrenched in us. Some of those perspectives are just wrong, and to correct them is often a Herculean effort.

One of those things is money and the economy. Our tendency is to think that we understand them based on what we’ve been told. Money is what the government decides. The economy must be managed centrally. The people in charge know what’s likely to happen and we must do what they say to avoid disaster.

We think we understand because we work with money all the time. We use it to buy stuff, we earn it by working, we invest it and have lots of interactions with money, which makes us think that we understand it. Much like the apostles and Jesus, we’ve spent a lot of time with money, but that does not necessarily mean we really understand it.

Conviction Conflation

What’s particularly dangerous is that many assumptions about money and economics sneak into our worldview and get conflated with our Christian convictions. We think that our convictions on how the economy works has the same moral force as the law written on our hearts or the convictions we have as Christians.

This is particularly dangerous with money because money is where the rubber meets the road as far as actual expression of Christian convictions is concerned. We don’t just love others. Loving others often requires sacrifice, or allocation of resources we are put in charge of.

How we view money has infected how we look at the gospel.

Worse, many people use the gospel as a way to convince others of non-gospel convictions. Just about everything has used Christianity as a justification for behavior or beliefs that simply aren’t the gospel. Chattel slavery, socialism and wars of conquest were all argued as Christian when they clearly were not.

Money and Economics

That’s unfortunately the position we’re finding ourselves in the money and economics realm. There are those that tell us what Christians should believe, not from critical examination of the Bible, but from convictions from an ideology outside the gospel.

This is false teaching and we must be very careful about such claims.

In particular, there’s a tendency to view current norms as somehow right or correct. There have been many norms throughout history that we would find horrifying today and vice versa. One of those things is our current monetary system.

Our church forefathers would be horrified by the current system and their analysis morally of monetary systems, particularly ones controlled by a central authority, is well documented.

The current monetary system is a cesspool of theft, corruption and cronyism. I’m not exaggerating. I’ve made the argument in my book about how the system of central bank backed fiat money is theft at its core. The ability of Central Banks, and really all the member banks of a central bank to issue credit without anything backing it, is ultimately theft from all other holders of the currency.

But if you doubt me, start with this. What is money supposed to be? What is it supposed to represent? What is inflation? Exploring any of these topics in depth will naturally lead to questioning the morality of the current system. Much of the wealth of the United States, for example, is based on a dollar dominance that’s neither earned nor fair.

Getting Out of the Cesspool

So what are Christians to do? How should we think about not just the money, but the very monetary system that we were born into?

If the current system is morally wrong, it is our moral duty to work to change it. William Wilberforce did this with chattel slavery by fighting against it until England abolished slavery. Perhaps we’re not quite ready to go on a moral crusade just yet, but there is a way to start exploring alternatives.

Much like the apostles who thought the Messiah would politically restore Israel, we find ourselves in the position of finding that our money isn’t anything like what we thought it was. Our assumptions around the current monetary system are being proven wrong, so we should be looking at alternate explanations. There’s a digital alternative in Bitcoin. As Christians and as investors, exploring this alternative is a good thing.

Article originally posted here by Denver Institute for Faith & Work

by Ryan Tafilowski

My favorite gift last Christmas was a pack of thermal socks. It’s funny how things change. I can still remember how I felt as a child upon opening a “present” from my grandmother comprised of a sweater and socks. Ten-year-old boys are not known for their self-awareness, so it’s a good thing my sweet old grandmother wasn’t there when I opened it. Looking back, I was angry, sure, but there was a lot more going on: a cocktail of resentment, embarrassment, and disappointment. But the dominant emotion, I now realize, was confusion. Why would anyone give socks and sweaters as a gift?

You may remember an iconic scene from A Christmas Story, where a humiliated Ralphie reluctantly models a pink bunny suit gifted to him by Aunt Clara. He’s clearly traumatized by the event; he’s ridiculed by his brother and all but disowned by his father. “You’ll only wear it when Aunt Clara visits,” his mother assures him. 

No Strings Attached?

Aside from the petulant entitlement of suburban kids, what do Ralphie and I have in common? We both had fundamentally misunderstood the nature of gift. It’s not our fault, exactly. Western societies like ours have been conditioned to define “gift” very differently than did ancient cultures, including the cultures inhabited by Jesus and Paul. Jacques Derrida, one of the major players in the postmodern philosophy known as deconstruction, argued that, by definition, a gift must come with no strings attached:

For there to be a gift, there must be no reciprocity, return, exchange, countergift, or debt. If the other gives me back or owes me or has to give me back what I give him or her, there will not have been a gift, whether this restitution is immediate or whether it is programmed by a complex calculation of a long-term deferral or difference.[1]

That likely sounds natural enough to us, but here’s the problem: from the perspective of the biblical writers, it’s exactly backwards.

As the Bible understands them, gifts do come with strings attached. That’s the whole point. The Greek word for “gift” is charis, which, as it happens, is also the word for “grace.” But that doesn’t mean that grace is free. Now, I can hear Protestant alarm bells ringing, so let me clarify. When the Apostle Paul says “it is by charis that you have been saved” (Ephesians 2:8), he does mean that God has done something for us that we could not have done for ourselves and that we couldn’t possibly earn. God’s grace is superabundant in the sheer magnitude of the gift, Jesus Christ himself (the gift whom Paul describes as “inexpressible” in 2 Corinthians 9:15); it is singular in that it is extended to us solely out of divine love and at divine initiative; it is incongruous in that it is offered to undeserving recipients who cannot — and are not required to — meet a standard of worthiness in order to receive it; and it is unconditioned in that God gives it to us without regard for our status or virtue.[2]

When the New Testament uses the language of “gift,” it means all this and much more; but one thing that it absolutely does not mean is “something I can do whatever I want with.” In the biblical imagination, gift-giving both presupposes and creates an enduring relationship of mutuality in which the giving party expects a reciprocal, although not necessarily proportionate, return from the receiving party. Gifts create obligations in the most basic sense of that word: ties that bind two people together.

To put it simply, God does not give us gifts primarily for our own personal enjoyment or to do with whatever we please; he gives us gifts with the expectation that we’ll use them for his purposes. My grandmother expects me to wear my Christmas socks, just as Aunt Clara expects Ralphie to wear his bunny suit. The gift is as much about the giver as it is about the recipient. The entire notion of gift is only intelligible within the context of a world where God has already decided not only to share his life with his creatures, but also to deputize them in the governance of the world he made, which is the very story Genesis 1-2 is telling. In the context of this story, gifts are something for which human beings are accountable.

A Lesson in Kingdom Economics

Jesus often expressed this same idea through his parables. The stories Jesus told have many recurring characters — the shepherd, the farmer, the merchant — but some of his most challenging teachings center on the oikonomos, the steward (e.g., Matthew 25:14-30; Luke 12:42-48; Luke 16:1-8). The oikonomos was a servant or a slave entrusted with the administration of a master’s oikos (household), the root of our English word “economy.” (And if you’ve ever wondered why high schools used to offer courses in “home economics,” this is why.) The oikonomos was almost always a slave, but this was a position of immense influence and agency. When we think of a steward, we shouldn’t imagine a butler or a waiter; we should be thinking of someone like Joseph, who had been fully authorized to manage the affairs of Potiphar’s estate (Genesis 39:1-6). A steward was a powerful person, but only insofar as they exercised the power of the master. At the end of the day, the master could always ask for an accounting of what had been done with his wealth.

Perhaps now we’re in a position to explore one of Jesus’s most famous — and most infamously misunderstood — teachings: the so-called Parable of the Talents, in which three stewards are entrusted with varying degrees of venture capital by the master of the house (Matthew 25:14-30). This story has been subject to a particular kind of abuse in the Faith and Work movement: Jesus, so this interpretation goes, wants us to be “five-talent people” who go out, do great things for God, and maximize return on investment (sometimes understood explicitly in monetary terms). But if we read the parable carefully, we’ll notice that the sheer volume of return isn’t really the point at all. The two “good and faithful” servants — one of whom made another five talents while the other made a return of only two — receive identical commendations from the master: “You have been faithful over a little; I will set you over much. Enter into the joy of your master.”

But what of the third oikonomos, the one whom the master upbraids as “wicked and lazy”? What is the master so fired up about? After all, the third servant didn’t lose the initial investment. The problem with the third oikonomos is that he wasn’t an oikonomos at all: charged with investing his talent, he buries it in the ground instead. One gets the sense that the master would have preferred that the steward risk the talent and lose it in some precarious venture rather than simply bury it. Why is the master disappointed? Because it wasn’t really about the money in the first place. It was about the relationship. The master gifts the steward as a gesture of trust and partnership — just as God gifts humans in Genesis 1 and 2 — with the expectation that the steward will use these lavish gifts to contribute to the flourishing of the world. But the wicked and slothful servant is not up to the challenge of a fully human life. In the words of Frederick Buechner, he “plays it safe with his life, living as carefully as he can without really living at all.”[3]

Stewards of Varied Grace

“As each has received a gift,” says Peter, “use it to serve one another, as good stewards of God’s varied grace” (1 Peter 4:10). Notice how fluently Peter speaks the language the divine economy — gift, stewardship, grace. Each of us has something singular to offer to the household of God, a unique way in which we’ve been graced so that we can turn around and grace the world.

Notice, too, a point that is perfectly obvious and yet perfectly easy to overlook: gifts are meant to be used. Aunt Clara wants you to wear the bunny suit. And that’s because it was never really about the bunny suit; it was about the delight the giver takes in the recipient, the trust placed in the receiver of the gift, and the relationship that binds giver and receiver together. When it comes to Kingdom Economics, the only currency that matters in the end is grace and the only return that matters in the end is love: “All things in this world are gifts of God, presented to us so that we can know God more easily and make a return of love more readily.”[4]

For free resources on faith, business, calling and investing, visit denverinstitute.org.

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[1] Jacques Derrida, Given Time, vol. 1: Counterfeit Money, trans. Peggy Kamuf (Chicago: University of Chicago Press, 1992), 12. Emphasis in the original.

[2] See here John M. G. Barclay, Paul and the Gift (Grand Rapids, MI: Eerdmans, 2015), especially 70–75 and 565–67.

[3] See Frederick Buechner, “The Gates of Pain,” in A Crazy, Holy Grace: The Healing Power of Pain and Memory (Grand Rapids, MI: Zondervan, 2017).[4] Ignatius Loyola, “The First Principle and Foundation,” in David Fleming, SJ, Spiritual Exercises of St. Ignatius: A Literal Translation and a Contemporary Reading, 2nd ed. (Brighton, MA: Institute of Jesuit Sources, 1978).

Photo by NeONBRAND on Unsplash

Article originally posted here by Bill High

by Bill High

What percentage of your income do you give away? And does it matter?

For many Christians, the concept of giving starts (and often ends) with a tithe. Church members are often instructed, or perhaps encouraged, to tithe. That’s been the standard for years in the church—give 10% of your income. Of course, it’s a standard that relatively few givers adhere to. More on that later.

For those who take the tithe seriously, you’ll often hear the question of whether that 10% should be of one’s gross income or net income.

You might be surprised at what you find about the tithe in the Bible.

The first time we see a tithe paid is when Abram gives 10% of the spoils of battle to the priest Melchizedek in Genesis 14.18-20. But the idea of a tithe continues to be fleshed out as Moses gives the law to the nation of Israel.

In fact, there are three tithes:

1. The Levitical Tithe (Number 18.21-24), which was a tithe to help support the priests;

2. The Tithe of the Feasts (Deuteronomy 14.22-27), which was an annual tithe recognizing God’s blessing; and

3. The Tithe for the Poor (Deuteronomy 14.28-29), which was a tithe for the poor every three years.

If you add all those up, the percentage would be 23.33% a year. Do you know anyone who tithes at 23.33% per year?

Offerings on top of tithes

But wait, there’s more. What’s amazing is that on top of the tithes, there were also voluntary offerings that were part of worship in the tabernacle (and later, the temple). There were at least five different offerings, including the Burnt Offering, the Grain Offering, the Peace Offering, the Purification Offering, and the Reparation Offering. These were voluntary offerings and represented personal sacrifice and worship all at the same time.

Some of those offerings required, for instance, the sacrifice of a firstborn lamb. And let’s face it, if you were a shepherd that would not have been easy to do. But those offerings were designed to be the reflection of gratitude and of dependence on God.

Let me pause. I’m not trying to drive to a result here. I’m merely raising questions. You likely know that most Americans, Christian or not, don’t give 10% of their income. On average, most Americans give something just north of 2% of their income each year.

Despite the 10% standard taught in the church, the government actually allows a far more generous standard. You can actually deduct up to 60% of your income each year. Of that 60%, you can actually deduct up to 30% of your income using noncash assets.

In the New Testament, Jesus didn’t offer such formulas. He told the rich young ruler to sell all that he had and give it to the poor. Zacchaeus, after repenting, told Jesus that he’d make restitution and give half. By his own example, Jesus, wherever he went, whatever he did, always seemed to be giving, healing, teaching. His message: give as you’ve been blessed.

I’ve heard it said that your checkbook register, even your electronic one, is a reflection of what you value. How we spend our money and time are true reflections of what we consider most valuable.

So I’m not opposed to the idea of giving as a percentage of income, as it allows us some opportunity for accountability in this area of our lives.

How do you measure your own generosity?

by Brian Gardner

When Jesus looked up and saw a great crowd coming toward him, he said to Philip, “Where shall we buy bread for these people to eat?”  He asked this only to test him, for he already had in mind what he was going to do.  – John 6:5-6

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I don’t like poverty.  I’m uncomfortable enjoying my abundance alongside others who struggle daily to make ends meet.  The questions sometimes haunt me: Why them, and not me?  Where could we possibly get enough “for these people to eat”?  

I don’t want the poor to disappear, but I do want their poverty to disappear – for them to rise above hand-to-mouth subsistence and enjoy an abundance of their own.  Yet it seems in some ways that we are moving backward.  While significant strides have been made to reduce extreme poverty worldwide in recent (pre-Covid) decades, there is also this: the wealth gap is huge and increasing rapidly (1), underscoring and exacerbating the divisions that exist everywhere to the detriment of us all.

Yet by now we know: giving stuff to the poor doesn’t necessarily make them not poor.  In fact, simplistic efforts at poverty alleviation can make matters worse rather than better if they fail to address the reality that in its many dimensions, poverty is not only about the lack of material resources necessary for human survival, but also the lack of things crucial to human flourishing (2) – including a sense of personal worth (3), contribution to society, and hope for the future.

So, what are we to do?  To that question, I offer this one: What if instead of merely sharing our money, we shared ownership of the means by which we produce it?   

Read that again.  What do I mean?  

Consider: What did God intend when he commanded his people to practice jubilee?  In that arrangement, families who had fallen into hardship, forfeited their land, and become indentured servants would not always remain in that state.  Jubilee offered them not only debt-forgiveness, but also a return to ownership of a productive asset (land).  Servants, whose hard work accrued primarily to the benefit of their masters, became landowners, whose labor and ingenuity could create wealth for themselves and their families, freeing them from perpetual reliance on the charity of others.  

While they were part of an agrarian society, and we are not, I feel compelled to ask: How can we apply the timeless principles of jubilee to our modern economy, contributing to the flourishing of all?  

My answer as an investor to this question is simple: by sharing the success of the company with its employees through well-designed equity or profit-sharing arrangements, offering them tools and encouragement to build strong personal balance sheets.  We’d like to measure the social impact of our investments in part by increases in the net worth of entry-level employees of our portfolio companies. 

I find this answer compelling because:

1. It is generative rather than purely redistributive, offering the chance for everyone to win because it is not a zero-sum game.  Since wealth is the accumulated surplus of production over consumption, increases in production more than consumption creates new wealth.  And when is a man more likely to be industrious and clever and productive: When he is a servant, or a landowner (4)? 

2. It offers people dignity and a sense of agency, satisfying their intrinsic need to engage in meaningful productive work.  I believe everyone can benefit from the opportunity to experience the joy of thinking more like owners than laborers.  

3. It removes barriers. By aligning investors, operators, and employees, this approach might foster a sense of community, providing a welcome counterpoint to fractious forces that characterize all of our interactions as “them or us” power struggles.

4. It is measurable and relatable.  A strong balance sheet typically signals a healthy and resilient company.  It stands to reason that improvements in employee balance sheets will provide a reasonable (though imperfect) proxy measure for improved health and resilience for their households.

I also find this answer disturbing, probably for obvious reasons.  Might our “generous investing” lead to less profitable investments, or benefits for the undeserving?  Maybe.  Yet for members of Christ’s coming-and-now-here kingdom, called to imitate him and participate in his redemptive work in the world, generosity is both par for the course and potentially transformative.  I’m challenged by the compelling definition offered by our friends at Praxis Labs: “Redemption means restoration through sacrifice. (5)”   

But in my disturbance, I’m also comforted by the recognition that God’s economy is quite different than ours.  In it, there is plenty for everyone.  Scripture often emphasizes the reality illustrated in the feeding of the five thousand: God routinely produces abundant returns from small sacrifices, blessing many people, including those making the sacrifices (6).  I’ve found biblical scholar Walter Brueggemann’s observations about the “myth of scarcity” provocative as I think about the redemptive possibilities of this idea.  As he says, “the real issue confronting us is whether the news of God’s abundance can be trusted in the face of the story of scarcity (7).”

So, trusting the news of God’s abundance, we aim to grow profitable companies that increase the net worth of entry-level employees.  This will involve providing them not only with access to living-wage employment, but also tools to build financial fluency and resilience.  For that, our toolkit includes:

• Employee profit sharing, pseudo-equity, or equity: In the pro forma for any potential acquisitions, we’re allocating a line for employee profit sharing (8).  We believe that doing so will not require a concessionary investment hurdle rate, because the overall approach will lead to a more aligned workforce and hence a more profitable company, meaning investors get a smaller slice of a larger pie (9).  While this belief requires making a bet on profit growth, that is a bet I’m personally willing to make because I think it is consistent with God’s nature and design of the world.  

• Open book management: By coupling a basic primer on the company’s financials and key drivers of success with high-level reviews of its goals and performance at all-employee quarterly briefings, we aim to engage them in discovering profitability improvements by helping them see the bottom-line impact to themselves.  Since no one watches the shop like the owner, we want all to think like owners – because they are!

• Personal finance education and tools: By providing elective financial education to employees, and some basic personal finance tools, we hope to equip them for budgeting, saving, and avoiding financial pitfalls.  The aim is to support them on a path to robust financial health.  

• Saving & investing support: As part of their financial education, employees can receive guidance on building personal balance sheets.  With appropriate confidentiality measures, we hope to track growth in their net asset positions, providing one of the key impact metrics for the investment.  Since one consistent challenge to saving for many is the inability to see progress toward long-term financial goals sufficient to motivate adherence to a plan, we hope to make progress in asset-building visible, incremental, and motivating, and are considering the potential relevance of gamification (10) to this challenge. 

• Relevant financial products & services: With sufficient scale (and possibly company subsidy), we hope to negotiate favorable terms with financial services providers that could provide support for appropriate lending products (e.g. car and home loans, sensible emergency loans), savings products (incentivized development accounts, etc.), and insurance products.   

• Generosity support: As it is more blessed to give that receive, we aim to encourage and support employees’ charitable giving.  The surprising results of doing so are but one of many fascinating elements of the story Pete Ochs shares about his work at Seat King (11). 

Will growing companies in this way eliminate the poverty of all of the world’s poor?  No, it won’t.  But I believe it can help, it can scale, and it offers a very practical way for us to live and operate daily in alignment with our own prayers, as Christ taught us to pray: “Thy kingdom come, thy will be done, on earth as it is in heaven.”

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References

1  https://apps.urban.org/features/wealth-inequality-charts/

2  For a helpful exposition of this idea, see Steve Corbett and Brian Fikkert, When Helping Hurts: How to Alleviate Poverty without Hurting the Poor…and Yourself

3  As God exhibits both productive work as well as rest in the creation account, I believe that each is essential to our fulfillment as his image bearers.  In Small is Beautiful: Economics as if People Mattered, E.F. Schumacher expresses it well: “…to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.”

4 The summary of studies available at https://www.nceo.org/article/key-studies-employee-ownership-and-corporate-performance is instructive on this

5  See https://praxislabs.org/mission-and-model.

6 For example, see Proverbs 22:9; Proverbs 28:27; 1 Kings 17:7-16; and Luke 6:38.  

7 Walter Brueggemann, “The Liturgy of Abundance, The Myth of Scarcity” (available at https://www.religion-online.org/article/the-liturgy-of-abundance-the-myth-of-scarcity/ )

8 The implementation will vary based upon circumstances.  Our primary goal is to allow employees to share in the financial success of the company and to give them tools, supports, and incentives to “invest” in it and to think about it more like owners/stewards than hired laborers.  While ESOPs offer a mechanism for sharing wealth with employees, they have their limitations and downsides.  So we are keenly interested in creative alternatives that provide some of the key benefits without all of the baggage.  

9 Even if increases in profitability associated with profit-sharing or employee equity programs are not sufficient to offset the investor “loss” associated with them, I pose the question: How much return is enough for investors?  I find it interesting that, compared to returns typical of a broad public-market investment strategy, the yields available in private equity investments are sufficiently high that investors might do as well holding those investments for a reasonable period, then giving the equity outright to the employees.  This is not intended to be overly simplistic about the unique risks associated with PE investments, but let’s consider that when establishing risk premiums, the “golden rule” applies: Those who have the gold make the rules.  

10 For more on gamification, see  Yu-kai Choo, Actionable Gamification 

11 For more, watch “Pete and Debbie Ochs – Jailhouse Generosity” at https://www.capitaliii.com/impact