Check out Christian Investment Forum for other quality content!

— by Christian Investment Forum

There are two commonly asked questions when the Christian Investment Forum introduces our mission of “Advancing the Awareness and Use of Biblically Responsible Investing“. They are “What is BRI?” and “Why should BRI be used?”. This article presents information from the Christian Investment Forum to educate advisors on the topic, and provide knowledge that can increase the confidence of advisors in the opportunity to embrace BRI.

What is BRI? Defining Faith Based Investing

The definition of Biblically Responsible Investing (BRI) used and promoted by the Christian Investment Forum (CIF) remains purposefully broad. While there are some examples of the term BRI being narrowly used for only a specific set of criteria for investing, the use of the term BRI by the Christian Investment Forum is broad and is interchangeable with other similar terms used by investors who incorporate Christian faith into the investing process. Those include Faith Integrated Investing, Morally Responsible Investing, Stewardship Investing, Values Based Investing, and others.

In this broader scope, Biblically Responsible Investing is a term used to describe an approach to investing assets in a way that is in alignment with the investor’s faith and Biblical beliefs. The definition that CIF uses is as follows:

“Biblically Responsible Investing, or BRI, applies Christian values to investment decision making by incorporating moral and social principles into traditional financial analysis. BRI provides a platform for the faithful stewardship of God’s gifts on the basis of our shared Christian faith. BRI seeks to invest in and own companies that best represent those Christian values.”

By defining BRI as an approach that seeks to align investments with the investor’s faith and Biblical beliefs, BRI is by definition a personal process. While Christians share core foundational beliefs, it is also true that on many topics personal faith will lead Christians to differing opinions and more importantly differing priorities. This makes it difficult to place a simple label or definition on what BRI is and what it is not, or how it is applied into the investment decision making process. In this sense, BRI is an approach to investing, one that is explicit in incorporating Christian values on social, environmental, and governance issues into the investment decision-making, management, and engagement activities. In our view, BRI is not a certification process or method to quantify performance.

As the Christian Investment Forum defines it, BRI is not a legalistic concept or practice, it is a motivation. Simply said, the heart of BRI is the heart. No one can act as judge to certify one portfolio as BRI and another as not BRI certified.

But what does that really mean? It means BRI is about “doing all we can do to give God our best”. BRI is about loving what God loves, and seeking to own and profit from companies that align with that love. Conversely, it is about avoiding companies that conflict with that love, or are more aligned with our sinful nature. In practice, that often means not investing in companies that profit significantly from things such as addictive behavior, abortion and pornography, and abusive practices toward God’s physical or human creations. And it is also about finding and investing in companies that positively impact their communities, the environment and our society.

In practice, BRI becomes a more complex process of setting values, priorities, and appropriate thresholds to develop a clear approach to investing. It also requires detailed levels of information and transparency so that the values, priorities and thresholds can be objectively measured and managed.

Why Should BRI Be Used?

After the question “What is BRI?”, the next question is often “Why is it important?”.

At CIF, we hope all Christians will begin to embrace BRI….to see it as a necessary part of putting God above ourselves and the possessions that we steward for him. We believe there are persuasive reasons to use BRI, and they include both moral and economic reasons.

BRI is the Right Decision as a Christian

Following the definition used for Biblically responsible investing earlier, BRI is a process and not a standard. It is about integrating Christian faith into investing. As such, it seems difficult to believe there is any other approach to investing that meets our Christian values. The alternative would be to actively avoid incorporating our Christian values into this part of our lives, to compartmentalize investing from other activities, to leave our faith for Sunday only. To leave investing out implies it is not important to God, or that investing is more important to us than God is.

Using BRI is not an either/or question. BRI does not replace the need to be Christian in other parts of our lives, or in other ways in which we use money (earning through work, spending wisely, and giving it generously). If the goal is to seek to fully integrate Christian faith into our lives, then each area of our lives needs attention to successfully integrate. Being generous with your time and treasures is wonderful, but it doesn’t give permission to lie, cheat or steal in other parts of your life. So while the goal is full integration and interconnectedness, that obliges us to strive to be better in each unique area, to do all we can do to give God our best.

With that perspective, investing must be considered separately from earning, spending and giving. Investing in a way that puts God above ourselves, that aligns with Christian faith, and meets our

responsibility to be good stewards of what God has provided, are the critical components. Being a Christian investor is not about meeting some arbitrary test, or favorably comparing to others in a holier than thou way. It is about keeping perspective on priorities, and continuing to strive to steward what God has given us in a way that honors him and our Christianity.

BRI is Good Stewardship

A commonly held belief today is that investing, particularly through the many layers of mutual funds, ETFs and other financial products, is not direct ownership in a business. It is easy to see why that thinking exists.

• Investing has long been artificially divorced from its basic purpose, which is supplying capital to support businesses

• Most investors are trying to profit from the market itself, rather than from any productive and intrinsic value of the underlying companies

• A widely accepted view is that low cost, low fee products like ETFs or passively managed index funds are preferred investments, once the concept of investing is divorced from its primary purpose

• Investing has become commoditized and depersonalized

• Most people, and even some of their financial advisors, don’t know what companies they

  actually own

Despite this, by investing in equities you do become the legal owner of the stock of the company issuing the equity, even if that stock was purchased in the market and not directly from the company. Legal ownership is not affected by the flow of the money used to buy the stock, whether it goes to the company directly, or to the owner of the stock who sells it.

Ownership confers responsibility whether that ownership is direct ownership of a small business, or being a small owner in a large corporation. By becoming an owner, an investor sanctions and benefits from the activities and practices of the company.

Thus, as a steward of God’s assets it is appropriate to do everything we can to do our best, understanding we can never be perfect, to manage those assets in a way that honors God, is not contrary to his commands, and is not against our Christian faith and values.

BRI is Credible and Meets Fiduciary Standards

One concern often raised about BRI is that it violates Fiduciary Duty. Fiduciary Duty is simply the legal duty to act solely in another party’s (presumably the investor client) interests. Whether a client investor is Christian or not, the approach of incorporating values into investing is now accepted as meeting reasonable fiscal and fiduciary responsibility. Those held to the highest standard on fiduciary responsibility through ERISA laws are allowed to incorporate social or value screens into their investment decision making, as long as it is part of proper financial analysis, due diligence, and an established investment plan. Incorporating Christian values into equity selection is not a replacement to the professional financial analysis that is required, and only adds to the investment decision making process.

15 years ago there were no more than 5 mutual funds that described themselves as BRI focused. Today there are many different mutual fund options from those that incorporate Christian values into their investing. Funds are now available in most of the core investing categories, with over 70 funds in 28 categories available from members of the Christian Investment Forum. The performance of these funds, based on ratings from firms such as Morningstar and Lipper, closely align with the performance of industry averages and the full universe of investment options.

Separately managed accounts are also available, as are portfolios designed by Chartered Financial Analysts. Model portfolios are available that only use BRI funds, while other portfolios may include BRI funds along with non-BRI funds. The greater number of fund options and fund managers available today decreases the risk of manager bias or poor diversification.

BRI is a Good Business Decision

Research has shown that the vast majority of investors want their investments to align with their faith and values. With about 78% of the U.S. population identifying as Christian, the majority of the total population then would like to align their investments with Christian values. This viewpoint is growing with the next generation of Millennials reaching their core investing years. Millennials are even more committed to an integrated view of their work, money, and beliefs. What most investors don’t know is the wide availability of investment products that can meet this desire, and the performance of those products. Most investors still rely on wise financial counsel in how their money is managed, and don’t know how to ask for their money to be managed in this way. By engaging on this topic, an advisor can form even stronger relationship bonds with clients.

Research is now also consistently showing that using BRI criteria in investing does not have a negative effect on performance. Instead, research is suggesting that the relationship tilts more heavily towards out-performance. A recent report by Mercer Research reviewed 36 academic studies on the relationship between using BRI like criteria in the investment process (they use the term ESG – environment, social, governance). They found, as Figure 1 highlights, that 83% of the studies concluded that the relationship was neutral or positive.

The point of these findings is that market opportunity exists for those advisors confident enough to present the data to investors, and to open the conversation in the same way the advisor opens conversations about inheritance, giving, debt, and other topics that are critical to providing wise counsel.

SUMMARY

The moral reasons for using BRI – aligning with faith and being a good steward – are the primary reasons to incorporate BRI into a practice. The economic reasons provide comfort that investing in BRI funds is as justifiable as investing in non-screened funds from a purely professional financial management perspective. Whether investing in BRI funds or non-BRI funds, we all know that past performance does not predict future returns. However, research is suggesting that using BRI has had a neutral or positive effect on performance. Investors are increasingly saying the alignment of their investments is important to them, even if they are not sure how to ask how.

Given all of these factors, the question about using BRI should not be WHY? It should be WHY NOT!?!

This article was originally published here

Check out Impact Foundation for other quality content!

Our friends at Impact Foundation recently took a trip to Ethiopia, and this is Part 1 in the series of things they learned and found there. For more in this series, visit their website.

— by Impact Foundation

“Jobs, not aid, are the most urgent need of these starving people,” I thought. We crouched on the dirt floor of a twelve-foot diameter grass hut in the Omo River Valley of Southern Ethiopia. Twenty-one hours away from the capital city live the Kara, Hammar, and Benna tribes—people who use cell phones to communicate but whose ways are otherwise unchanged from those of their ancestors who settled the region thousands of years ago. Picture the most remote tribal images you have seen in a National Geographicmagazine, and you are likely thinking of these people groups.

We sat in that hut listening to Ari, a member of the Kara tribe, describe the effects of a government program to dam the Omo River for flood control and to provide hydroelectric power to parts of the region. The dam ended the practice of planting crops in receding flood waters. Plus, the dam changed the chemistry of the river making the water muddy, undrinkable, and unfishable.

In the first few years after the dam was completed, these problems were manageable because a Turkish company opened a 25,000-acre farm that employed many people from the local tribes. It also operated an irrigation pump to bring fresh water to the villages. Unfortunately, all than ended 18 months ago when the company hit hard times in their corporate office and left the region abruptly.

Ari described how since then people have been starving, and entirely dependent upon bags of sorghum that an aid group intermittently delivers. While he talked, Ari’s wife sat with us, occasionally dipping into a plastic bucket of mud-colored liquid. As she drank, she became more and more disengaged.

“Do people use the sorghum to make hooch?” asked one member of our group. The answer was vague but we later got more of the story from our host, Lale a man born in the Kara village and who later attended boarding school, ultimately obtaining a college degree in the US. As the only member of his tribe to ever have traveled abroad for schooling, he is one of only a handful who are college educated. Lale explained that his friends spend most days drunk. Without fishing, farming, or a job to fill their days, there is little reason to do anything else.

Lale, who lives in a nearby city, and another member of the Kara tribe during our visit to the village.

As hard as it was to watch the scene inside the tent, it was heart-wrenching to watch the children outside the tent. Little ones with distended, undernourished bellies, clamored for attention but many adults were too affected by alcohol to give it. Instead of learning farming, fishing, and household management practices that have been passed through generations, the kids are learning from these elders how to survive on handouts.

We will never “charity” our way back to sustainability for the Kara, Hammar, and Benna people. Worse, as people become dependent on the charity’s aid it threatens their way of life as they lose ancient skills in a single generation. Our time in the hut demonstrates in miniature what is happening all over Africa due to war, genocide, AIDs, drought, corrupt governments, and too much aid.

Charity or government aid is critically important component of emergency response to crisis, such as genocide, famine, war, and mass displacement. The question becomes at what point should the focus appropriately shift from aid and emergency relief to investment and economic development.

Carried too far, aid can create dependency and cause more problems. Many good books have been written to elucidate this cycle, like When Helping Hurtsand Toxic Charity,but our new favorite is Social Impact Investing: A New Agenda in Fighting Povertyby Kim Tan and Brian Griffiths. Through data from the United Nations and the World Bank, the authors point out the inverse relationship between the volume of aid dollars and economic growth in sub-Saharan Africa. In other words, the more aid that is sent, the worse various economies fare. We cannot sustainably overcome poverty with aid.

There are bright spots in Ethiopia, though, where large-scale business is making a difference in driving back extreme poverty and ills of too much aid. The next blog posts in our Ethiopia Series will highlight the transformational work of Verdant Frontiers: “What Does it Take to Find Success” and “Understanding the Verdant Model”

This article was originally published here

Check out Mats Tunehag for other quality content!

Last week, God brought together 150 leaders shaping the Faith Driven Investor community to discuss what God is doing and how we might work together. One of our friends, Mats Tunehag led us in a prayer that was an adaptation of a well known prayer by St. Patrick. We thought it might be an encouragement and a great way to recalibrate as we start off our week.

— by Mats Tunehag

On March 17 many people around the globe celebrate St. Patrick. He was a human trafficking victim in the 5th century, who became a missionary to the people and land (Ireland) where he was a slave.

Let me share a well-known prayer by St. Patrick, and customize it to a prayer for faith driven investors: (the original is in bold and italics)

Christ with me, as I invest for the common good and God’s glory

Christ before me, as I steward the wealth entrusted to me

Christ behind me, as I evaluate opportunities near and afar

Christ in me, as I invest time, treasure and talents in others

Christ beneath me; He is the foundation

Christ above me, He is the owner of it all

Christ on my right, Christ on my left, He is the Lord of the marketplace

Christ when I lie down, and rest from my work

Christ when I sit down, in my office chair

Christ when I arise, enthusiastic or weary

Christ in the heart of every person who thinks of us, and our vision

Christ in the mouth of everyone who speaks of us, and our work

Christ in every eye that sees us, young and old, rich and poor, countrymen and foreigners

Christ in every ear that hears me speak about our products and services

Glory be to God the Father, the Son and the Holy Spirit, forever and ever.

Amen!

There is nothing like the power of getting together. There’s something catalytic about spending time praying for what God might do in this space. What started off as a small gathering of 30 friends we had to cap out at 175 leaders of the Faith Driven Investor gathering in Deer Valley, Utah for a day of prayer and shaping the conversation.

So many ideas that came from last week … It was so encouraging to hear ideas about things happening in real estate, private equity, employee resource groups and so much more. In the surveys we’ve already heard a desire for future events, content ideas, and possibly the idea of working groups to evaluate deals together … And thats just a few of them! There’s no way we can summarize them in one email, which is why we wanted to create this website for those conversations to continue.

This is very much in its beta form, but we hope that its something that you’ll be proud of and want to share with friends. In the coming weeks we’ll be adding blog posts with slides and notes from many of the speakers. We’ll also continue to update the Asset Map that captures who is serving in this movement and we’re planning to process the input on the Unifying Principles and have an updated version up by the end of August. We’re grateful for pastoral friends like Chip Ingram, Tom Nelson, Toby Kurth who have offered to provide theological leading to many of the things we discussed as the conversation continues. We also know that many smaller working groups might spring out of this for different spaces or to tackle some of the Areas Where Action is Required.

While things are fresh we wanted to highlight a few tangible ways we’d invite you continue to shape the conversation and lead out as a voice in the movement.

Encourage Others to Join the Conversation – If you know friends who want to join the conversation but couldn’t attend the event we encourage them to sign up for a monthly newsletter where we’re going to bring the best podcasts, articles, videos into one place.

Listen to the First Episodes of the Podcast – We’ve got four beta episodes we’ll be releasing over the next two months. You can start by listening to Henry Kaestner and Aimee Minnich on the introductory episode. And please be sure to send us your thoughts on format, topics and guests we should be consider. Then, stay tuned for these upcoming shows…

• Pete Kelly unpacks how Apartment Life is making both a Spiritual Impact and delivering a greater Financial Return.

• Trae Stephens talks about this idea of Abundance vs. Scarcity and Competition vs. Creation through the lens of Scripture.

• Christeen Rico talks about how Faith Communities are Strengthening Culture and Companies at Apple, Dropbox, Google.

• Frank Chen talks about being a Servant Leader to the Entrepreneurs they work with at Andreesen Horowitz.

Share Your Thoughts and Thoughts Shaping You – Yesterday on the blog we shared the prayer that Mats Tunehag shared with us last week at the event. We’d encourage you to check that out and let it recalibrate your heart as you start your week. Please send us posts, articles, videos, and/or sermons that you’ve written, or share what is shaping you so we can share with others.

We’ll continue to keep you updated about future gatherings as one way to spotlight work God is already doing to bring this community together. Many friends in this space are planning to be at the Christian Investment Forum that John Siverling hosts August 14-16 in Asheville, North Carolina and we’d encourage you to check that out!

We’re grateful to be on this journey with you and excited for what’s to come!

The Faith Driven Investor Team

Our friend Jerry Bowyer recently interviewed Ron Blue and Karen Guess to discuss the relationship between greed and material wealth. While Western culture tends to view materialism as something that only wealthy people experience, Ron Blue’s trip to Africa pointed to the fact that it is more of a human problem than a social one. See what else they had to say in the full interview below.

read original article at Forbes

Ron Blue and the late Larry Burkett double-handedly created the faith and finance movement among evangelicals in the 1970s. This was a time of rapid acceleration in the number of people (including Jimmy Carter) who publicly declared themselves to be ‘born again’. Chuck Colson wrote a book with that title. The social movement grew rapidly and institutions developed to serve it. Ron and Larry became that movement’s financial counselors.  Without them, there is no Dave Ramsey.

I interviewed Ron recently and he told me that the major turning point in his understanding about faith and finance came when he was visiting a friend in Africa. His friend lived in a mud hut perched atop a small patch of dirt. Pastor Daniel was, by American standards, quite poor materially. Ron asked him what the most important spiritual challenge which his African Christian parishioners faced. When the pastor answered, “Materialism”, Ron was shocked. Ron had somehow imbibed the notion that materialism was a malady of the wealthy Northwest quadrant of humanity, not the poor Southeast. It’s then that he realized that greed was a universal human problem. It afflicts both rich and poor and there is no income level so high that greed cannot sour it with discontent. Any economic class can feel financial fear. Any economic class can feel satisfied. Any class can be generous. Any class can be needy. Any class can worship money imbuing it with attributes that move it from useful tool to pitiless master.

In my experience people tend to think of people who work in finance as particularly susceptible to the vice called greed. Pastors and professors can rail against Wall Street, but are the preaching classes more generous than the financial classes? Do faculty show more generosity in foregoing pay increases in order to lessen the burden on their ‘customers’ than money managers? Ron tells the story of a CPA who had 85 pastors for whom he prepared tax returns and not one of them were tithers. I’ve seen rich people stab one another in the back for monetary advantage, but I also had a homeless friend whom I saw withhold funds that he owed to another man (a homeless vet suffering from PTSD) so he could buy tobacco. Pastor Tim Keller once said that in all his years of serving congregations no one had ever confessed to being guilty of the sin of greed—which is probably an indicator that maybe we all are.

I sat down across a Skype line with Ron and Karen recently and you can listen to the audio of that interview here and read a partial transcript below. Both are edited for clarity.

Note: While I do not have direct business dealings with Ron, I have spoken at events held by institutions with which he has been associated, such as Ronald Blue & Co. (which he founded but is no longer associated with), as well as Kingdom Advisors, and the Ronald Blue Institute at Indiana Wesleyan University. I have not received speaker’s fees from these events, though I did accept travel and lodging reimbursements.

Jerry Bowyer: There are stories of very poor people in “Never Enough?”. And there are stories of very rich people in “Never Enough?”.  And that tells me that these principles apply to the very rich and the very poor and everyone in between; is that right?

Karen Guess: Yes, it is. And I think that was what was partly exciting about writing it; they’re real stories, but getting to kind of express the principles in various ways through people that we knew.

And my second story that I was going to tell you was my favorite, because my dad picked mine, was Pam’s story, because Pam is somebody I know personally.  Hers is in the last chapter.  And I admire her from the bottom of my toes in terms of her professionalism ‑‑ she is just a woman of great class in her industry.

And her story is one of being humble through a season of being a single parent and choosing, even though she was a financial professional who knew all the stuff, she heard a sermon one Sunday at church just about the very basic principles of ordering your priorities and went home and had a conversation with her little girls — they were school-aged at the time – and said girls, this is what we’re going to do, let’s talk about how owe spend our money and they reoriented the way they spent.  And they had monthly meetings going forward.  And so I just appreciated the humility that she had to accept the fact that the principles are true no matter what your life experience is, and she just took a step back in her own life when it was time and reapplied them.

Bowyer: I think my favorite story in the book is a story that I’ve heard you tell before, Ron, which is when you were visiting Pastor Daniel in Kenya. And he’s living there with his wife and several children, and they’re in the mud hut on the edge of the village.  Chickens are pecking around and doing all the stuff that chickens do there in the front yard that isn’t really a yard.  And kids are playing with batteries in the dirt.  And you ask him, what’s the biggest challenge in the African church, and he answers, materialism.  How did that answer shift your view of the world?

Ron Blue: That had dramatic and ‑‑ that happened in 1980 or ’81, so almost forty years ago. But what it revealed in an instant that money was always related to the heart and that the true spiritual challenge was never money issues; it was always heart issues.  So it changed the way I thought about money, and it changed the way that I’ve counseled over the years.  And a line that I used all the time and a belief that I have, is that money issues are always symptomatic of what’s going on spiritually; even if you’re a non-Christian, there still are values and priorities and goals that you have, and you reflect them through your checkbook.  And I think the most objective measurement of spirituality is how you spend your money.  You reveal it through your checkbook and through your credit card statements, and tax returns, and so forth.  A very objective look at our finances, or at our spirituality through our checkbook.

And that instance with that pastor really got me started down that track.  And it also made me realize that the amount of money was not the issue.  I thought — before he said that — that materialism and consumerism was only an American problem.  But when that happened, I said oh, my goodness; it’s universal and it’s a disease of the heart.

So it changed the way I gave advice, it changed the way I wrote, the way I thought.  It really set me on a course.  And I look at it and say God was so involved in that that ‑‑ it was his doing to make sure that I had the right attitude about money.

Bowyer: I think the naïve discussion about money and the heart and greed is that greed is a rich-person problem.

Blue: Yep.

Bowyer: But it’s a person problem.

Blue: Yep.

Bowyer: Rich can be greedy or generous, middle class can be greedy or generous, poor people can be greedy or generous.

Guess: Yeah.

Blue: Yeah.