Redeeming Your 401(k)
Image taken from The Gospel Coalition
This article was originally published here by The Gospel Coalition.
We're huge fans of Finny, Robin, Jason and the team at Eventide, and love the way that they are taking a redemptive look at investing. We recently featured Finny on our podcast, and it was great hearing his perspective on the influence of capital to shape the world for good. Some of our friends at The Gospel Coalition recently did a story on Eventide’s work. We’re excited to share it with you:
While Christian ethics around trade (be fair) and services (don’t cheat) and payments (don’t withhold them) is as old as Proverbs, the modern market is a complicated place.
“Most Christians are so removed from their money they don’t even know where it is.”
“One of the great financial developments is the role of an intermediary, such as a bank,” said Greg Phelan, assistant professor of economics at Williams College. “You and I—and almost everybody—would rather just deposit at the bank and withdraw when we need than figure out what small businesses or mortgages to lend to. I don’t have that expertise. And I don’t want to make loans that come due in years.”
It’s a wonderful, common-grace development that aids human flourishing. But it does mean people don’t directly oversee how their money is invested.
The same principle holds for stock-market investments—it takes so much time and energy to figure out which companies are worth buying that most people pay someone else to do it.
Add to that mutual funds (which ease risk by holding a little bit of a lot of companies) and company-provided 401(k) retirement plans (where employees often have little to no control over the investments) and most Christians are so removed from their money they don’t even know where it is.
And that level of confusion isn’t even the biggest part of the problem.
Sunday-to-Monday Gap
Today’s faith-and-work experts call it the “Sunday-to-Monday gap”; older faith-and-work experts called it the “sacred/secular divide.”
They’re talking about the disconnect between worshiping in a church pew one day and making photocopies in the office the next. Over the past few decades, the faith-and-work movement has been working to reconcile the two through books, conferences, podcasts, and fellows programs.
But if it’s hard for a Christian to puzzle out how God is redeeming emails and sales calls, imagining his will for savings accounts or retirement plans is even harder.
Especially because, for a long time, the gold standard for investing was to “maximize shareholder value” at any cost. Good investors didn’t waste their clients’ money on companies that didn’t have high, quick returns. Christian businessmen, who sat in the same MBA classes as everyone else, maximized profits to serve their clients and to give to the church.
Before Eventide was founded, others felt the same angst that Kuruvilla had. In 1992, Arthur Ally launched a mutual fund that screened out companies making money off abortion, pornography, alcohol, tobacco, and casino gambling. (Today the Timothy Plan also screens for “anti-family entertainment and alternative lifestyles.”)
Ally started the National Association of Christian Financial Consultants (NACFC) in 1997, the same year Larry Burkett started pulling Christian advisers together in what would become Kingdom Advisors (then known as the Christian Financial Professionals Network).
But still, the idea behind biblically responsible investing was young. The faith-and-work movement was just starting to bubble. Most people yet hadn’t considered God’s intention for their workdays—much less for business or investing.
Starting Eventide
In 2008, Kuruvilla, John, and a few others started Eventide Asset Management. (The name is Old English for “evening” and was chosen because humanity is in the evening of this present age while also being in the dawn of the next age—already, but not yet, redeemed.)
They sought companies that created “compelling value for the global common good”—in other words, companies that prospered by providing quality goods and services, stewarding creation, and treating employees, customers, and stockholders with integrity. They invested in a pharmaceutical company working to cure intestinal diseases, a paper company with sustainable practices, and a company supporting open-source software.
“For the first year, we started by investing the money of our friends and family,” John said. “We got a little over a million under management.” (It sounds like a lot, but Eventide’s revenue from that year was only about $10,000.)
The second year, financial advisers from organizations like Kingdom Advisors and NACFC—places that “were already passionate about aligning their values and investing”—brought Eventide’s investment amount up to $7 million, John said.
The third year, faith-based investors pushed Eventide investments up to $21 million. The fourth, to $34 million, and the fifth to $86 million. And then came year six.
Check out the rest of this article here!