Impact Investing and Faith: The Journey Starts with “why”
by Stella Tai
The foundation of my work as an impact investing professional is my faith. It is the “why” that inspired and guided me on this path. I have that in common with tens of thousands of others around the globe who are working, both as individuals and organizations, for positive change. Here are some ways that “why” makes a profound difference.
“Why” Drives the Work
Consider community development financial institutions (CDFIs). The work they do isn’t particularly different from other banking or financial services providers, but the reason why these nonprofits provide this capital and how they distribute that capital in underserved communities is.
They focus on providing fair financing to borrowers whom mainstream finance wouldn’t traditionally reach. In this way, CDFIs use the tools of finance – such as banking services and providing capital and small loans to business owners – to help address poverty in underserved and underrepresented communities.
“Why” Drives Investment Selection
For many faith-based investors, the goal isn't merely to generate financial returns but instead to strive to make a real-world impact, motivated by a sense of responsibility to love one’s neighbor as yourself. Their faith instills a duty to use their resources – be it capital, influence, or expertise – to uplift those who are marginalized, underserved, and economically disenfranchised.
“Why” Puts the Focus on Community
To love our neighbors as ourselves, we need to know our neighbors. Community development investing (CDI) helps address needs that may otherwise go unmet – to recognize and respond to those often left on the margins. Microfinance, neighborhood redevelopment, low-income housing, and disaster recovery investing can demonstrate that we see and can respond to the needs of our neighbors.
As part of Praxis Mutual Fund’s commitment to our neighbors locally and globally, we invest approximately 1% of our assets under management to support deep-impact community initiatives via Calvert Impact. We seek to align our work – and our investors’ dollars – with Biblical teachings to uplift the downtrodden and support the marginalized.
“Why” Enriches Our Personal Journeys
Witnessing the transformative power of faith and investing is a profound experience. In 2022, during a visit to my birth country, Kenya, I saw firsthand the far-reaching effects of community development work. Visiting various impact sites related to Praxis CDI investments, I saw God's presence in how these CDFIs were able to help communities flourish economically. The objective of these organizations is clear: to create lasting change that allows locals in these communities to be empowered and to rise out of poverty.
Working in the field of faith-driven impact investing is as rewarding as it is challenging. At the core of our mission is a sentiment that echoes Matthew 22:39, where Jesus teaches us to "love your neighbor as yourself." By marrying faith with action, we can contribute to a future where prosperity and opportunity are not limited to a select few but are accessible to all.
Stella Tai, Stewardship Investing Impact and Analysis Manager
Stella provides primary leadership for the promotion, integration and development of impact investing and reporting. Stella guides the development of financial products that meet the needs of low-to-moderate income communities, helps promote the integration of faith and finances through Everence products and services, and works to grow opportunities for impact investments. Connect with Stella on LinkedIn.
About Praxis Mutual Funds
Founded in 1994, Praxis Mutual Funds® is a leading faith-based, socially responsible family of mutual funds designed to help investors integrate their finances with their values. Praxis is the mutual fund family of Everence Financial®, a comprehensive faith-based financial services organization helping individuals, organizations and congregations.
Consider the fund's investment objectives, risks, charges and expenses carefully before you invest. The fund's prospectus and summary prospectus contain this and other information. Call 800-977-2947 or visit praxismutualfunds.com for a prospectus, which you should read carefully before you invest.
Praxis Mutual Funds are advised by Everence Capital Management and distributed through Foreside Financial Services, LLC, member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.
Mutual fund investing involves risk. Principal loss is possible. The Fund’s investment strategy could cause the fund to sell or avoid securities that may subsequently perform well, and the application of ESG (environmental, social, governance) and/or faith-based screens may cause the fund to lag the performance of its index.