This is the first of the 2020 CEF Whitepapers. For more information on the Christian Economic Forum, please visit their website here.

by Alan Barnhart

The concept for the Kingdom Companies Group came from the journey that Katherine and I have experienced in our attempt to operate a business as stewards for the Most High God. As fallen creatures we have done so imperfectly and have learned lessons through our failures.

Barnhart Crane and Rigging Co. started in 1986. Prior to starting the company, we had engaged the Bible for guidance and we found extensive material there. It led us to adopt the following commitments prior to starting the company:

1. God is the Owner. We are stewards with no claims of ownership.

2. Money is dangerous. There is a human tendency to be greedy, to serve money, to hoard, to claim rights to earthly possessions. To counteract these pitfalls, we committed to a limited lifestyle and to see company profits as the property of God’s Kingdom.

3. Shared stewardship—we engaged believers in our company to hold us accountable and to join us in the process of distributing company profits.

Initially the ownership commitment was not legally binding; however, in 2008 we embraced a legal structure that allowed us to transfer 99% of the ownership interest in the company to a charitable trust and the remaining 1% (with all voting rights) to a Voting Trust that is also owned by a charitable organization but is controlled by a Board of Trustees. This structure has provided the following benefits:

1. A permanent ownership structure less subject to a lifespan or individual human frailties.

2. A vehicle for succession of the stewardship of the company without taxes or the dangerous transfer of wealth to a person. This has reduced our anxiety about succession planning.

3. A substantially reduced tax burden.

4. A Kingdom purpose that is permanent and clear to all current and future stewards.

Our Owner has allowed us to experience freedom and joy as we have endeavored to be faithful stewards for the last 34 years. People have heard our story and some have desired to structure their companies in a similar way. We have joined together with a few of these people to form the Kingdom Companies Group. The following describes each KCG company:

Expectations

• Owned by a charitable trust

• Controlled by a Board of Trustees

• Limited salary with incentives

• Profit invested in Kingdom charities—35%+

Elements

• Profitable and growing

• Long-term focus (as opposed to prepping for a sale)

• People development

• Healthy culture

• Local care teams

• GROVE Invitation—GROVE is the team that develops the Kingdom investment strategies (charitable giving)

• Quality compensation/benefits

Benefits for participants

• Succession plan including emergency response plan

• Board of Trustees to prevent mission drift

• Accountability and counsel from the KCG Council

• Shared talent

• Capital

• Reduced taxes—<8% federal (current tax law)

• Possible shared services (back office, legal, etc.)

• Decision-making process for Kingdom investments—GROVE

• Eternal Rewards

Kingdom Companies Group Structure

The charitable trusts that hold the primary ownership (99%) of each entity do not provide oversight. They hold the stock and if a company is sold, they will receive the proceeds. Those proceeds cannot go back to the original owner or to any individual. They are charitable funds and the trusts exist to channel funds to ministries. The GROVE group or a similar designee can provide “advice” as to the ministries to be funded and the advice will be followed in most cases.

The voting rights for each entity reside in a Voting Trust. The Voting Trust is controlled by a Board of Trustees. The Board of Trustees:

• Represent the owner

• Monitor progress and results

• Install and remove the Board of Directors

• Approve compensation plans

• Guard the mission

• Provide guidance

• Confirm the appointment of each CEO

Each company has a Board of Directors that appoint the CEO and oversee and approve corporate activities. Each company also has a Senior Leadership Team with following functions:

• Run the business units

• Define and implement strategy

• Develop a talent pool

• Ensure ministry to and through team members

Kingdom Companies Council

In addition to common control through the Board of Trustees, the companies are connected through a group we call the KCG Council, which is not a legal entity but more of a roundtable. It is made up of CEOs of each major company plus a few at-large positions. The Council provides informal accountability and guidance. We meet quarterly and topics include:

• Acquisitions

• Culture

• Strategy/implementation/annual plan

• Ministry/care teams

• Current challenges

A role of the Council is to facilitate talent and resource development and allocation. Several key team members have moved temporarily or permanently from one company in the group to another. While legally we are completely separate companies, we are in essence under common ownership in that God is the ultimate Owner of each company.  

Disclaimer: The Kingdom Companies Group is in its early stages. We have been operating a “Kingdom-owned” company for 12 years but only added the second company in January of 2019. Two additional companies joined in late 2019. This is all very new. We have already experienced some struggles as one of the companies that joined had substantial challenges. We are not currently recruiting other companies to join our KCG. All current companies are in a similar industry (industrial contracting). As we get our systems in place and work out the kinks, we may expand and broaden. More likely, we will encourage others to form their own groups around sectors, geographies and/or relationships.

The thought of “giving away” your company seems absurd to most owners. We see it differently. Everything we have has come from God; we have a temporary stewardship whether we acknowledge that or not. Jesus warned us many times about the dangers of wealth and power. As John 10:10 says, our enemy can and will use earthly wealth and power to kill, steal and destroy. Jesus came to set us free and give us abundant life. Luke 12 and I Timothy 6 and many other passages contain dire warnings. Christians are not immune from the danger, especially successful businesspeople. In an effort to thwart the enemy and maximize our contribution to the body of Christ, we should heed the warnings and take preventative measures—for our sake and for those who will come after us.  

I rewatched the Lord of the Rings movies recently and was struck by two concepts. The powerful hold that power (and by extension wealth) can have on us (the Ring) and the benefit of having others on our journey. Frodo could not have done it without Sam and the Company. Relinquishing control can be brutally difficult. Bilbo struggled. It cost Frodo his finger. A band of brothers and sisters can make a huge difference; accountability is a valuable asset. The Kingdom Companies Group provides accountability and access to the wisdom of fellow stewards 

I am not recruiting you into the KCG but I would encourage you consider an ownership structure for your company or assets that addresses the danger of wealth and power and to do so with others who are on a similar journey.  

Article originally posted here by Stanford Social

Addressing the Permanent Crisis With Pay for Success Programs

by Stanford Social

Governments have an opportunity to partner with impact investors and philanthropists to turn emergency spending into long-term impact.

Federal, state, and local governments are spending trillions of dollars to combat the new coronavirus pandemic. But as government agencies and officials work urgently to respond to this crisis of unprecedented scope, they also have an extraordinary opportunity to ensure that programs born of an emergency can achieve measurable outcomes that strengthen our social infrastructure for decades to come.

This is true for philanthropy and impact investors, too. Many donors and foundations are reacting generously to provide aid to those most affected by this crisis. Some impact investors, for example, are providing zero percent bridge loans to nonprofits, and some corporate philanthropies are supporting small businesses. These funders have an opportunity to think beyond immediate challenges and give policymakers the support needed to achieve long-term impact.

Following Machiavelli’s oft-repeated advice—never to waste the opportunity offered by a crisis—we urge leaders from across sectors to consider opportunities to transform short-term emergency efforts into sustainable systems change.

Read the full article here!

by Jonathan T.M. Reckford

Every day, I see how rising housing costs are making it increasingly difficult for hard-working families to make ends meet. For decades, home prices have been outpacing household incomes, and we are now seeing a whole generation being locked out of the promise of homeownership. Spiraling housing prices have also left millions of families struggling to keep a roof over their heads while affording basic necessities, such as food and medicine.

In the U.S., home costs make up one-third of the consumer price index — the most widely-followed inflation gauge. Before the pandemic even began, 1 in 7 U.S. households were spending half or more of their income on housing. Inflation is eroding families’ ability to save, pushing many homeowners and renters to the brink of eviction and foreclosure — and locking potential new homebuyers out of the market. 

We have been underbuilding for a decade. Estimates are that we are between 3 and 6 million units short of what is needed in this country. The remedy will require us to continue providing subsidies — like down-payment assistance. However, if we do that and don’t address the supply issue, we will make the problem worse.

The situation is similar to what has happened with college tuition. By offering students financial aid without creating more seats in classrooms, we have created fierce competition for few too opportunities. Therefore, students still come out of college with massive debts. 

I recently spoke to a gathering of Habitat for Humanity organizations and pointed out that housing costs in markets that were once considered affordable put home buying out of reach for many. Dallas was one of those markets. The executive director of our affiliate there told me that in just the three weeks following the conference, the situation had gotten dramatically worse. Habitat homes are appraising for 40% more than just two years ago, and incomes have only increased slightly.

Throughout the country, the rising costs of land and labor, COVID supply-chain challenges, and regulatory requirements are making it very expensive to build homes. In addition, private investors purchasing homes for rental have further narrowed supply. And there is no magic bullet.

We can’t rein in housing inflation until we correct the systemic housing shortage, particularly our under-supply of decent and affordable homes. The lack of modest, starter houses is affecting every major region of the country and is having an outsized impact on marginalized communities in particular.

The roots of racial inequity in housing run long and deep, bolstered by a web of government policies and private actions that mutually reinforced the exclusion of people of color from homeownership. In 1910, Baltimore, Maryland, enacted the first formal local ordinances that created all-Black and all-white street blocks in response to the growing Black migration from the South. These ordinances spread across the U.S. until the Supreme Court outlawed the practice in 1917. 

In Euclid v. Ambler in 1926, the U.S. Supreme Court affirmed the practice of exclusionary zoning, which focused on the creation of economic zoning policies. Because many Black families could not afford to buy around the expensive housing restrictions, such “race-neutral” economic zoning policies had a racially discriminatory effect.

Then, in the 1930s, the Federal Housing Administration refused to guarantee mortgages for homes in communities where households of color lived or in those communities redlined in the color-coded maps developed by the federal Home Owners’ Loan Corporation. The maps redlined neighborhoods occupied predominantly by households of color or those situated close to unhealthy environmental hazards (i.e., “smoke, odors, and fog”) and deemed them financially risky for lending. Private lenders followed their lead and refused to extend mortgages to Black potential homebuyers.

On the local level, many homeowners and local communities adopted racially-restrictive covenants that forbade any buyer from reselling a home to Black buyers. Though struck down as illegal in 1948, the policies remained on the books of many communities for decades.

Homeownership is one of the primary ways that families build wealth, but today, we’re still seeing a huge number of families of color being shut out of the chance to become homeowners. Only 44% of Black families own their homes compared to 73.7% of white families. The wealth gap in the U.S. can very often be traced to housing issues.

So, what are followers of Jesus called to do about societal challenges like affordable housing and racial equity?

Seek Wisdom

Let’s start with what Scripture tells us about wisdom. James 3:17-18 says “But the wisdom that comes from heaven is first of all pure; then peace-loving, considerate, submissive, full of mercy and good fruit, impartial and sincere.  Peacemakers who sow in peace reap a harvest of righteousness.”

Nothing about plotting to exclude, working around the law, or demeaning others fits at all with these descriptions. Many reasons exist for why God’s people have allowed housing to become such a divisive tool. 

• It’s hard to fight years of injustice and layers of policy.

• Until the summer of 2020, many people had no idea that practices such as redlining were commonplace in some communities.

• Often people are fearful that in making life better for others, they will lose something they hold dear.

For Christians, providing hospitality and shelter opportunities are at the heart of what it means to love our neighbors. And Jesus was clear that our neighbors are those in need. One of our mission principles at Habitat is that no one lives in dignity until everyone lives in dignity. We believe that is what a just and good society would look like. 

Walking alongside the poor is the central economic concept in the Bible; therefore, followers of Jesus are called to share their resources, to be good stewards, and to trust in God’s provision.

Be Bold

People of faith have a responsibility both to provide hope and to take action on behalf of those who struggle in desperate circumstances. And the Church can act on many levels.

The first concerns local influence. We must lead the way to battle NIMBY attitudes (not in my backyard) or BANANA proclamations (build absolutely nothing anywhere near anything). Walls go up really fast in communities of opportunity when we talk about building more affordable housing. But if we have done the work to build relationships, to foster trust, and to promote attitudes of authentic community, it becomes much easier to convince people to move to “yes in my backyard.” 

The best model in which all of us can flourish is to create mixed-income, mixed-use communities where people can live close to the places they work. It’s better for the environment, and it’s better for social mobility and opportunity. But, in the last 50 or 60 years, we’ve moved in the opposite direction in the way we have organized our cities. There’s an urgency to figure this out.

Zoning continues to be a barrier for creating more housing opportunities. Churches and other community groups can advocate for land-use policies that increase affordable homeownership development opportunities.

One of the things that first attracted me to Habitat was the fact that we are not against things; we are for opportunities to help all people build a better life. The way we do our work is as important as what we do. Our mission is housing, and joining together to raise the walls of a home builds bridges and creates community.

“As the physical walls of the home go up, the invisible walls that separate us as people come tumbling down, and new hope is built in the heart of the community.”

–Archbishop Desmond Tutu

Be Generous

One of the giant impediments to building more housing is finding land to build on, so there’s a possibility of actually creating social enterprise and helping create housing opportunities. Many churches have land that could be dedicated to creating sites for housing.

For example, after years of discernment, in 2018, the affordable housing task force at Longview Presbyterian Church in Longview, Washington, connected with the local housing organization and began working on a plan for developing two acres of land adjacent to the church property. With unanimous approval from the Olympia Presbytery, the congregation decided to provide space for 48 affordable housing units, about half of which would be reserved for people transitioning from homelessness.

Across the country near Washington, D.C., the congregation of Arlington Presbyterian Church had dwindled from 1,000 members strong in the 1950s to only about 60 parishioners in recent years. After talking with neighbors about what they needed most, church members decided to tear down their building and sell the land to make way for 173 units of low-income housing and ground-floor retail space.

Local congregations can also be conveners, bringing together community residents, business and government leaders, and nonprofit groups to design plans for thriving communities that are welcoming for all.

Earlier, I mentioned the power of the Church to influence local opinions about issues such as zoning. Churches also have a powerful voice that can help raise awareness on a wider level concerning the need for adequate and affordable housing. By formally recognizing housing as a human right, the Church, as a credible institution, can marshal others to action. Clear appeals from the faith sector can influence policy changes that would help low-income families access housing and the financing for housing.  Churches can also hold their parishioners, their communities, and their lawmakers at every level accountable for offering compassionate support to those struggling in unthinkable living conditions.

Solutions won’t be easy, but the timing is perfect. The COVID-19 crisis has revealed and exacerbated the suffering of many who were already living in desperate situations. Recently, Habitat organized our advocacy conference during which we met with more than 400 members of Congress. I was really struck that the urgency of the housing crisis finally was starting to resonate. Habitat, as housing practitioners, and we, as the Church, have the attention of the nation. We cannot afford to be complacent.

Pray

We ask God for open minds and open hearts. We pray for the desire to serve our neighbors in the ways that best meet their needs and for strength to stand up for the things we know are right. Keeping our thoughts fixed on God’s purposes enables us to be creative and to be committed. So, we will ask for wisdom, boldness, and generous hearts as we seek to be faithful followers of Jesus.

Article originally hosted and shared with permission by The Christian Economic Forum, a global network of leaders who join together to collaborate and introduce strategic ideas for the spread of God’s economic principles and the goodness of Jesus Christ. This article was from a collection of White Papers compiled for attendees of the CEF’s Global Event.

by Ambassadors Impact Network

At Ambassadors Impact Network (AIN), we are inspired by entrepreneurs whose desire is to show and share Jesus through their business. These individuals’ unique ability to integrate the demands of operating a company while winsomely advancing the gospel is instructive to our personal and professional lives, and we hope it might be for you as well. That is the motivation for this Spiritual Impact Practices  Report. 

Since 2018, AIN has sought to fund and encourage founders and management teams who demonstrate and proclaim the gospel of Jesus Christ. Recognizing their varied spiritual giftings, passions, and contexts, we do not mandate an approach for gospel advancement. Instead, we ask entrepreneurs to share how they seek to make Jesus known across three areas of their business: their codified values, their business activities, and their products and/or services. 

After reviewing nearly 400 requests for funding and investing $7 million across 19  different companies and funds, we began to see patterns emerge as to how God was working through these businesses. We also received requests from entrepreneurs for best practices and ideas on how to invite others to know Jesus through enterprise. So we asked each of our portfolio companies to answer the following  questions about their organization’s values, activities, and products or services: 

1. How do you incorporate biblical truth into the values of your company?

2. What activities do you undertake, internally or externally, that enable you to demonstrate or proclaim the gospel? 

3. In what ways does your product or service demonstrate or proclaim the gospel,  make disciples, or otherwise expand the kingdom of God? 

What follows are the answers to these questions, lightly sanitized to protect the identity of the companies and entrepreneurs. Within each of the three areas noted above, we have further broken down the responses into eight topical categories to make them easier to digest and better enable you to find the practices that fit your context and passion. Our invitation is for you to explore and discern if God might be inviting you to implement some of these practices in your personal or professional life. 

[ Photo by Toa Heftiba on Unsplash ]

by Christophe Dessaigne

If one were to do any type of internet search for the meaning of investing, the most common definitions found center around the following:

• expending money with the expectation of achieving a profit or material result by putting it into financial plans, shares, or property or by using it to develop a commercial venture.

Page after page holds a definition that has profit and material result as its main tenet. Yet, as with most things in life, if you dig a little deeper, you’ll find another definition:

• devoting one’s time, effort, or energy to a particular undertaking with the expectation of a worthwhile result.

For nearly 5 years, I lived and breathed the first definition of investing in my various roles at a private equity firm. I spent hours analyzing financial statements, conducting due diligence, attending community events 2-3 nights per week, and meeting with investors. I was, if you will, fully invested in my work, sometimes to the detriment of my health and, more often than I care to admit, to the detriment of my family. In the summer of 2019, I decided it was time to take an intentional pause. I needed to regroup, re-strategize, restore, and recalibrate. But I fully expected that, after some time of rest and a quieted spirit, God would lead me to my next exciting role in the impact investment world. And He did…though not at all via the path I would have chosen nor to a role I would have ever dreamt of.

Shortly after announcing my resignation, I was met with the news that cancer had reared its ugly head again for my father and my father-in-law, this time with a prognosis that did not bode well for either. My desire for an intentional pause found itself facing off against circumstances that belied the rest I craved. Yet, this pause found itself a victor, for it had bestowed upon me the gift of time to invest in being a stem cell donor for my father in a last valiant attempt to save his life. As my father’s health improved, and as I began seeing the rewards of a life that was not so laser-focused on work, I decided to do some freelance consulting work and created an LLC. Little did I know that one week later, the great COVID shut-down would occur. My three young children (7, 8, and 9 years old at the time) were suddenly home. And so was I. Our school district had no online infrastructure to deal with the sudden closure, and my fledgling week-old consultancy did not yet have enough clients to fill a full work week. So, I took on a new title— “Mr. D.”

I was now officially a homeschool teacher, untrained in the art of primary education, with no relevant degrees to suggest I might be able to carry out this new assignment. I filled my time printing out math worksheets and creating fun school projects for our children, all the while trying to build a business in the remaining pockets of time. I didn’t know it at the time, but this was the beginning of my deep dive into a new way of investing. In my mind, I’m not even sure I viewed it as an investment initially. Rather, it was both a risky stop gap and a circumstantial necessity, not a decision based on careful analysis and due diligence. Nonetheless, the investment seed had been planted and had started to grow.

The first signs of this growth revealed themselves in my relationship with my father who, by the time COVID had shut international travel down, was quickly declining, his body no longer able to accept my stem cells. While I thought my intentional pause was for my own restoration, God revealed it to be a gift of time that I could devote to investing hours in talking, worshipping, and praying with my father before he went to his Father on May 13, 2020.

The second signs of the growth of my investment came by way of my relationship with my children. Whereas I had previously been able to spend an hour or two each evening with my kids, I suddenly found myself spending 5-6 hoursper day with them. My wife and I longed for our children to grow up with strong Biblical literacy and a passion for God, but it often felt challenging to squeeze this into our busy lives. Now, with my new role, I was able to spend every morning in Bible study, worshipping and reading about great heroes of our faith. And while I taught them their math equations, I learned an important equation of my own:

Time + Devotion = Invested Relationship

As I continued to invest time in relationships, a new business investment opportunity presented itself, with a goal to give people back time in their lives. Over the course of a 75-year lifespan, the average American will spend 175-200 days grocery shopping. But he/she will spend less and less time at the dinner table together with his/her family. This new business aims to disrupt the current grocery shopping experience by providing an essential online grocery store through which every order is ready in 10 minutes. Our hope is that this disruption adds hours to individual’s and families’ lives so that they can further invest in their relationships.

There are two Proverbs that stand out to me when I consider the two definitions of investing:

“Whoever works his land will have plenty of bread, but he who follows worthless pursuits lacks sense.” (Proverbs 12:11)

God calls us to work—and to work our land. Therefore, keep investing in solutions to solve some of the world’s greatest problems. Keep investing in worthwhile pursuits in your businesses to “create plenty” and thus impact our world.

Train up a child in the way he should go; and when he is old, he will not depart from it. (Proverbs 22:6)

When a runner trains for a marathon, it is not a one-time effort. It is a devotion of effort and energy on a daily basis. So it is with training our children, and I have seen firsthand the results of regular investment in them. And though Proverbs are not promises, we can enter into this investment with the expectation of the worthwhile result that our children will not leave this path.

We are called to invest in our work and in our relationships. Let us do so with diligence!

Article originally hosted and shared with permission by The Christian Economic Forum, a global network of leaders who join together to collaborate and introduce strategic ideas for the spread of God’s economic principles and the goodness of Jesus Christ. This article was from a collection of White Papers compiled for attendees of the CEF’s Global Event.

by Sound Financial & WealthShield

Are you a 5 Talent guy/gal or will your Ox get stoned? Weird question, huh? 

Consider that God is so serious about our investments that Jesus complimented those that doubled their money. And He is equally as serious about the quality of our assets, that if they hurt people those should be destroyed, i.e. the Ox gets stoned to death. Jesus once told His disciples to be street-wise as snakes and yet innocent as doves. He gives us no wiggle room in between. He expects wisdom, creativity, and growth. We should not hide our money in the name of safety. And He expects innocence, we cannot present Him profits earned from activities that harmed people or the environment. Therefore, we should invest shrewdly, reach for great returns, and do good work in the process.* 

The issue at hand is: can we invest in stocks of good companies that do not harm people and still capture investment results competing with common indexes? Our friends at WealthShield built a stock index demonstrating the possibility of returns to answer this question. 

Given the data, we believe the answer is yes. 

In our research we compared this Biblically Responsible Strategy to the S&P 500 Total Return Index. This is a hypothetical scenario meant to demonstrate the possibilities of investments like these. We wanted to be as accurate as possible in our testing, therefore we included both wealth and asset management fees, attempting to demonstrate as complete of an investment picture as possible. In short these are the results; for every $100 invested in the Index upon its first historical data point (April 7th, 2000), a hypothetical investor would have $328.17 in total return on April 7, 2020, this is after advisory and asset management fees were paid. This is an annualized return of 6.12%. This compares to only $251.77 in the S&P 500 total return over that same timeframe which is an annualized return of 4.73%. We believe this answers the question, can we invest in Biblically responsible companies and earn a greater return? Yes, we believe the data demonstrates that this Index has the potential to compete with and even exceed the S&P 500 Total Return. And as Believers, we believe this helps us in our quest to invest in companies that do good work, while not harming people or the environment which is exactly what God’s word instructs us to do.

This is a link to the full article demonstrating this Index: FAITH-BASED INVESTING INDEX

—

(1)  The BRI Strategy Total Return Index is hypothetical in the back tested years (April 7, 2000- April 7, 2020). Hypothetical performance results are intended for informational purposes only to show historical performance had the model portfolios been used over the relevant period of time without any limitations or restrictions. There is no guarantee that the hypothetical results can be replicated. Hypothetical performance is presented net of Sound’s anticipated management fee of 1.44% per year from the inception date listed to present and includes the reinvestment of all income. Actual performance results will vary from this example.

(2)  Matthew 25: 19-23

(3)  Exodus 21: 28-29

(4)  Matthew 25: 24-28

(5)  Proverbs 16:8

(6) *The views and opinions of scripture are the views and opinions of the author based on his interpretation of the cited biblical passages.  

(7) https://www.soundfsg.com/uploads/docs/BRI-Index-Paper_v3.pdf