This article was originally published here by Christianity Today.

by Mary Naber King

“Among themselves the merchants have a common rule which is their chief maxim … I care nothing about my neighbor; so long as I have my profit and satisfy my greed, of what concern is it to me if it injures my neighbor in 10 ways at once? There you see how shamelessly this maxim flies squarely in the face not only of Christian love but also of natural law.”

—Martin Luther, 1524

Some 250 years after Martin Luther suggested that we are not only justified by faith but that it should permeate all areas of our lives, including enterprise, a young man in Mount Holly, New Jersey, opened a humble tailor shop.

Unlike other businessmen, John Woolman refused to purchase any cotton or dye supplies handled by slaves. His commitment to Christian love—with excellence, mind you—attracted customers in droves, despite occasions when he could only offer them beige sackcloth.

In 1759 Woolman convinced the Philadelphia Quakers to pass the first resolution in the American Colonies not to own, deal, or sell slaves. Why use God’s blessings, he reasoned, to buy people captive to chains for personal profit?

Another two and a half centuries passed: summer 1997. My internship as a consultant in Santa Clara, California, had ended, and I picked up my last paycheck. How did I begin to employ the talents my Master entrusted to me? Well, I invested a portion of them just like everybody else—in a top-performing mutual fund mentioned in Money magazine. Highest return? Sign me up!

I cheerfully chanted the popular market mantra—one criterion, one conclusion—only recently pausing to ask: “What is a stock, anyway?”

Besides a fancy certificate or electronic symbol on ticker tape, a stock represents ownership shares in a corporation. You might be the sole proprietor of …

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This article was originally published here by Biola University’s Crowell Business School blog.
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by Steve Rundle

There is a lot of excitement nowadays about businesses that have multiple “bottom lines.” Whether one calls it “Social Entrepreneurship” (SE) or “Business as Mission” (BAM), the idea that businesses can be financially successful while also addressing social problems (and spiritual needs, in the case of BAM) is a popular one. But is it true? What evidence do we have that confirms that it’s possible for a business to consistently and simultaneously achieve such diverse goals?

Most evidence to date is anecdotal, or in the form of case studies. Having written a few case studies myself, I know they can be interesting and helpful. But cases are idiosyncratic, often difficult to replicate, and not well suited for identifying generalizable best practices. Some scholars complain that many cases tend toward promoting “hero worship” rather than critical reflection.

In an effort to approach this question more dispassionately, I recently conducted an anonymous survey of 119 “Business as Mission” practitioners from around the world. Among other factors, the survey looked specifically at the source of their salary (does it come from the revenues of the business or from donors?) and the outcomes of the business in terms of the four “bottom lines” of economic, social, environmental and spiritual impact. The reason one’s source of salary is interesting is because many people in the ministry/missions world believe that donor support helps ensure that practitioners stay focused on the ministry goals.

This study essentially found the exact opposite. It found that practitioners who are fully supported by the business tend to out-perform – sometimes significantly – donor-supported BAM practitioners, and are no less fruitful in terms of spiritual impact. This finding holds up even after controlling for things like geography, firm size, and firm type.

For those who would like to learn more, the findings were presented at the Global BAM Think Tank that was held in April 2013 in Chiang Mai, Thailand. The 23 ½ minute presentation was videotaped, and is embedded below. The PowerPoint slides used in that presentation are available here. In addition, the International Bulletin of Missionary Research has published the study in January 2014 under the title “Does Donor Support Help or Hinder BAM Practitioners: An Empirical Assessment.”

The moral of the story is that economic incentives matter. Contrary to the mission community’s concern that self-support will take one’s attention away from the ministry goals, the truth is that only by creating a successful business can a practitioner hope to have a meaningful and holistic impact on a community.

Watch Steve Rundle’s presentation, Maximizing the Impact of BAM, below!

This article was originally published here.

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by Steve Graves

What’s worth saying yes to? Every foundation and every venture capital firm have to answer this question on a perpetual basis. So do many people this time of the year facing requests for year-end giving show up in the mailbox or the inbox.

I’ve been asking and answering this question for years. But in the last 3-4 years, I have become clearer than ever where I want to say yes, particularly when it comes to investing.

Over the years, I’ve co-owned several different companies. They all started with me saying yes to some proposition from someone. Figuring out which company to take a chance on isn’t always easy. But having a filter or grid has made the task easier for me. It keeps the yes decision away from impulsive, emotional tugs, or friend pressure.

Unless you are Oprah or Ellen and have a bank of marketing dollars fueling your yes (“You get a car! You get a car! You get a car! Everybody gets a car!”), we need some filter guiding our investment decisions.

I’ve settled on a fourfold filter to guide my personal investment opportunities. I would not dare presume these will fit you, but wanted to share them after a number of you have asked. Here they are:

1. Is it profitable?

2. Is it scalable?

3. Is it redemptive?

4. Is it healthy?

Now let me be clear. I either need a yes to each question or a clear line of sight on how we are getting to yes for that question. Perhaps my involvement can help get it there – I get that. In other words, your motivation to invest in a company might be so you can make it profitable or healthy. That’s fair. But make sure you have a line of sight on it.

Is It Profitable?

There are times to give money away, no strings attached, but if I’m investing, I’m not trying to give money away. My investment is a means to increase some income eventually.

I’m not alone in this as investors increasingly realize that, contrary to popular wisdom, profitability is more important than growth to last for the long haul.

So I ask hard questions of the companies I am considering investing in. I ask for profit goals, and then dig in to determine whether those profit goals are reasonable or “assuming everything breaks right” goals. I ask about the framework that they have to drive profits and measure results. I’ve run into tons of businesses that can’t miss ideas. Still, they don’t have the back end production plan or distribution plan or employee accountability plan to measure progress and deliver in the long term.

Is It Scalable?

One of the businesses I co-owned faced a crossroads. We had a dynamic leader, but he couldn’t be in all places at once, so we were limited in our growth. He felt the tension, too, and after a long season of considering the options, we made some strategic moves to scale nationally, which meant shifting roles and taking on some additional risk. It hasn’t come without sacrifice, but I will say it’s got a pretty exciting trajectory.

Why is this one of my filters? I understand that not every company is supposed to be scaling right now. But at my age, I don’t have 35 years for a couple of founders to do a bunch of pivots and figure things out. I love the growth that extends our reach, stretches our organizational muscles, and gives us a chance for a timely exit event. So, I need to see the pathway to scale and see it sooner rather than later.

Is It Redemptive?

This question may be a bit unique to me because of the role my faith plays in my life and work.  I want the companies I invest in to have some redemptive edges.

That’s not to say that I expect it always to look the same, but I make sure that company leaders are intentionally asking the question of what makes their enterprise redemptive.

Is it the faith of leadership? Is it the kind of product or service they offer? Is it what they intend to do with their profits? Is it how they treat their employees or customers? Is it the company’s mission and vision? Is it the overt or covert culture of faith?

Do not misunderstand this filter. No two companies look entirely the same regarding this question. There are half a dozen variables that create your unique faith impression. But the companies I invest in must be wrestling with finding their redemptive edges.

Is It Healthy?

When young children are sick, you can tell pretty quickly (whether they voice it or not), and young organizations are no different. For that matter, any age organization can be sick versus healthy. When I consider investing in a company, I’m looking at whether it has a healthy culture and work pace. I’m looking at relationships within the company and specifically between key leaders. I’m looking at whether it is a place of high performance. All of those factors are indicators of health to me.

Patrick Lencioni, in his book, The Advantage: Why Organizational Health Trumps Everything in Business, puts it this way: “An organization has integrity—is healthy—when it is whole, consistent and complete, that is, when its management, operations, strategy, and culture fit together and make sense.”

Conclusion

Again, I don’t expect that a company has figured out everything connected to the four filters. In some ways, if they had, I probably would be coming in too late. But I need to know where they are with these four filters and how they are thinking about them. Your questions may be different than mine, but every investor needs a grid to put opportunities through.

Mine’s just four questions: Is it profitable, is it scalable, is it redemptive, and is it healthy?

This article was originally published here.
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by Mary Tomlinson

There are so many needs in the world and so many requests that tug at my heart. On the surface, they all seem to be the “right” thing to do. But they can also be overwhelming, bringing on what feels like a lose–lose scenario: If I give, I feel pressured and off purpose, but if I don’t give, I feel badly. How much will really make a difference? Will my husband Bill and I be on the same page? How can I say no without feeling terrible?

The ongoing dread and uncertainty when giving requests came my way indicated my “joyful heart in giving” was waning.

We are not alone in this struggle. During the time I worked at Disney, the company was constantly bombarded by giving requests. As a result, they initiated a process to determine how much they were giving collectively and to whom. Then they developed a strategy for what types of organizations they should give to in order to make a significant difference. Ultimately and not surprisingly, they determined that children’s charities were their number one priority. Suddenly it was easier to say no when necessary and to give more to a fewer group of organizations to make a bigger impact.

Read more about how Mary and Bill used this model to prioritize which needs and causes they would give to.

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“How can I deepen my relationships with existing clients while also differentiating my offering to appeal to prospects?”

“How do I help my clients practice good stewardship by maximizing financial performance while also seeking to make a positive difference with their investments?” 

“I’m a Christian financial advisor, but I’m not sure what the Bible has to say about investing.”

Financial advisors struggle to keep up with the latest trends, grow their network of clients, and integrate their faith with their work. Balancing clients goals, a competitive return, and Christian principles of investing often feels like a juggling act.

We understand the weight of wanting to make a positive impact for your clients and the uncertainty of knowing where to start.

“Faith-Based Investing: A Guide for Financial Advisors” is a free e-book from Denver Institute for Faith & Work. Through practical guidance and a philosophical approach to investing, advisors can learn the best practices to achieve their client’s goals and the common good.

“Faith-Based Investing: A Guide for Financial Advisors” is created in partnership with Christian Investment Forum. Complete the form at the bottom of this page to receive your free copy!