Family offices are bracing for big changes driven by millennials. In 2017, nearly one in three family offices were engaged in sustainable and impact investing, with nearly half of them planning to increase those investments in the next year.

With nearly two-thirds of next-generation heirs expected to take over within the next 10-15 years, family offices are starting to tailor their investments based on their preferences. Family offices are private offices that manage the wealth of ultra-high-net-worth investors.

According to UBS and Campden’s annual survey on family offices, the next generation will raise their investments in impact and sustainable investing.

“39 percent of respondents projected that when the next generation takes on control of their families’ wealth, they will increase their allocation to impact and environmental, social and governance (ESG) investing,” the report said.

Read the full story at Business Insider

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This article was originally presented at The Christian Economic Forum 2019.
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The Christian Economic Forum hosts a world-class Global Event each year to connect the top industry leaders and experts from around the world with other individuals who are compelled to act upon the principles of God’s economy. The following paper was presented at CEF 2019.

by Carmen Yuen

I had invested in an early childhood business that operated on a close-knit ecosystem. The accountant, auditor, uniform and food suppliers, lawyer, trainers, and bus drivers were friends of the founders and met regularly at the religious place of worship for weekly prayers.

This impression stuck with me as I sought to find marketplace Faith Giants to ascertain how they deliberately collaborate with each other. Who are the Faith Giants and how are they partnering other Christian businessmen? How do they live out their faith in the marketplace? Who can best influence them to live out Jesus in the marketplace? 

Being in the Venture Capital (VC) business, I have the privilege of interacting with founders and hearing their visions and dreams to transform industries. For those who are of the faith, Christian Founders (CF), how can we, as investors and fellow believers, help them integrate faith with business? How can we encourage CF businesses to partner with each other deliberately? The end in mind is for CF to know God owns their businesses and thus they should be multipliers of God’s blessings. [LS1] For the rest of us, we must acknowledge God owns everything we have. In response to this knowledge, we should deliberately offer our God-given resources (money, network, talent, time) to invest into the lives of CF and their businesses.

I shall attempt to share perspectives from different players in this ecosystem: CF, VCs, Investors and business partners.

As a VC Fund Manager

If I were managing a Fund, and I believed God owns my business and allows me “in a time like this” to be a VC, then as a fund manager, my business purpose should be “to make disciples” of CF. As a steward of my investors’ (Limited Partners or LP) monies, I will need to generate financial returns, thus the CF businesses have to be game changing and innovative. They also must glorify God.

 As a VC, I walk with CF on their growth journey from startup stage. During this period CF will have fewer investors to account to, hence conversations can be personal. Stress is often high as CF have to prove business traction with limited cash resources. This is a time when CF will need to pray for God’s mercies in stretching the limited funds and in bringing favor on the business transactions. It is therefore the best time to instill in CF that God is their ever-present companion.

At other times as CF grow their business, they may encounter “grey zones” that challenge their faith values. By relying on biblical wisdom, a Christian VC must remind CF to take the path that pleases God. This can involve turning away business opportunities that could yield them chunky revenue. Ultimately, CF must know that God honors those who honor Him (1 Sam. 2:30).

I had witnessed God working (and is still working) in several of my portfolio companies, despite being in a secular venture capital fund. One startup experienced a prolonged fundraising drought even though the business was growing, and this caused strain in the cash position of the company. Even as we prayed and waited on God, we continued speaking with investors, and God showed up! We raised the funds needed after ten months, and the CF shared that despite the twists and turns in the funding process, he sensed God’s hands guiding him with business wins to generate cash to make payments. God was in his business!

Another CF going through similar funding experience commented that “the company experienced the miracle of five loaves and two fish”—God was faithful in granting the company an additional eight weeks of cashflow. We continue to pray and wait with great excitement to see how our creative God is going to work with him and the business.

Some CF, however, were less comfortable when God was brought into the conversation. We may have a ways to go to integrate faith with work, before the CF acknowledge God owns the business. There is much that a Christian VC has to do: praying for CF and bringing God into the conversation before embarking on the discipleship journey where CF will acknowledge God’s ownership of their businesses.

As Fellow Christian Business Founder/ Owner

Even the best startups encounter an (MT)2 challenge: Money, Market, Talent, and Technology. CF-founded startups are no different. Even when Money, Talent, and Technology are present, market access and scaling up is tough as prospects doubt the sustainability of these startups and prefer not to be inconvenienced should they fail.

On the other hand, mature businesses know innovation is eating their lunch; yet the leaders are uncertain how to approach innovation. In Southeast Asia we saw corporate incubators and accelerators being formed, where startups were nurtured by business units within these large corporations. While this is commendable, it is not an exercise Christian businesses will naturally adopt, given that such innovation commitment may not gel with the core business. How can Mature Christian Businesses (MCB) interact with CF startups and indirectly, allow CF to stand on the shoulders of giants by granting them market access into the MCB network?

This is where service providers (brokers, incubators, angel investors, VCs) can jointly provide a platform where MCBs surface issues for which they are seeking solutions; and CF can submit proposals in response. Dedicated Business Development platforms can be established to market CF businesses to MCB. What seems to be in the market now is merely listing sites that do not add significant value.

While such a Business Development platform can take a while to become mainstream, what MCB need to do is to demonstrate their conviction to work with CF startups, and translate this same conviction and commitment to their teams. To define a challenge statement, MCB will also have to look honestly at their businesses and define where they could be disrupted by startups.

When CF pitch, MCB owners have to own the process by taking an interest to sit in on these pitching or sharing sessions. This will signal to the rest of the business that the partnership with CF startups is serious. If MCB owners acknowledge God owns their business, they would be more receptive to partnering and procuring from CF startups, even though this may inconvenience their existing administrative process.

Why is it important to be deliberate in partnering/procuring from CF startups? A Christian businessman once asked me, “If you have $20 to donate, how would you split the donation between Christian and secular charities?” His observation was that if believers do not support Christian charities, why would non-Christians donate to Christian causes? It will be embarrassing if secular businesses were more proactive to do good and help CF startups while MCB owners disregard them. How would we respond to Matthew 25:34–40?

Then there is the question on how much of procurement should be channeled to CF startups. MCB can borrow from the efforts of various governments. For example, in 2016 the Singapore Government awarded more than 80% of contracts to SMEs. Assuming MCB have procured from CF startups, they will also need to be prompt paymasters.

Grab (on demand car hailing decacorn in Southeast Asia) stepped into the (MT)2 role by providing startups access to Grab’s expansive network: talent, expert, and market access. These startups (several by CF) have the unfair advantage of localizing their business and revenue models across the region, thus becoming successful businesses. What motivated Grab to start this was that they had benefited from helpful MCB.

 In a small way, MCB can start blessing other CF startups by being deliberate in extending market or partnership opportunities to them. I am excited for one of my portfolio companies as the CF is about to deploy his solutions with a MCB.

Fund of Fund Investors (Limited Partners)

A search on Google on the terms “Christian,” “Faith based,” “Investors,” and “Fund Manager,” yielded topics on “Biblically Responsible Investing (“BRI”),” “Exchange Traded Funds,” and “Mutual Funds.” Funds under management exceeded $3 billion for some of the BRI fund managers, which is excellent. These fund managers steward their investors’ monies into sizeable companies (via mutual funds), whose values resonate with them and their investors.

In the startup world, however, the number of Venture Capital fund managers who express their BRI intention is far and few between. Not to mention the capital under management is below $100 million. Why is this so?  

Private Equity/Venture Capital (PE/VC), as an asset class, is deemed highly risky. However, university endowments such as Stanford are deliberate in allocating sizeable (~25%) portions to PE/VC. VCs are the first institutional funds that startups will raise from, and yet there is minimal dedicated BRI-type VC funds targeting CF startups.

Singapore started its VC journey more than 30 years ago, where most of the venture capital funds were contributed by the local government. While we have global companies (Singapore Airlines, DBS Bank), they belonged to Singapore Inc. Two privately run “startups”—Creative Technologies and MediaRing—were founded on capital raised from quasi-government VCs. The VC industry then was nascent and startup was not a career of choice. With little capital, there was little startup depth. Today the region is home to nine unicorns, 150 VC funds, and bubbles with startup activities. Startup investments amounted to $8 billion in 2018.[1] CF Startups can raise monies from these funds, but unless the fund managers are deliberate in bringing God into the CF Startups, they will have to lean into other Christian Business Platforms. Fund managers can disciple, that is make CF only if LPs subscribe to the disciple-making notion and share the same belief/faith. 

While VC is deemed a highly risky asset class, Family Offices and Fund Managers of Christian families can participate by taking a small step and sponsoring Christian VC Funds (from profits), with an aim of making disciples in the startup world. Even a 1% or 0.5% allocation can be sizeable to the VC class (Imagine: 1% of $3 billion = $30 million). In so doing, they will be giving a boost to Christian Fund Managers, who will have a much harder time convincing non-believers on the purpose of their Christian Venture Fund.

Beneficiaries of the God-sent Resources

As part of stewardship, CF startups that have benefited from Christian VC Funds have to respond by committing time (discipleship and prayer) and resource (profits) to “pay it forward” so that future CF can benefit from them. This includes committing say, 1% of their net earnings yearly, to fund Christian VC Fund 2. On a cumulative basis, and over a longitudinal time frame, the Christian VC Funds should be self-sustaining, and it will become a Christian Founders Fund.

 To build the community, CF who have journeyed further along must disciple a new group of CF. This way, there will be more CF in the marketplace who will acknowledge God’s ownership of their businesses, and this pool will be where we can draw from going forward.

One Christian businesswoman holds Monday morning prayers and devotions at her firm. A prayer list (from her staff) is shared by Friday evenings, and those present on Mondays will break into groups and pray over the items. To me, this is so beautiful as she has dedicated the first 5% of her workweek to praise and petition to God.

Conclusion

We are commanded to “Go and make disciples of all nations.” Our business owners must develop a personal relationship with God and His Word, and have fellow believers journey alongside them. Then they can stand firm when the winds of compromise howl at them, and they can be held accountable to the gift (business) God has given them.

 “Because God owns all of me and my business, I will. . . .” What will it be given the resources (time, money, relationships, business network) God has put in our hands? How will we choose to glorify Him?

[1] It’s raining mega rounds in Southeast Asia, Pitchbook, 21 Feb 2019 –  (https://pitchbook.com/news/articles/its-raining-mega-rounds-in-southeast-asia)

This article was originally published here.

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by Jerry Bowyer

“Before we can even ask how things might go wrong, we must first explain how they could ever go right.”

These words from Friederich August Hayek, the Australian-born economist who won the Nobel Prize in Economic Sciences in 1974, set us on our path. To understand how economics may become warped, we must first examine economics in its original, pristine form. This, of course, requires us to return to the starting point of all things: God Himself.

What role did God play in the creation of economics, and what was His original intent?

The Garden’s Economic Model

To begin with, God provides the root of creation and the starting point for all models. The very first sentence in our Bibles says, “In the beginning, God created … .” In the verses that follow, we read an explanation of God’s creation and organization of various resources. As the narrative continues, God provides an oft-overlooked hint at his economy: He introduces an object with the ability to reproduce itself—a fruit with seed in it (see Genesis 1:1–12).

This establishes a pattern repeated throughout the rest of the creation narrative. God blesses His creations by assigning them the dual role of reproduction and distribution with the goal of filling the sea, the skies, and the land (Genesis 1:22–24). Ultimately, God creates human beings. Unique to this creation is the reflection of the Creator himself: “In the image of God he created them, male and female he created them” (verse 27b). To this unique creation, God gives a unique command: “Be fruitful and increase in number; fill the earth and subdue it” (verse 28).

Having established a model for production and distribution, God reveals His model for consumption:

I give you every seed-bearing plant on the face of the whole earth and every tree that has fruit with seed in it. They will be yours for food. And to all the beasts of the earth and all the birds in the sky and all the creatures that move along the ground—everything that has the breath of life in it—I give every green plant for food. (Genesis 1:29–30)

Six days of creation yield the Garden’s Economic Model:

• Man was expected to work.

• Work enables the earth to bring forth fruit according to the seed placed within it (production).

• Creatures reproduce according to their own kind, filling the earth (distribution).

• These creatures take, as their food, that which the earth produces (consumption).

• A unique creation reflective of the Creator commands man to exercise dominion over everything else that was created (stewardship).

The opening text ends with the statement, “God saw all that he had made, and it was very good.” All of the objects God created were good. So also were the models God had created. Here was a balanced economy. Production was in balance with investment. Seed continued to reproduce, maintaining adequate supply to balance out the demands of consumption. The addition of oversight (Genesis 2:15) assured that the system would remain balanced.

Our God-Given Creativity

It is additionally important for us to recognize that, because God is creative in His character and nature, humans, having been made in the image of God, will likewise be creative in character and nature. From the very outset of human history, God granted humans a certain level of creative license. That is to say, while each of the other creations was solely responsible for reproducing according to its own kind, humans were given the task of managing and, to some extent, expanding the economy, increasing production through work and the careful oversight of the other creations, effectively taking on the creative element of God’s character with the capacity to modify the economy.

As British essayist Dorothy Sayers wrote:[1]

Looking at man, he sees in him something essentially divine, but when we turn back to see what he says about the original upon which the “image” of God was modeled, we find only the single assertion, “God created.” The characteristic common to God and man is apparently that: the desire and the ability to make things.

To ignore the existence of God when formulating economic concepts is to neglect the creative resemblance and creative capacity that humans share with their Creator. Those who fail to consider that humanity’s creative ability comes directly from humanity’s Creator tend to underestimate the importance of the wealth creation process itself in modern society, as evidenced by those still struggling to understand the wealth explosion of the last two or three centuries. In a similar vein, after the Fall, like all parts of God’s creation, people’s creative ability can be (and certainly are) misused for their own gain and to the detriment of other citizens.

What the Bible Does & Doesn’t Say about Economics

In summary, the Bible says that mankind has the resources of the earth with which to work and create wealth. As a measure of stored value, money exists for the bartering of goods and services. It appears that the Bible encourages a consistently valued currency. The Bible also encourages savings and investment of the money earned. Finally, government is established by God for the protection of the citizens and, by inference, of the commerce that takes place within its borders.

Admittedly, the Bible does not specifically address the complexities of the economic factors that fuel our economy today. But even though the Bible does not comment on housing starts and bank lending rates, principles of wealth creation can be developed, and investors can reason from these biblical principles and apply them to the current economic events to seek knowledge and wisdom for decision making.

The Economy Before and After the Fall

Prior to the fall, Adam and Eve were tasked with the management of the Garden of Eden, the subduing of the earth and the filling of it. They had a responsibility to perform “work,” and their tasks were blessed by God.

After the fall, however, pain and frustration became associated with these same tasks. Eve is told in Genesis 3:16, “With painful labor you will give birth to children.” Adam is told: “Through painful toil you will eat food from [the ground] all the days of your life. It will produce thorns and thistles for you. . … By the sweat of your brow you will eat your food” (3:17b–19a).

Finally, God moves Adam and Eve out of the Garden and closes the door on its economic structure, banishing humanity into a new model of sustenance. The principle-centered economic model makes its first shift from the Garden to modern day.

In the Garden, there had been balance, with God as the ultimate source of provision and the earth the tool through which He provided. Now work is toilsome, painful, and frustrating. Before, God had created all that was needed, and there was wholesome balance. Now, there is the potential for scarcity and lack. To not work meant to not eat. While God remained (and still remains) the ultimate source, after the Fall, Adam’s actions more directly factored into Adam’s supply. In this post-Fall economic model, our decisions affect our provision.

In order for Adam to secure resources for his consumption, in order to secure a surplus beyond that consumption for investment (i.e., seeding a field), Adam would have to experience the sweat of his brow. Herein we learn the principle that wealth is created through the medium of work.

Adam faced one of the classic decision-making dilemmas facing investors today: investment vs. consumption. That which he ate (consumed) could not be replanted (invested). On the other hand, if he were only to produce enough to cover his consumption, there would be nothing left to invest in future production.

Growing Options: Invest, Give, Tax

As society continued to evolve, the economic options available grew beyond the two available to Adam.

• In Genesis 4:4, Abel introduced a new component: that of honoring God with offerings (charity).

• Taxes to civil authorities and governments appear in Genesis 47 (to Pharaoh) and in 1 Samuel 8:14 (to Israel’s kings).

• Moses introduced the temple tax as an obligation to the Israelites for the upkeep of the temple (Exodus 30:11–16).

The three areas these options represent—investing, charity, and taxation—are potential avenues down which our resources can still flow today. Some are based on belief systems, and some are mandated by law. However, all can be reasonably stated as non-personal consumption. As such, they are payments to the government or to the church, or investments in future productivity.

In the next part in this series, we’ll discuss a biblical view of investment, consumption, and how to weigh the two.

[1] In chapter 2 of Dorothy Sayers, The Mind of the Maker (1941), available at https://www.worldinvisible.com/library/dlsayers/mindofmaker/mind.c.htm. 

This article was originally published here.
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by Steve Doerr

In my 20s, I faced a decision: accept a job at a large, multinational corporation or pursue vocational ministry. With a freshly minted degree from an international MBA program in the Arabic language track, I was certainly more strategically positioned for the corporate job. And, yet, I could not help but feel that a vocation as a businessman would mean missing God’s best for my life, i.e., full time ministry as a pastor or missionary.

In spite of these misgivings, I decided to take the corporate job.

Over the course of the next three decades, I lived in several Middle Eastern and Asian nations, traveling to over 75 countries and interacting with people of all sorts of religious and non-religious backgrounds.

I am grateful I accepted the offer, as it has given me and my family countless opportunities to serve, adventures and invaluable life lessons. But I still lived with a sense of disquiet for many years. At times, I imagined myself on God’s B team, where my job was to support the A team: missionaries and pastors doing the “real work”.

Eventually, God graciously cleared away this false guilt as I encountered teaching that broke down the sacred-secular divide with respect to calling and vocation as a question occurred to me:

“Was Jesus’ work as a carpenter as valuable as His work in public ministry preaching and healing?”

That seemed to stump people I asked, until one day, a friend of mine responded, “Don’t you realize that everything Jesus did was simply in direct obedience to the Father? So when Jesus was working as a carpenter he would have been out of the Father’s will if he had chosen to go into public ministry too early.”

The implication: What the Father cares about is simply my obedience, or the input I give my work. He takes responsibility for the output or outcome.

This realization shifted my emphasis to the importance of listening to His voice. Searching Scripture to discern the sound of God’s voice has shown me a few basic ideas: 

1.    God is the Owner of everything.1

2.    The Owner gives us the ability to generate financial capital and has entrusted each of us to be stewards of “His Stuff”.2

3.    The Owner will assess our performance on stewarding His stuff, just as we might assess the faithfulness and performance of a CEO or Fund Manager by how well they achieved the Owner’s objectives.3

As a steward of His stuff, I get to serve like a fund manager in God’s immense investment portfolio. He is a much more just, merciful Boss than I have ever had on Earth. Still, the system of goal setting and performance reviews I am accustomed to from my days in the corporate world can serve as a template for how we approach investing and stewarding His resources. In this context, two factors are critical for success: (1) Be absolutely certain that you have listened well and that your Plan aligns exactly with the Corporate Goals/ Owner’s Objectives; and (2) that you have carefully thought through the most effective and efficient way to accomplish the Plan.

WHAT IS THE OWNER’S RISK TOLERANCE? 

Every fund manager knows investment decisions must be guided by the owner’s risk tolerance and time horizon. The strongest financial return is often found in the riskiest investments, e.g., venture capital. Safe investments, on the other hand, yield less return, e.g. money market accounts.  

We know God’s timeline is eternal. Jesus tells us to invest our earthly assets to store up treasure in heaven, where it is secure and lasting.4 Jesus is reconciling all creation to Himself.5 And we live in the “now but not yet”, where the Kingdom of God has come, and yet we still live in a world that is not quite restored. An eternal timeframe creates a wholly different set of investment guidelines, almost impossible for us finite beings to comprehend, which is why the question of risk is important.

How do we assess risk when investing for the King of Kings? Although God has given us the Holy Spirit and sound minds to strategize and plan, the outcome ultimately depends on Him. 

Throughout Scripture, we see God rewards those who earnestly seek Him. We can invest with less fear, knowing He rates our performance based on listening and obeying.6 He loves us and gives us grace to live according to His ways and shows us mercy when we repent. Financial return is an important consideration, certainly, but it is not the only (perhaps not even the primary) measure Scripture uses to delineate success. 

When heeding the commands of a sovereign God whose purposes for His people are always good, there is no way to lose. The only true risk is to run from His call and bury our assets in the ground, where they cannot be put to work for His Objectives.

1. Matt. 6:19-21

2. Col. 1:20

3. Lk 11:28, Deut. 28:1-2

4. Deut 10:14, Psalm 89:11, Job 41:11, Ps 50:10, etc.

5. Gen. 1:28

6. Matt. 25:14-30