To understand the purpose and impact of Faith Based Investing, it is important to look at the fundamental relationship between our faith and money.  God and money.  Or perhaps more accurately, God or money?  Which of these has the higher priority in our lives?  We know which one should have the higher priority, but in practice we often center our lives around money and things money provides.

In his book Counterfeit Gods, Tim Keller writes that

“internal idol worship, within the heart, is universal… the human heart takes good things like a successful career, love, material possessions, even family, and turns them into ultimate things.  Our hearts deify them as the center of our lives, because, we think, they can give us significance and security, safety and fulfillment, if we attain them.”

The point here is not to disengage from a successful career, love, money or any of these.  It is simply to understand their relative priority to what we know should be the highest priority – God.   Further, it is then to consider how our Faith in God effects our actions, and specifically in this case how our Faith effects our actions with our wealth – faith and investing.

There are 4 main dimensions of money in our lives.  We earn it from our work or vocation.  We spend it on things we want or need.  What is left we can invest to increase our wealth.  From what we earn, save, and invest we can give to others or leave for our families.  Earn, Spend, Invest and Give.  Within each of these dimensions, it is appropriate to consider how our faith and the values that derive from that faith, can or should impact our actions.

4D of Faith and Wealth

On each dimension, there are some simple questions worth considering.  The first question in each is always should Faith influence and affect actions?

EARN – Where do I work?  How do I work? How much should I work?

SPEND – How much do I spend?  Where do I spend?  For what do I spend?

INVEST – How much should I invest?  In what should I invest?  With whom should I invest? What is my risk tolerance on investing?

GIVE – How much do I give?  Where do I give?  How do I give?

The easy part is asking the questions on each dimension.  The much harder part is answering those questions honestly with the right perspective, and acting from that answer.  And doing that over and over and over.

Independent BUT Inter-dependent

It is possible to look at each of these dimensions, and make decisions about integration of faith only within that one dimension.  There is independence in each dimension.  But they are also inter-related and highly inter-dependent when considered holistically.  Where we work and how we work can certainly impact how much money we earn and therefore how much we have and for what do we spend it.  Decisions on spending and saving certainly impact how much is left to save and invest, and thus how we invest.  Finally, how we invest determines how much I will have to be generous in giving to others.

The point here is not to suggest that every decision we make has the same impact.  Nor is it to suggest even that each dimension is as important as the others.  We spend much more of our time in our vocations, so how we bring our faith into that work may have more significant impact than other dimensions.  But integrating faith well in one dimension does not, nor should it, excuse neglecting integration in the other dimensions.

Faith & Investing – A CIF Perspective

As noted above, incorporating Christian faith into investment decisions is not an either/or question in relation to the other dimensions.  Integrating investing with faith does not replace the need to be Christian in other parts of our lives, or in other ways in which we use money (earning through work, spending wisely, and giving it generously).  Nor should giving generously substitute for investing in ways that glorify God and align with his kingdom.  If the goal is to seek to fully integrate Christian faith into our lives, then each area of our lives needs attention to successfully integrate.  Being generous with your time and treasures is wonderful, but it doesn’t give permission to lie, cheat or steal in other parts of your life.  A common false dichotomy is to suggest there is a required choice between how and where to integrate faith between these four dimensions, an either/or decision.  The choice is not between each, but rather if Christian faith and values are considered at all and how deeply it is considered on eachdimension.  So the goal is full integration and interconnectedness, which obliges us to strive to be better in each unique area, to do all we can do to give God our best.  We can never get to full interconnectedness, but as with the rest of our Christian faith, that isn’t a reason not to strive for better.

With that perspective, investing must be considered separately from earning, spending and giving.  Investing in a way that puts God above ourselves, that aligns with Christian faith, and meets our responsibility to be good stewards of what God has provided, are the critical components.  Being a Christian investor should not be about meeting some arbitrary test or threshold.  It is about keeping perspective on priorities, and continuing to strive to steward what God has given us in a way that honors him and our Christianity.

Opportunities for Faith and Investing

The Christian Investment Forum (CIF) is an association of mutual fund companies, registered investment advisors, and other financial industry service providers who all embrace the idea of Faith based investing.  For CIF, Faith based investing is defined as follows:

“Biblically Responsible Investing, or BRI, applies Christian values to investment decision making by incorporating moral and social principles into traditional financial analysis.  BRI provides a platform for the faithful stewardship of God’s gifts on the basis of our shared Christian faith.”

Every CIF firm actively incorporates the Christian faith uniquely into their investment decisions.  Each firm purposefully engages on how best that faith should be reflected in their organization and investment processes.

The ability and the opportunity to better align investing with the Christian Faith has grown tremendously in the last 10 years, as more funds have become available (70 funds from CIF members alone) and more investors and advisors have recognized the importance of Biblically responsible investing.  Studies have also shown that these funds from CIF compare favorably to the overall market averages.  These results match with research from other financial experts who conclude that incorporating values into investing has a positive effect on performance while providing better alignment with an investors values and profile.

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