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Faith-Based Portfolio Screening by Richard Todd

Faith-Based Portfolio Screening to Align with Values

Faith-based organizations — churches, dioceses, religious orders, and other religious institutions – have often created portfolios for their investments assets that are aligned with their values.  It is common to see them screen out companies connected to abhorrent practices or that are involved in industries that violate their values. Abortion, pornography, child labor, land mines, and alcohol are a few examples. On the other hand, they might favor investment in companies amenable to certain practices like religious freedom in the workplace.  Developing values-aligned portfolios is tricky when many investable companies are multi-faceted. Revenue thresholds for companies that sell goods and services might need to be developed.

The United States Conference of Catholic Bishops offers investment guidelines, as does the Presbyterian Church (USA). Many other religious organizations offer their investment guidelines in the public domain, which is helpful in the formation of an investment policy. We believe that each church or organization should create its own policy. Some will say that they are not trying to make a statement with their investment portfolio and instead seek to do so with their mission. Others are very strict with their investment portfolio, screening out a great many companies that have a business focus or practices in conflict with their values. 

Why You Should Care

Should an organization or church care? Our experience has been that it is common for them to care as much or more about whether their vendors’ values are aligned than whether the actual investment portfolio is faith-based aligned. While it is becoming easy to screen a faith-based portfolio using technology and a variety of vendors in this space, it is more difficult to determine value alignment with the companies that provide financial services in the faith-based world.

Value Clash

The following values analysis was conducted by a 1792 Exchange. Following are three real examples of internal values of vendors that may conflict with faith-based organizations:

  • Investment consultant to $50 million Christian Community Foundation

“The company has discriminatory policies that exclude religious nonprofits from charitable giving and fails to protect its employees from viewpoint discrimination. [The company] uses its reputation and corporate funds to advance ideological causes and groups hostile to freedom of expression.”

  • Mutual fund sponsor of a religiously screened “Catholic” mutual fund

“[The company] has exercised its large holding in big corporations to vote against board members who are not progressive or “diverse” enough. [The company] does not protect against viewpoint discrimination but does discriminate against faith-based charities. [The company] provides travel benefits for abortions.”

  • Investment manager for a Catholic Diocese

“In its stated policies, [the company] discriminates against religious nonprofits and fails to protect its employees from viewpoint discrimination. It also uses its corporate reputation and funds to advance leftist ideological causes hostile to freedom of expression…”

Faith-based organizations and churches that care about their investment portfolios and their values have entered a new paradigm. The paradigm shift in the secular world happened over three years ago and has put many Christians on the defensive. New tools and research are becoming available to help Christians understand who is providing services to them, as well.

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Richard Todd is the CEO and Co-Founder of Innovest Portfolio Solutions. He has more than 35 years of experience in investment consulting and currently provides consulting services to institutions and families. He has been a frequent author on fiduciary and investment-related matters and has served as a trustee on a number of boards serving religious organizations.

More on Innovest can be found at www.innovestinc.com. Rich can be reached at rtodd@innovestinc.com or 720-586-6353.


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