Christian Investing Is Not What It Used to Be By Rich Todd and Sarah Newman

Exercise Wise Christian Investing

Historically, Christian investing has been about carving out sin stocks, and Christian investors have settled for just living with the underperformance. Those days are long gone.

The Screening Process

First, let’s look at the screening process. Screening means different things to different ministries. The United States Conference of Catholic Bishops (USCCB) has the most comprehensive guidelines. Although these guidelines are intended for the USCCB, many Catholic Dioceses, foundations, and ministries use them as a north star. Because the guidelines are subjective, we help Catholic ministries develop a screening policy that reflects their core values. Protestant ministries follow a similar approach. They might have varying perspectives on what to exclude from their portfolios. However, the process remains consistent: document these decisions in a policy so that future committees can see what is essential to the organization and why and how decisions were made.

First Trust complied with the USCCB guidelines in its direct indexing platform, which was aimed at matching the S&P 500 Index and outperformed it over the last ten years.

Christian investing cannot end there. However, firms with values that conflict with the Church manage most of the assets for Christians and Christian institutions. We recommend asking the questions below of these firms.

Describe your stance on religious freedom in the workplace.

A friend of mine, a high-ranking executive at a Wall Street firm, was asked to remove his crucifix from his wall. The firm told him, “Your faith belongs in your home or church, not the office.” As Christians, we must live integrated lives, linking Sundays and Mondays to be a light in a dark world. We cannot give in to this abhorrent cancel culture that the secular world demands!

What organizations does your firm support or provide donations to?

A firm that manages billions of dollars for Christians gives their donation dollars to Planned Parenthood and other organizations that are anti-life and anti-Christian. They should have no business managing money for the Church.

Do you provide matching dollars to employee charitable contributions, and if so, does it include Christian organizations?

Secular companies commonly eliminate matching donations to Christian charities. This is pure bigotry against our faith and Jesus Christ.

Do you pay for abortions or provide transgender benefits in your retirement plan?

Again, firms that provide these “benefits” manage many Christian assets. Membership in the Catholic Benefits Association or the Christian Employees Alliance allows you to eliminate these provisions in your employee benefits plan.

Explain your proxy voting process.

Many firms, even those with Christian or Catholic in their name, are disappointing in their proxy voting. This is another way the evil one takes advantage of the Christian assets we steward. Liberal resolutions outnumber conservative resolutions ten to one. Unfortunately, the batting average for managers is weak. There are excellent Christian proxy voters who are in alignment with the Church. Demand that your asset managers use them!

Corporate resolutions involve LGBTQ+ board membership, abortion travel benefits, anti-Christian donation provisions, and “gender affirming care.” Alliance Defending Freedom has done a remarkable job of creating a platform for shareholder engagement.

Final Thoughts

The pendulum has started to swing in our favor, but we are only in the first inning. Be courageous. Be a good steward of the assets God entrusts to you!

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Richard Todd | CEO, Principal & Co-Founder, is the CEO and Co-Founder of Innovest Portfolio Solutions. He has more than 38 years of experience in investment consulting and provides investment consulting services to faith-based organizations, institutions, and families. Innovest has over 300 clients with assets of $50 billion, 61 employees, and 21 partners. https://www.innovestinc.com/richard-todd

Sarah Newman | Principal is responsible for business development in the faith-based and secular nonprofit markets. She has over 20 years of experience in nonprofit development, marketing, event planning, and business development. Sarah has also been a small business owner for 15 years.

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