When you read the question, “What kind of impact investor are you?”, you might be thinking “I’m not one of those people.”  A truth many faithful investors overlook is that if you invest, you are one of those people.  As John Coleman of Sovereign’s Capital likes to say (more on John below):

All investing is impact investing.

The more important questions for an investor who professes a Biblical faith are what kind of impact and whose kingdom does it serve.

Impact Investing

We agree that all investing is “impact investing”.  Whether you are managing your personal portfolio, sitting on a foundation board, investing in startups, or allocating retirement funds—you are shaping the world with every dollar.

An investor in a gambling business, or in a business that depends on the business of gambling businesses, is “impacting” gambling by providing capital.  The same can be said of investments that support pornography, tobacco, and alcohol businesses, or investments that support businesses with supply chains that utilize inhumane work practices such as human trafficking, slavery in the form of forced labor or child labor.  If you invest in those businesses, you are an accomplice–supporting the ways of the kingdom of the world.

Likewise, an investor in a business pursuing faithful integrity through business a better way toward Biblical flourishing is “impacting” the Kingdom of God by providing capital to that business.  If you invest in businesses operating in alignment with Biblical beliefs, principles and priorities, you are a partner in their redemptive work–humanizing people, beautifying the world and glorifying God.

On the flip side of the coin, an investor in a business who devalues, discourages or even prohibits a faithful leader of that business from pursuing faithful integrity and prioritizing flourishing over profit is also having an impact–just not a good one.

Unfortunately, that is not how the term “impact investing” is often used.  Here are a few examples:

Global Impact Investing Network: Impact investments are investments made with the intention to generate positive, measurable social or environmental impact alongside a financial return.

United Nations Development Programme: Impact investing is defined as the deployment of funds into investments that generate a measurable and beneficial social or environmental impact alongside a financial return on investment.

Fidelity Charitable: Impact investing is the act of purposefully making investments that help achieve certain social and environmental benefits while generating financial returns.

That is one type of impact investing. It is the type that may lead an investor to say, “I’m not one of those people.”  It is also the type that may lead an investor to feel morally superior, particularly if they describe themselves as a “socially responsible investor”. It is the type of impact investing that drove the demand for ESG investment products focused on companies that met certain criteria in the areas of “environmental, social and governance” responsibility.

A problem with that narrow definition is that it lets others “off the hook”.  They can bury their heads in the sand and make believe that they are not an accomplice.  They can sleep at night content in believing they are just an “investor” seeking to be a good steward of their capital by pursuing the biggest financial returns.

RE-IMAGINING Returns

You will note that that the typical definitions of impact investment segregate “impact” from “returns”, and “returns” are only thought of as “financial returns”.  Understandably, when investors hear “returns”, they naturally think of “financial returns”.  In fact, Investopedia starts the definition of “Return” with “A return, also known as a financial return”!

When investments are measured by financial returns, other desired “impacts” become add-ons–the desired impact “alongside a financial return“.  Unfortunately, that sounds good (and is certainly better than just focusing on financial return) but is not in line with Biblical principles or reality.

It is a Biblical principle that we can have only one “priority”–only one “end” is the real “end”  (“No one can serve two masters“, Matthew 6:24).  The goals and priorities described as other “ends” are likely just means to the real “end” (or “nice to haves” as long as they don’t negatively impact the real “end”), which means they will be sacrificed if they no longer serve the real “end” or if they jeopardize the real “end”.

Investors of Biblical faith need a measure of “return” that captures the Biblical purpose of their investments.  1 Corinthians 10:31 provides the answer:

So, whether you eat or drink, or whatever you do, do all to the glory of God.

Investors of Biblical faith are called to steward the financial capital God has entrusted to them in a way that glorifies God.  Of course, that is an extremely nebulous and unmeasurable “return”!  But one thing we can say with confidence based on Scripture is that comfortably measurable financial returns are not #1 on God’s list.  Proverbs 16:8 gives us guidance on priorities:

Better is a little with righteousness than great revenues with injustice.

Faithful investors glorify God in their investments by investing in organizations that glorify God.  We believe organizations glorify God by maximizing the flourishing of the creation they touch, particularly people.  They do this by Humanizing People and Beautifying the World.

You might be asking, “What about financial return?”  Just like profit, financial return is not bad (recall post #059-What About Profit?). Investors investing the capital God has entrusted to them need to be good stewards of that capital. Financial return just needs to take its proper place as a means and by-product but not the faith-driven end.

As a bonus, an investor gets a unique “two-fer” opportunity at what could be described as “Kingdom return”.  Most directly, an investor can pursue Biblical flourishing for those on whose behalf they invest and for the people touched directly by its operations (its employees, vendors, communities, etc.).  In addition, an investor can indirectly pursue Biblical flourishing by investing in a way that encourages and assists organizations it invests in to glorify God by operating in alignment with Biblical beliefs, principles and priorities.

Faithful stewardship requires more than financial performance metrics—it demands intentionality and integrity.

Types of Impact Investors

If we start with the premise that all investing is impact investing, then all investors who profess a Biblical faith are impact investors.  Going back to the title of this post, what kind are they?

We will look at two possibilities: Intentional vs Unintentional; and Compartmentalized vs Integrous.

Intentional vs Unintentional

Just as the pursuit of faithful integrity in an organization requires intentional leaders, investing faithfully to maximize Kingdom Return requires a faithful investor to be intentional. Faithful investors who ignore impact—or assume it doesn’t matter—are still creating impact.

Unintentional investing will almost certainly lead to impact that does not align with Biblical beliefs, principles and priorities. It will almost certainly drift toward the values and priorities of the world rather than the Kingdom of God. The default current of capital flows away from flourishing.

For example, an unintentional investor who is not opposed to the consumption of alcohol (after all, Jesus turned water into wine) is unlikely to consider that 60% of alcohol sales in the U.S. is to people who consume 74 or more drinks/week.  The industry relies on addiction. Will alcohol stocks be in their portfolio?  In their mutual funds?

An unintentional investor is unlikely to consider whether their investments support inhumane labor practices, facilitate abortion, or exploit natural resources.  An unintentional investor is also unlikely to take into account whether the companies they invest in are taking positive steps to align their business with Biblical beliefs, principles and priorities.

Intentional investing requires an investor to consider Biblical beliefs, principles and priorities and then seek investments that are aligned. Faithful investing starts with awareness and grows into purpose. It asks:

• What kind of world is this investment enabling?

• Who is being impacted—and how?

• Does this glorify God?

While it is likely to be impractical for the average investor to evaluate individual investments, there are funds focused on Biblically aligned investments.  An intentional investor will evaluate the alternatives to find one that aligns most closely with their Biblical beliefs, principles and priorities.  Here are just a few (based on how they describe themselves):

• Sovereign’s Capital has various funds (venture capital, private equity, fund of funds, real estate) that invest in companies and funds led by faith-driven teams.

• Sovereign’s Capital has created an ETF called the Flourish Fund.  They employ “faith-driven” investing based on non-denominational Christian values and seek companies that show “love of neighbor” for employees, customers and community with the goal of creating exceptional company cultures. They consider the following factors: the presence and depth of faith-driven management, an assessment of the level and types of employee benefits, availability of counselors for employees, whether a company’s mission/values/vision statement aligns with biblical values, the presence of faith-based employee resource groups, and the company’s products and/or services and their effect on consumers and employees. They seek to construct and maintain a portfolio that avoids industries and activities which it believes do not enable employees to flourish, specifically tobacco, alcohol, gaming, abortion, and pornography.

• Eventide Capital operates from a Biblical worldview to invest in companies that create compelling value for the global common good.  They employ a proprietary evaluation framework they call Business 360 to assess a company’s value creation and value extraction.  They look for businesses that create good products—those that develop, sustain, or restore good in the world–and operate with good practices—which they define as service to customers, employees, suppliers, communities, the environment, and society.

• Inspire Investing focuses on “Biblically responsible investing”.  They rate investments based on a proprietary Inspire Impact Score that measures.  The score includes negative scoring for a number of weighted factors such as alcohol, gambling, tobacco, exploitation, abortion activism, and LGBT activism.  They also have positive scoring based on factors such as employee welfare, customer welfare, ethical labor practices, ethical sales practices, ethical supply chain management, hiring ethics, human rights, risk management, fair competition, and water conservation.  Inspire also sponsors several ETF’s based on their scoring.

• Timothy Plan uses a set of filters to screen out investments that violate Biblical values.  For example, they filter out companies based on abortion, gambling, pornography, tobacco, anti-family entertainment, alcohol, sexual issues, and human rights abuses.    Timothy Plan sponsors a family of funds and ETFs based on their filters.

Compartmentalized vs Integrous

We emphasized back in post #90 (Intentional Leaders–Commitment to Authenticity) that authenticity is the embodiment of the “wholeness” of integrity, which is at the core of Integriosity^®.  Many faithful investors unknowingly fall into compartmentalization—segregating their wealth into two conceptual pockets:

• One for giving: “Kingdom money,” meant to align with Biblical priorities.

• One for investing: “Secular money,” expected to maximize return with minimal conscience.

They see “investing wealth” as “theirs” to be invested for the “largest” return.  They see “giving wealth” as God’s to be used charitably to serve others. We suspect that for many (if not most) faithful investors, God’s pocket is capped at 10% because they have been taught 10% is all he requires.

When an investor who professes Biblical faith has personal silos–compartmentalizing their life to keep one foot in the world’s kingdom and one foot in God’s Kingdom–their faith loses authenticity, which undermines the integrity of their witness as a person of Biblical faith. It can undermine the very Kingdom impact we may be trying to support with our giving.

A person who professes Biblical faith but lives with personal silos that keep faith compartmentalized in their charitable giving risks sending the world an unfortunate message about their Biblical faith.  David Kahle wrote:

Compartmentalized Christianity promotes the hypocrisy that the non-Christian world so regularly points out in church-going Christians.

This results in the underfunding of nonprofits due to the capped “giving” pocket, the underfunding of businesses led by faithful leaders pursuing alignment with Biblical beliefs, principles and priorities due to a fear of lower financial returns, and the overfunding by faithful investors of businesses operated in alignment with the kingdom of the world.

To live an integrous life of authenticity, faithful investors must stop thinking of their resources as residing in two pockets. It is all God’s to be used to serve.  What if faithful investors used one conceptual pocket to invest for Kingdom returns–whether through investment in businesses or charities?  What if that pocket held everything beyond what they needed to support themselves and their family?

That may look like “investing” in something that might deliver lower financial return but higher Kingdom return.  It also may look like “giving” in creative ways that allow a nonprofit entity to generate sustainable income.

Evidence suggests that investing in Biblically-aligned companies does not require sacrificing financial returns.  While it is not surprising that companies operated in alignment with how God designed the world would see positive results, the reason to invest for Kingdom return is because it is the “right” thing to do.  WHY matters.

Investing from one pocket also means holding nonprofits to the same standards as businesses in the way they steward their resources and care for their employees. The standards of Humanize, Beautify and Glorify apply equally to businesses and charities.

Intentional and Integrous

Investors, whether investing in businesses or nonprofits, should seek to be both intentional and integrous. This doesn’t mean abandoning financial prudence. It means redefining “return”—aligning it with God’s vision for flourishing rather than Wall Street’s vision for excess.

Be diligent, demand excellence, pursue values alignment, and then trust the outcome to God–because it’s all God’s anyway.

PERSONAL NOTE (from PM):  I recall saying to someone from Sovereign’s Capital that “all investing is impact investing”.  They asked if I got that from John Coleman, telling me that he had been saying it for years and might even have it trademarked!  At the time, I hadn’t met John Coleman.  I first met John Coleman in September 2022 when he spoke at the Christian Employer’s Alliance summit in Washington, DC.  He said it–very well.  I give him all the credit.  Great minds think alike.

ESSENCE: When you read the question, “What kind of impact investor are you?”, you might be thinking “I’m not one of those people.”  A truth many faithful investors overlook is that if you invest, you are one of those people, because all investing is “impact investing”. The important questions for an investor who professes a Biblical faith are what kind of impact and whose kingdom does it serve. As impact investors, faithful investors are either Intentional or Unintentional and either Compartmentalized or Integrous. Unintentional investing will almost certainly lead to impact that does not align with Biblical beliefs, principles and priorities. Many faithful investors unknowingly Compartmentalize by segregating their wealth into two conceptual pockets: “investing wealth” that is theirs and “giving wealth” that is God’s. To live an Integrous life of authenticity, faithful investors must stop thinking of their resources as residing in two pockets–one that should align with God’s Kingdom and one that can align with the kingdom of the world. Whether investing in businesses or nonprofits, faithful investors should seek to be both Intentional and Integrous, with a target return based on glorifying God. This doesn’t mean abandoning financial prudence. It means redefining “return”—aligning it with God’s vision for flourishing rather than Wall Street’s vision for excess.

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