Here’s what you need to know if you want your investments to match your values.
By Kayleigh Kulp, Contributor, U.S. News and World Report
Socially responsible investing has become a popular way for investors to put their money where their values are. Experts say faith-based investing is now following suit in popularity.
“The faith-based investment approach is predicted to grow, especially as companies see the socially responsible investing agenda as good business,” says Alexander Lowry, professor of finance at Gordon College in Massachusetts.
There are more than 250 socially responsible funds in the United States, of which approximately 40 would fall into the biblically or religiously responsible investing space, says Dwayne Safer, assistant professor of finance at Messiah College in Pennsylvania.
The funds help like-minded investors avoid putting their money into items and practices that don’t match their spiritual values – such as alcohol, tobacco, pornography, gambling and guns – by screening them out, he says.
Faith-based investing is based on the idea that how a business makes money is just as important as how much it makes, says Ben Malick, chief investment officer at Bright Portfolios, which offers biblical investments to clients in Lee’s Summit, Missouri.
Faith-based investments exist across all asset classes and industries – and they control billions of dollars. Eager to get started? Here are a few things you should know before pairing dollars with dogma.
Do you want to invest for the greater good, a return, or both? Defining the impact you want to have with your faith-based investment is a good place to start. Investors who wish to follow the Jewish belief of investing in “tikkun olam,” or repairing the world, may choose to make investments without an immediate or monetary payoff, says Michael Kosowski of Herald Strategies in New York.
“My client, Solomon Schechter Day School of Bergen County, has a course called the ‘Design Thinking Course,’ where students would design solar-powered, collapsible lights for students without electricity in South Africa,” he says.
“Eventually, the school turned this course into an Idea and Innovations lab, where students will be able to use sand blasters, laser cutters, 3D printers and more technology in order to improve the lives of others. The Popkin family specifically invested their money in the future generations of Jewish children. It really highlights a key part of faith-based investing.”
Other organizations have the mission of ensuring they do not profit from the abuse of others. The Christian Investment Forum, which comprises of investors and advisors, says that it is “committed