The ethics of Biblically Responsible Investing (BRI) are not new. In fact, they can be traced not only to specific Bible verses but also to Jewish interpretive writing in the Talmud stretching back before Christ.
For example, the great Middle Ages Rabbi Maimonides (1135-1204 A.D.) forbade “the sale of weapons to people who may use them for violence or robbery (Mishnah Torah, Laws of Murder 12:12, 14).” And Rabbi Dr. Asher Meier of the Business Ethics Center of Jerusalem confirms that Jewish tradition requires an ethical approach to investing: “Any economic activity that has special social value can be considered a preferred investment,” he wrote.
Christians also had guidance hundreds of years ago in how to handle the resources with which God had blessed them. In 1524, Christian reformer Martin Luther excoriated businesspeople who left out ethics: “I shall sell my wares as dear as I can … But it means making room for greed and opening the door and window of hell … so long as I have my profit and satisfy my greed, of what concern is it to me if it injures my neighbor in ten ways at once? So you see how this motto goes so straight and shamelessly against not only Christian love but also natural law as well.”
John Wesley, the founder of the Methodist movement, “urged his followers to shun profiting at the expense of their neighbors. Consequently, they avoided partnering or investing with those who earned their money through alcohol, tobacco, weapons or gambling—essentially establishing social investment screens,” wrote William Donovan in The Balance.com.
Ratcheting forward to 1928, Philip Carret launched the Fidelity Mutual Trust, which became the Pioneer Fund, one of the first-ever mutual funds. Designed initially to serve church investors, the Fund had a policy of “screening investments on ethical grounds,” rejecting companies that traded in alcohol or tobacco. With Carret’s guidance, the Fund survived the 1929 Stock Market Crash and the Great Depression and went on to become one of the largest mutual funds.
In January 1994, MMA Praxis Intermediate fund, was launched designed with Mennonite beliefs, sought companies that support positive values such as the respect for human dignity, responsible management and environmental stewardship, while avoiding industries and activities like gambling, alcohol and tobacco production and military contracting.
With the rising number of “responsible” funds, however, there wasn’t really an option for Christian conservatives or pastors to invest without compromising their beliefs, including the sanctity of life and wholesome family values. In March 1994, under Art Ally’s leadership, the Timothy Plan unveiled its fund aimed at evangelical Christians.
Secular investment firms weren’t thrilled by the arrival of Timothy Plan’s Biblically Responsible Investments. In fact, mutual fund analyst Michael Lipper told Bloomberg News for a 1994 article titled “New Fund Seeks Christians:” “This fund may have gone too far. It sounds like someone trying to preach to the converted and then setting up a big collection.”
Time has proven Mr. Ally right. The Timothy Plan is one of over a dozen successful BRI-based mutual funds now available. Currently, Timothy Plan has over $1 billion of assets under management.
The basis of each of these funds is the Bible, which clearly states that all things belong to God, including each of us and everything we own. Genesis 1 through 3 tells us that God created all things for His own glory and that human beings have the honor of being at the very top of his creative order.
Since the beginning, God has given humanity the great gift of dominance over all living things, but also a responsibility to be good stewards of His creation. Therefore, we owe it to our Maker to use our money wisely. We should do nothing to hinder His Kingdom and instead advance it. We should not invest in ventures that promote or traffic in sin and thus are destructive to people.
Answering this charge, hundreds of thousands of Christians work to ensure that their finances honor God. For those committed to Biblically Responsible Investing (BRI), it is of upmost importance to honor God by aligning their investments with their values.
But does this mean sacrificing their return on investment? Possibly not. In fact, a considerable body of research indicates that investors do not have to compromise their bottom lines while engaging in BRI and may even reap higher returns in some cases.
A 2016 study called “Great Expectations: Mission Preservation and Financial Performance in Impact Investing” from the University of Pennsylvania’s Wharton School of Business found that screened investments performed favorably against unscreened investment funds: “Impact funds in the sample that seek market-rate-returns demonstrate that they can achieve results comparable to market indices, while still reporting mission preservation in the vast majority of their exited investments.”
However, an Oxford University 18-year study of screened funds comprising 180 U.S. companies for “sustainability” and other factors, such as excluding firms that employed child labor, showed better returns, including lower cost of capital and “stock price performance.” The authors compiled evidence “that High Sustainability companies significantly outperform their counterparts over the long term, both in terms of stock market as well as accounting.”
In 2015, a Christian Investment Forum study noted that previous studies had established that Socially Responsible Investing (SRI), of which BRI is a subcategory, performed as well or better than unscreened funds.
In an effort to determine whether the smaller universe of BRI funds matched the overall SRI finding, the authors concluded that, “Based on the analysis of historical performance data from the funds managed by members of the Christian Investment Forum [of which Timothy Plan is a participant], the results did corroborate the expectation that return performance was not reduced due to incorporating BRI, and in fact, there was a general outperformance compared to the industry averages,” the study found. “Over the last five years, a composite of the returns from all of the equity mutual funds within the Christian Investment Forum outperformed the industry average by 77 basis points on an annualized basis.”
The author cautioned that “the results of this analysis are not meant to suggest that BRI funds will result in outperformance. The most important reason to incorporate BRI funds into an overall investment portfolio is to better align investments with an investor’s values.” But investors and advisors can have peace of mind that “considering funds that can align with their Christian faith need not be a choice between values and performance.”
In short, investors who want to honor God with their God-given resources should not fear the unknown when it comes to comparable returns. After all, as the Bible tells God’s followers in I Samuel 2:30, “Those who honor me I will honor, but those who despise me will be disdained” (NIV).
Article by Robert Knight, an author and the Communications Adviser for Timothy Partners, Ltd., distributor of Timothy Plan funds (https://timothyplan.com). Since 1994, Timothy Plan has been a beacon for Godly stewardship in the financial community. The first of its kind, Timothy Plan is a family of mutual funds that screens Funds to ensure that no money is invested in companies that are supportive of ideals that are contrary to their biblical, moral imperative.
Mutual funds are available through a prospectus by contacting the fund or your financial professional. If you are considering a mutual fund you should always carefully read the prospectus before investing to analyze the investment objectives, risks, charges and expenses.