What is Faith-Based Investing?
Aligning Wealth with Biblical Values
In an age where investing is often driven solely by financial returns, faith-based investing offers a different perspective—one that seeks to align capital with biblical values and promote the common good. This approach recognizes that money is more than a means to accumulate wealth; it is a tool for stewardship, one that can be used to honor God and serve others. By strategically allocating resources to businesses that create beneficial goods and services while avoiding harmful or unethical industries, faith-based investors can pursue both financial growth and a higher purpose.
Investing with Purpose
At its core, faith-based investing is about stewardship. Scripture calls believers to manage resources wisely, using them in ways that reflect God’s principles of integrity, justice, and compassion. This means investing in businesses that produce good goods and services—those that contribute positively to society—while avoiding companies involved in harmful products or unethical practices. Faith-based investors seek to ensure that their financial decisions reflect their values, supporting enterprises that demonstrate responsibility, fairness, and care for their stakeholders.
The Pillars of Faith-Based Investing
Faith-based investing is built on several key principles that guide decision-making and portfolio construction. These pillars help ensure that capital is directed toward businesses that align with biblical values while avoiding those that contradict them.
1. Promoting Good Goods and Services
A central tenet of faith-based investing is prioritizing companies that provide products and services that benefit society. These businesses create value not just for their shareholders but for their employees, customers, and communities. Examples include companies in healthcare, technology, education, and sustainable agriculture—industries that improve lives, foster innovation, and enhance human well-being. By supporting these businesses, faith-based investors contribute to the flourishing of individuals and communities, reinforcing the biblical mandate to love and serve others.
2. Avoiding Harmful Industries
Just as faith-based investing seeks to support good businesses, it also seeks to avoid companies engaged in industries that are inconsistent with biblical values. This means screening out businesses that profit from activities such as:
- Alcohol
- Abortion
- Adult entertainment
- Cannabis
- Firearms
- Gambling
- Nuclear power
- Predatory lending
- Tobacco
- Weapons systems
These exclusions are not meant to make political statements but rather to ensure that investors are not profiting from activities that may cause harm to individuals and society. The goal is to steward wealth in a way that aligns with biblical principles, regardless of varying personal opinions on these industries.
3. Encouraging Ethical Business Practices
Beyond screening out harmful industries, faith-based investing actively seeks companies that uphold strong ethical standards. This includes businesses that demonstrate:
- Good stewardship of creation – Companies that prioritize sustainability, responsible resource management, and environmental care.
- Strong stakeholder relationships – Businesses that treat employees, customers, and suppliers with fairness and respect.
- Sound corporate governance – Organizations that operate with transparency, accountability, and integrity.
By prioritizing businesses that embrace ethical practices, faith-based investing promotes a culture of responsibility and moral leadership in the corporate world.
The Role of Shareholder Advocacy
In some cases, rather than excluding a company outright, faith-based fund managers may choose to engage in shareholder advocacy. This approach involves using ownership stakes to influence corporate behavior, encouraging companies to adopt ethical policies and improve business practices. Shareholder advocacy can take various forms, including:
- Filing shareholder resolutions to promote transparency and accountability.
- Engaging in direct dialogue with company leadership to discuss concerns and encourage change.
- Voting on corporate policies to align governance with faith-based principles.
This strategy allows investors to be a voice for positive change, working to transform companies from within rather than simply avoiding them. It recognizes that businesses can evolve and that ethical influence can lead to better corporate practices over time.
Financial Performance and Faith-Based Investing
A common misconception is that faith-based investing requires sacrificing financial returns. However, research suggests that companies with strong ethical standards and responsible business practices often perform well over the long term. Businesses that treat employees fairly, operate transparently, and manage resources sustainably tend to experience greater stability and resilience. Faith-based investors, therefore, do not have to choose between their values and financial success—they can achieve both.
Moreover, as demand for responsible and values-based investing grows, more financial products are being designed to align with faith-based principles. These include mutual funds, exchange-traded funds (ETFs), and separately managed accounts that allow investors to build diversified portfolios without compromising their beliefs.
In our experience, faith-based investors can achieve comparable performance to traditional investors while gaining the advantages of making a positive impact on the world.
A Holistic Approach to Stewardship
Faith-based investing is not just about financial decision-making—it is part of a broader commitment to biblical stewardship. This perspective extends beyond investment portfolios to include financial planning, charitable giving, and wealth management strategies that reflect God’s calling.
- Generosity and Philanthropy – Faith-based investors often integrate charitable giving into their financial plans, supporting ministries, non-profits, and community initiatives.
- Estate Planning – Ensuring that wealth is transferred responsibly, preserving a legacy that aligns with faith-based principles.
- Tax-Efficient Strategies – Using wise financial planning to minimize tax burdens while maximizing impact for both family and charitable causes.
By incorporating these elements into their financial journey, faith-driven investors can ensure that their wealth serves a greater purpose, advancing the Kingdom of God and benefiting future generations.
The Impact of Faith-Based Investing
Faith-based investing is more than a financial strategy—it is a way to live out one’s faith in the economic realm. By intentionally directing capital toward businesses that uphold biblical values and avoiding those that do not, investors can contribute to a marketplace that reflects integrity, justice, and compassion. This approach not only seeks to generate financial returns but also strives to shape a world that honors God and promotes human flourishing.
For those looking to align their investments with their faith, we help investors navigate the complexities of the financial world while remaining true to their values.
Conclusion
Faith-based investing provides a powerful opportunity to integrate financial stewardship with biblical values. By prioritizing good goods and services, avoiding harmful industries, and encouraging ethical business practices, investors can make a meaningful impact on both their financial future and the world around them. Whether through exclusionary screening, shareholder advocacy, or comprehensive wealth management, faith-driven investing ensures that money is managed with purpose, integrity, and a commitment to honoring God.
As stewards of God’s resources, we are called to invest wisely, ensuring that our financial decisions reflect our faith and contribute to the common good. Faith-based investing allows us to do just that—building wealth while making a positive difference in the world.