RNS
By G. Jeffrey MacDonald
Religious activists with a moral agenda for corporate
America used to rely primarily on consumer boycotts and sympathetic
lawmakers to get the attention of Wall Street.
But now their toolbox is growing — and there’s a lot more money it.
Over the past decade, America’s market for religious investment
products has grown by more than 3,500 percent, according to data from
fund tracker Morningstar.
During the same period, faith-based mutual funds, which routinely
agitate for social change in corporate board rooms or shun stocks they
deem immoral, grew from about $500 million to more than $17 billion.
What’s emerging, observers say, is a market-based response to
popular demand for ways that people of faith can make their voices heard
on issues closest to their hearts. And people of faith — especially
social conservatives — are seizing what they see as a new opportunity
to make a difference.
“It’s just a matter of growing up” and adding more sophisticated
tools for advancing an agenda, says Ron Simkins, director of the Kripke
Center for the Study of Religion & Society at Creighton University in
Omaha, Neb. “Now, instead of boycotting Disney, they’ll be investing in
Fox Family Films.”
Religious conservatives are mobilizing to attach a voice to the cash
they already have on Wall Street. For example, the Tupelo, Miss.-based
American Family Association is for the first time urging its 2.8 million
online members to purge their investment portfolios of companies that
support a “gay agenda” or “anti-family” practices.
Yet, as social conservatives increasingly tether their agendas to
their investments, they’re hardly walking in lockstep. On the contrary,
they’re choosing among a range of religious financial products —
including 16 families of faith-based mutual funds — that vary in how
they define corporate responsibility.
Evangelicals, for instance, are getting behind more than one vision.
Some have contributed to the $600 million Timothy Plan, a family of
mutual funds with evangelical roots and a pledge to avoid “securities of
any company that is actively contributing to the moral decline of our
society.” Translation: screening out companies — including many in the
benchmark S&P 500 Index — affiliated with pornography, abortion,
gambling, tobacco, alcohol and non-married lifestyles.
However, evangelicals are also behind much of the $900 million
invested with the politically enigmatic Mennonite Mutual Aid (MMA)
Praxis Funds. This group avoids companies such as Pfizer, which fund
managers regard as manufacturers of abortion products. But MMA Praxis
also lobbies on behalf of shareholders for eco-friendly corporate
policies, and its pacifist orientation screens out stocks in defense
contractors and bonds issued by the U.S. Treasury.
MMA hears evangelicals saying “`I want more,”‘ says Mark Regier, the
MMA’s stewardship investing services manager. “`As an evangelical or
conservative Christian, I do care about the environment. I do care about
human rights. I do see the sense in being engaged with companies and
encouraging them to move to more positive positions on social issues.”‘
Roman Catholics, too, are taking their faith in different directions
on Wall Street. For instance, the KLD Catholic Values 400 Index attracts
investors concerned not only about abortion but also environmental
protection and discouraging overseas sweatshops. AHA Socially
Responsible Funds claims to embrace the teachings of the U.S. Conference
of Catholic Bishops. Ave Maria Funds, with about $550 million in assets,
sticks with just three criteria that it regards as paramount: no
abortion products or services; no pornography production or distribution
(including hotels where room TVs offer adult programming); and no
employee benefits for unmarried couples.
In some cases, faith-based funds seem to be accruing assets both
because of, and in spite of, their moral goals. The Amana Funds, which
specialize in investing according to Islamic principles, has grown from
$30 million under management in 2003 to more than $700 million this
year. A major reason, according to Deputy Portfolio Manager Monem Salam,
is the funds’ strong financial returns, which he says have attracted
many new, non-Muslim investors.
Still, promoters of what’s known as “morally responsible” or
“biblically responsible” investing are expecting the values component to
be a powerful drawing card.
Kingdom Advisors, a nationwide network of more than 1,200 Christian
financial advisers, this year created a subgroup of those who offer
biblically responsible investment products. Centurion Funds, named after
a faithful figure in the Gospel of Luke, launched less than a year ago
with a pledge from company President David Lenoir to “not just avoid the
`sin stocks’ but to look for the good in companies.”
And more than 600 investors, each committing at least $100,000 to
private money management with Stewardship Partners in Matthews, N.C.,
have demonstrated there’s a market for customizing equity portfolios
according to what CEO Rusty Leonard calls “red state Christian values.”
“Red state Christians (who tend to vote Republican in national
elections) give money to Christian ministries that try to sway the
political process,” Leonard says. “They got their people elected, but
they didn’t see their issues advanced to any great degree … .
Meanwhile, their opponents in the culture wars were coming around the
left flank and going into the corporate sector, which red state
Christians have ignored. We’re hoping to change that.”
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