Impact investing from a Christian perspective necessitates a deep understanding of what the bible says about the issues involved – namely, how to invest, where to invest, and for what purpose. Seems obvious as I write it, and yet prior to last week, “develop a workable theology of capital” was nowhere near the top of my to-do list.
We're far from expert at this stuff, but we at least want to enter (or start) the conversation. A 15-minute Google search suggested this isn’t a conversation happening very many places yet.
There’s a lot out there about topics related to theology of capital:
- theology of work (hint: it's worship. Institute of Faith Work and Economics)
- theology of business in general (partnership with God for human flourishing. Eventide Funds)
- interpreting “capital” as the intangible aspects of our lives (e.g. talking about the parable of the talents as if it doesn’t have to do with money)
- what the bible says about our relationship with money and philanthropy (turns out it says a lot about this. Generous Giving, National Christian Foundation, Crown Financial Ministries)
- how our Christian principles influence the way we invest.
But none of these quite address the questions related to what the Bible teaches about investing financial capital. Questions like:
How much return should we expect (is the idea of extracting a 45% IRR in contradiction to the prohibition against usury or is it just shrewd business)?
Should we only invest in companies run by christians (if not, what about the admonition against being unequally yoked)?
Do we always need to seek social/spiritual impact along with financial return? Or is making money for retirement or future giving a sufficient goal?
If it’s true that God designs business as a means of accomplishing His purposes in the world, then we ought to flow upstream and consider what implications this has for the capital that is invested in those businesses.
At an event in Silicon Valley hosted by Praxis before their Business Accelerator Finale, I heard a very successful venture capital investor talk about pursuing a theology of capital that is at once fully secular and fully sacred. Fully secular in the sense that his firm wants to make great financial investments with world-class sourcing, due diligence, structure, management, and exit. Excellence honors God and also earns the right to influence for Christ company founders and other investors. This influence is the fully sacred aspect of his theology statement.
This VC investor explained that he arrived at this idea through a month-long personal study of the book of Daniel, a story about a believer serving secular kings in a secular culture. I guess that's where I'll start.
What else should I read? Who's writing about this? Where can I look to study well on these topics? I appreciate your insights.
I was 17 when my dad died. It was sudden and deeply disorienting. Those days and weeks immediately afterward were a dense fog of grief and cleanup. He died without a will or estate plan (mainly because he had nothing to plan).
As the youngest of 5 kids and the only one still living at home without an adult job, I received the largest "inheritance".
Part 2 in our "Defining and Measuring Series"
"I own a company and I'm a Christian. Does that mean you can invest in my company?" - We get a version of this question at least once a week at Impact Foundation. Consequently, we've spent a lot of time thinking about what it means to say deploy capital for social and spiritual impact alongside financial gain. Is it enough to have "christian" management? Must the organization sell "spiritual" goods or services?
Part 1 in our "Defining and Measuring Series"
To reach broader adoption, kingdom impact investing needs a unified definition and a basic set of metrics to help determine if it works. Over the next few blogs, we'll explore these issues but first can't we find a better phrase?
"Kingdom" in our usage refers to the kingdom of God, as Jesus described it in His teachings. Not every follower of Jesus is comfortable with this phrase. For us at Impact Foundation, the hope of this Kingdom drives everything we do. Thus, it seems a suitable adjective to differentiate our version of "impact investing" and the least bad option.
part 3 of 3 in our "Defining and Measuring Series"
Tracking performance of investments to determine if we're meeting our goals for spiritual transformation feels like the holy grail of Kingdom Impact Investing. It’s time to put forth a working version that can be implemented now and improved over time because we have seen the power of Kingdom Impact Investing and want to unleash it for more good.
Sitting between Thailand and Vietnam, the country of Laos is marked by rugged mountains and one of the lowest per capita incomes in the world. This poverty fuels the two largest industries in the Golden Triangle (Laos, Burma, Thailand, and Myanmar): opium trade and human trafficking.
Jobs and the hope of the Gospel - they're needed here perhaps more than anywhere else. Fortunately, the Lao government has been implementing reforms meriting attention from US investors. For those interested in alleviating poverty through sustainable business, it's an attractive place. That it why Laos Agriventure got its start.
In their own words, Craig and April Chapman describe their experiences investing for impact.
Historically, we have set aside some amount of our personal financial resources to go to non-profits; i.e. organizations that improve the lives of others, with the goal of impacting not only their physical, emotional or educational needs, but also pointing them to God. FThe problem is that once we give the money away, it’s gone – and we have to continue making money in order to give more away. Clearly, that is not a sustainable strategy unless we have an unlimited capacity to make money. That’s where impact investing comes in.
Winding along dirt roads South of San Pedro Sula for two hours gave us plenty of time to talk. As we drove, Pete pointed out the truck window at the rows of young coffee, yucca, and pineapple. "All those fields are new. The first time I came out here [on a five hour donkey ride] there was nothing in these hills. Can you guess why that changed?"
Drought ended? Drug cartels stopped fighting in the region? Some nonprofit moved in with an agriculture program?
No, no, and no.
Over five days, we took 24 people to see eight projects in two countries. It was a bit of a whirlwind, so I recruited some help to describe what we saw: Jackson Johns, age 10 and Andy Minnich, age 9. I figured if two young boys can explain these social businesses, nearly anyone can understand. Certainly, these businesses are robust enough that we could write MBA case studies on each of them, but hopefully the simple explanation can help paint a quick picture of impact investing and spark your imagination.
Pete, David and Bob my friends of over 20 years model not only a personal work ethic that empowers their employees, but have also elevated the conversation of how to best help the poor by providing productive work environments that facilitate replicable and sustainable business models that radically increase a person’s potential to care for their families. Rita and I heard from two joyful recipients of this holistic approach to charity: a mom beamed of her ability to daily have a physically clean child and a farmer proudly told us of his capacity to pay for the education of his entire family. Indeed, responsible ways to help people help them grow more responsible.
I had a series of bad interactions with a Charity Enterprise that I love. It's caused me to reflect on my own work and the social enterprise industry at large. I don't want to identify this company, but they're one of the dozens that sells consumer products that have been made by at risk populations - people for whom a job means they can avoid jail, trafficking, putting their children in orphanages, etc.
To be fair, we all make mistakes. Every day. I'm not stellar at returning email and I can't remember names sometimes even my own kids. So the lessons I'm sharing in this blog are ones that I'm trying to take to heart for Impact Foundation. Maybe they'll help you as well.
Why does this matter? The long-term viability of investing for impact is at stake.