“... Look at economic life through the eyes of faith ... ” (Economic Justice for All, a Pastoral Letter on Catholic Social Teaching and the U.S. Economy)

Got Money to Invest?

After working for some time, you have diligently saved a nice chunk of income.

You have reached new heights on your professional ladder, and your paycheck is larger than ever before.

Your business idea took off, and you have begun to reap the financial rewards.

An inheritance landed in your lap.

In any event, you find yourself with some money, and you are seriously considering investing it.

As if the pursuit of finding the right investment were not already daunting enough, you also find that you cannot ignore a nagging feeling: Not only do you want a return on your investment, but you want to do good with your money. 

But how?

What Is Impact Investing?

Impact investing is an investment strategy that not only provides financial returns but also seeks to drive social or environmental change that aligns with investors’ values. In essence, impact investors view a company’s commitment to “corporate social responsibility” before putting their money on the table.

The combining of those three words has been the source of intense debate. For example, if a corporation’s main objective is to create a profit, where does responsibility to other objectives fit in, and who makes the determination that a corporation’s actions advance positive social change?

Even after working through that worthy discussion, investors who are practicing Catholics also need to adhere to the tenets of the faith. And, as has been the case for 2,000 years, what we are called to do does not easily match up with any particular age’s deemed appropriate standards. Therefore, we cannot simply look around and see what is hot now.

There is, however, guidance for investors with more than just dollar signs in their outlook.

Socially Responsible Investment Guidelines

The United State Conference of Catholic Bishops provides direction and considerations in its “Socially Responsible Investment Guidelines,” found here.

Typical areas of concern for impact investors include health care, education, energy, and agriculture. Within those topics, these guidelines provide specific issues to be cognizant of when making financial decisions, including those related to protecting human life, promoting human dignity, economic impact, and the environment.

A distinctive perspective about the importance of our economic decision making is offered in the pastoral letter on Catholic Social Teaching and the U.S. Economy.:

“Like family life, economic life is one of the chief areas where we live out our faith, love our neighbor, confront temptation, fulfill God’s creative design, and achieve our holiness. ... [Our economic activity] exercises our talents—or wastes them.”

Revisiting the Parable of the Talents

The well-known Parable of the Talents is often raised when the topic of investing comes up (Matthew 25:14-30). Many people view this parable as harsh to the third servant who buried the sole “talent,” a significantly valuable token, that he received. As Bishop Barron explains in this video, the point is that we are called to use our talents (our gifts, our tools and resources, or our money) because they are not to remain solely with us, hidden away and safe from risk. Rather, these talents, such as an amount set aside for investing, are to be placed out in the world, to be given away, to be used and put into action, where they can benefit others, grow, and then come back multiplied.

Taking Action

In considering how to use your talents, especially in the case of financial investments, it is important to seek professional guidance. Sharing your desire to step into the arena of impact investing with a financial planner who has similar faith-based values can lead to additional resources about best strategies to put that savings, higher income, business success, or inheritance to work for positive change and also to provide returns.

Lastly, as noted in “Economic Justice for All, a Pastoral Letter on Catholic Social Teaching and the U.S. Economy”, “The desire of managers, professionals and business people to shape what they do by what they believe” is not only common today, but is a calling that Christians have heard across the ages. In heeding that call, we remember that “followers of Christ must avoid the tragic separation between faith and everyday life.’”

How we use and invest our money is a primary example of putting our faith into action.

Linda A. Burrows is an attorney specializing in trust and estate law in southern California.  She studied journalism at Cal Poly, San Luis Obispo, law at Pepperdine, and is currently pursuing a masters in tax law at Georgetown.  Linda is the founder of Soul Soda, a non-profit with the mission of refreshing faith in those, particularly Catholics, who are feeling disconnected from their religious roots.  She is a wife and mother of three teens.  Linda’s Confirmation name was that of St. Gabriel the Archangel.