"A faithful man will abound with blessings, but whoever hastens to be rich will not go unpunished." — Proverbs 28:20
People of all faiths and denominations participate in financial markets. The desire to generate a return on investment is universal. What distinguishes faith-based investors is not the goal but the framework: how they choose which opportunities to pursue and which to decline, and why that distinction matters to them as a matter of conscience.
The question at the heart of faith-based investing is a practical one. How does an investor participate in markets that include hundreds of opportunities in fossil fuels, tobacco, gambling, or pornography, and still feel that their capital reflects their values? The answer has given rise to one of the fastest-growing segments of the responsible investing landscape.
What Faith-Based Investing Actually Is
Faith-Based Investing, commonly referred to as FBI, is an investment strategy built on the premise that capital is a resource entrusted to the investor, and that how it is deployed carries moral weight. GuideStone Investments, one of the leading faith-based investment managers, defines it as a strategy that deploys God-given resources in the capital markets in a way that honors Him and furthers His Kingdom.
That definition frames investing not merely as a financial act but as an expression of stewardship. The return matters. But so does what is being supported in pursuit of that return.
Seven out of ten Americans say their personal values guide their investment choices, according to GuideStone. For Christian investors in particular, that alignment extends beyond general ethics into specifically biblical criteria for evaluating corporate behavior.
FBI, SRI and BRI: A Rose by Any Other Name
Faith-Based Investing goes by several names. Socially Responsible Investing is the broadest term, encompassing any investment strategy that considers social and environmental impact alongside financial return. Biblically Responsible Investing narrows that framework to specifically Christian criteria. Faith-Based Investing is often used interchangeably with both.
The distinctions between these terms are real but modest. All three approaches share a common foundation: investment decisions should reflect the investor's values, not merely their appetite for return. As Gertrude Stein might have observed, a rose is a rose is a rose. The concepts travel under different names but point toward the same destination.
What they share operationally is a screening process. Faith-based funds typically avoid companies that manufacture, distribute, or donate to causes involving abortion, anti-family entertainment, pornography, gambling, tobacco, alcohol, or weapons. Those exclusions are the negative screen. Positive screens seek out companies whose practices actively align with faith-based values across environmental, ethical, and social dimensions.
Performance Has Caught Up With Principle
A significant objection to faith-based investing has historically been performance. Earlier generations of faith-based funds carried higher fees and delivered weaker returns than conventional alternatives, which made them a difficult recommendation for advisors focused on fiduciary duty.
That landscape has changed. According to Envoy Financial, faith-based and biblically responsible funds are now the fastest-growing subset of the socially responsible investing category, and both fund performance and fee structures have improved significantly. The argument that faith-based investors must accept lower returns as the price of their principles has become considerably harder to sustain.
How Faith-Based Investing Works in Practice
Faith-based investing does not require investors to put their money exclusively into church-affiliated companies or religiously operated organizations. Churches and places of worship do not sell securities directly. What faith-based investing does require is that the investor's choice of managers, funds, and individual investments be filtered through a values framework.
According to Investopedia, faith-based investors seek returns by choosing investments that align with their religious beliefs, with the majority of strategies excluding companies deemed immoral based on the investor's criteria. Like all investment strategies, FBI does not guarantee returns and is subject to the same economic, interest rate, and geopolitical risks as any other approach.
The practical mechanics are accessible. Faith-based mutual funds and ETFs are managed with explicit screens already applied. Faith-based advisors specialize in building portfolios that satisfy both financial and values-based criteria. And the investment principles followed by major religious institutions are generally publicly available, providing a useful reference point for individual investors building their own approach.
The Growing Appeal of Guilt-Free Returns
The appeal of faith-based investing is straightforward: it allows investors to pursue competitive returns without the discomfort of knowing their capital supports industries or practices that conflict with their deepest convictions. That alignment between conscience and portfolio is not a minor consideration for the investors who seek it. It is the point.
Whether called FBI, SRI, BRI, or values-based investing, the framework rests on a single premise that Proverbs articulated long before modern portfolio theory existed: the pursuit of wealth is legitimate, but the means by which it is pursued carry moral consequences. Faith-based investors have simply decided to take that premise seriously in their financial lives as well as their spiritual ones.
Next Steps for Investors
If faith-based investing aligns with your values, start by identifying whether your current portfolio includes holdings in industries that conflict with your principles. Research faith-based mutual funds and ETFs that apply explicit biblical or values-based screens. Consider consulting a faith-based financial advisor who can build a portfolio that satisfies both your financial goals and your convictions. Future articles in this series will address positive and negative screening in greater depth.
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References:
GuideStone, "What Is Faith-Based Investing?" 7/15/24
https://www.guidestone.org/Resources/Education/Articles/Investments/What-Is-Faith-Based-Investing
Ibid.
Envoy Financial, "What Is Faith-Based Investing?"
https://www.envoyfinancial.com/what-is-faith-based-investing/
Smith, Lisa, Investopedia, "A Guide to Faith-Based Investing," 1/20/24
https://www.investopedia.com/articles/stocks/12/investing-and-faith.asp