When Values and Profits Collide

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

This week we have a guest post from Jay Peroni. I realize that the issues of abortion, embryonic stem cell research, and the like are volatile, but the issues brought up in this piece are valid -- namely, are you spending/investing in companies/products that go against your personal beliefs (like an environmentalist buying a Hummer, a teacher investing in a company that outsources public school work, and so on). It's a valid question -- not only for Christians, but for everyone. So if any of the examples put you off, please move past those and concentrate on the thought behind them -- are your beliefs and your financial actions aligned?

Most Americans agree that both principles and values should come before any financial profits. If you, too, agree, then would it not be logical to assume that your investments ought to reflect the principles that you hold important in your daily life? This fundamental concept can be hard to follow in today’s society when it appears that so many of America’s most admired companies put profits before principles. Stories of greed, selfishness, and corruptness fill our TVs, radios, and newspapers and can pollute our perception of corporate America. For every bad story, there are also numerous good ones; you just have to be willing to look for them.

Many corporate leaders are faced with decisions in which values and profit collide. This is why it is valuable for you, the investor, to set your priorities. Let your principles and values guide you in accomplishing this task. To start, ask yourself this important question: Would I abandon my principles in favor of choosing a path of profit? Think long and hard about that very question.
 
Would You Take a Bullet for Your Faith?

Sometimes faith is built on a weak foundation—it is easy to move and quick to fall. Other times it is built on solid ground—unable to be swayed or moved. Where does your faith stand? Is your faith strong enough that you would let nothing detract you? Would you take a bullet for what you believe in? If push came to shove and you were forced to choose between your life and your faith in God, what would you choose?

One story from the Columbine High School tragedy involves Cassie Bernall, a student who was shot to death as she confirmed her belief in God. One Tuesday in April 1999, it was reported that Cassie was sitting in the school library studying when the unthinkable happened. A fellow student armed with a gun entered the library and opened fire on his classmates. He came across Cassie and asked: "Do you believe in God?" "Yes, I believe in God," she said. "Why?" the gunman asked. But he did not wait for an answer. He shot and killed Cassie.
 
Giving up your life for your faith is the ultimate sacrifice. I ask you, "How important is your faith in your financial life?" When it comes to your finances, does your faith in God guide your decision-making process or are you motivated solely by profit potential? Is your faith strong enough that you cling to your principles before analyzing what type of gain you may make? Will you take a strong stance, as Cassie did, and stand strong on your beliefs no matter what the consequences may be? Whether you are new to your faith or have a solid foundation, my goal with this book is to help you make a bigger difference with your money. By getting more, you will have more to give!
 
Shock and Awe: I Own What?

I met Hannah Stephenson in 2005. At the time, Hannah was working for a Catholic university. She had never put much thought into her retirement portfolio or the values it reflected. As she glanced at the list of stocks held in her mutual funds, she recognized a few familiar names. They appeared to be good companies with good products. However, as she progressed farther down the list, some names stood out like a sore thumb (names changed) . . .

• Cuties and Beauties, Incorporated—Producers of pornographic videos and magazines
• Extinction Corporation—Producers of abortion-related products
• We R God & Associates—A company involved in cloning and embryonic stem cell research
• No-Tell Hotels—Engaged in promoting pornographic video distribution  

Beyond the names Hannah recognized, there were probably many others she was unaware of that also violated her moral compass and contradicted the beliefs of her faith. Hannah had made conscious decisions not to support unfavorable companies that did not reflect her values. In spite of these conscious decisions in her consumer life, the end result showed that some of Hannah’s investment purchases had slipped through the cracks in her portfolio. She questioned whether she should be investing in companies she was so strongly opposed to. How could she do this with a clean conscious? If she did profit with her current investments, was it the moral and ethical thing to do?

Where to Draw the Line?

Hannah makes deliberate choices in her life each and every day. Such choices include, but are not limited to: where she works, where she spends her income, what charities and ministries she supports, and where she invests her savings.

• Work: Hannah wouldn’t work at an abortion clinic because she is pro-life.

• Spending: She wouldn’t purchase pornography.

• Giving: She wouldn’t donate money to fund embryonic stem cell research.

• Investing: Hannah did not even consider where she was investing. She unknowingly was investing in a mutual fund that bought the types of companies that were in conflict with her beliefs.

Disturbingly, upon reviewing her statements closely, Hannah found that she was supporting all of these areas with her investment dollars. Even though Hannah strives to support causes she believes in and avoids things she is opposed to, these factors were never considered in her investments. Each year her investment dollars were supporting values that blatantly contradicted her belief system. Bottom line, Hannah felt that she was working against herself.

Comments

[Ben]

Wouldn't index funds also include such companies?

[headknocker]

As a Christian and a financial counselor this is one that I deal with more often than I would like to. Unfortunately, if we play devil's advocate, we find this issues to have many more turns than we think. For example, does your gas station sell Playboy or Hustler from behind the counter? Does your doctor contribute to Planned Parenthood? Does your insurance company invest in stem cell research?
Ultimately, I think the key is when possible and when you have a choice, are you knowingly contributing to companies that are off course with your moral compass, simply in the name of profit or greed?
Good article.

[Noah]

So close, yet so far. I generally appreciate your Sunday articles even if we're not religiously in sync. Yet this one, which has such potential, ultimately fell too far to be redeemable.

I think it's a great idea to see what companies you actually support. For example, for me, Domino's contributes lots of money to pro-life propaganda and therefore does not receive my dollars (their pizza ain't great either). But I've got a few problems with this execution.

First of all, DYING for your faith? Cassie didn't die for her faith, she died because a lunatic kid with a gun shot her. Secondly, if someone has a gun to your head, do what they want. Give them your wallet, renounce your religion, whatever. You can do far more good on this planet alive than dead, and hopefully(!) God forgives you in your exigent situation.

But c'mon, Extinction Corp? Does this writer want to be taken seriously? Little pretentions like that ruined what was a good concept. Had the author stuck to that concept this article would have been far more engaging and persuasive.

[Shaun Connell]

Wow. Dead on. Thanks for publishing this. Is there any service out there that allows us to see what companies/stocks support what negative activities?

[JimL]

It is difficult for the average person to really know what companies own/control. Secondly, with mutual funds as the primary vehicle used in retirement accounts, it is even more difficult to know at any given time what the entire porfolio consists of as stock are bought and sold by funds every day. It seems the easiest way of making choices based on your beliefs is to decide which establishes will directly benefit when spending your direct dollars.

[Sarah]

The Cassie Bernall story is no longer believed to be true. See, e.g., http://en.wikipedia.org/wiki/Cassie_Bernall. (This is no way detracts from the tragedy of her death, of course.)

Hey Noah, That's were true faith comes in. It is through hard times, good times, and yet the most frightening times. Faith is not about convenience. Yes I believe God forgives when asked with a sincere heart. Yes she did die because of her faith. She died because she told a very disturbed person that she believed in God. It's very offensive for you to minimize a childs death for the one thing she had most. Her Faith

[Noah]

It's also offensive to cite to a story that apparently never happened. But even if it had, her death should be nothing but a tragedy. You're welcome to your faith, but when kids start dying it's time to get involved with Earthly affairs.

I don't believe in blaming the victim. I only want this tragedy to never happen again.