Investing doesn’t simply bring profits to the investor (sometimes it doesn’t even do that). It also profits the business in which we have invested. A Christian should avoid investing in any enterprise that makes its profit from people doing what they shouldn’t. For example, in most cases I believe people shouldn’t take out a second mortgage on their home. Consequently, for me to invest in high-yield second mortgages would be an attempt to profit from others’ poor decisions. I would not feel right doing that.

I wrote what follows (and much more) years ago about values-based investing, or biblically responsible investing, in my book Money, Possessions, and Eternity. I am including a small portion of it here in order to explain why I am so excited about a new book by Robin John called The Good Investor that I’m going to wholeheartedly recommend in this blog. If you have limited time, skip directly to what I have to say about that great new book.

Many Christians don’t evaluate the source of their investment income. God operates by a different standard: “You must not bring the earnings of a female prostitute or of a male prostitute into the house of the Lord your God to pay any vow, because the Lord your God detests them both” (Deuteronomy 23:18).

God does care where the money comes from. Of course, often a church or ministry can’t know the source of its contributions. The biblical principle applies primarily to the giver of the gift, not the recipient. But when pastors and leaders know that something has come from a source displeasing to God, they should address the issue, both for the sake of the donors—and those whose lives are affected by their choices—and the church or ministry. If this standard applies to the source of incoming funds, surely it applies even more to where we choose to put our money…

Consider Ephesians 5:1-11, which culminates in the command, “Have nothing to do with the fruitless deeds of darkness, but rather expose them.” How can we justify investing in companies that market the fruitless deeds of darkness? Isn’t funding evil a clear violation of the warning against establishing an unequal yoke with darkness (2 Corinthians 6:14-18)?

This certainly isn’t easy to track when there are so many companies with so many names. Most Christians would think it was wrong to invest in Playboy magazine. But the Houston-based Internet company Telescan specializes in data retrieval tools that it uses in partnership with Playboy’s Web sites. But who would know that if they saw Telescan on a long list of companies invested in by their mutual fund?

Hewlett-Packard supports Planned Parenthood, the nation’s largest abortion provider. Rick’s Cabaret International (NASDAQ symbol: RICK) is a public company self-described as a “premier adult nightclub offering topless entertainment.” In Putting Your Money Where Your Morals Are, Scott Fehrenbacher lists many objectionable companies that mutual funds invest in. Among these are Tenet (NYSE symbol: THC), the second-largest chain of hospital facilities in the nation, including some of which perform for-profit, elective abortions; and American Express (NYSE Symbol: AXP), which uses shareholder funds to actively promote homosexual causes.

….Those who own certain Fidelity mutual funds (which includes many Christians) have unknowingly helped support the government of Sudan, a genocidal regime that has systematically enslaved and persecuted Christians for decades. Various Christian denominations have invested in Talisman Energy, a huge Canadian oil company that does 25 percent of its business with Sudan. Vanguard and the state of New York were among those who divested themselves of Talisman after antislavery groups lobbied them. I hope by the time you read this it’s no longer true, but as of 2002, Fidelity still owned millions of shares in Talisman. Last year, I joined many others in addressing my concerns to Fidelity [I include in the book the letter I wrote them].

…Scott Fehrenbacher persuasively argues that it’s wrong for Christians to invest God’s money in music that promotes murder and rape (e.g. by funding gangsta rap), blatantly immoral movies, blood-spattering video games, pornography, nude dancing bars, abortion, alcoholism, and tobacco addiction. Some companies, including the large conglomerate that owns MTV, actively engage in trashing Christian beliefs and morals. That we would invest God’s money in companies sponsoring anti-Christian philosophies and activities seems unthinkable. Yet it happens every day.

The average Christian whose retirement program is in mutual funds or stocks managed by others has no clue where God’s money is actually going. Mutual funds serve to separate the investor from the companies invested in.

…Values-based investing isn’t a new concept. Scott writes in Putting Your Money Where Your Morals Are:

As early as the 1800s, the Quakers withdrew from business relationships and partnerships involved in the slave trade. In the 1920s, churches and denominations in America chose to actively screen their money from being invested in “sin stocks,” defined then as belonging to companies that manufactured products related to alcohol, tobacco, and gambling.

…If enough Christians would adopt a values-based approach, we might see a shift in priorities among some mutual funds or brokerages, so we could more wisely entrust them with our investments. But even if we’re the only ones to do this, our stewardship responsibility is to God, and he is the one who will ultimately evaluate and reward us.

It is every bit as true today as it was when I wrote and updated Money, Possessions, and Eternity: Mutual funds, today’s most common investments, distribute their investors’ money in a wide range of companies, some of which do things with the money that a Christian wouldn’t condone. The average Christian whose retirement program is in mutual funds or stocks managed by others has no clue where God’s money is actually going. Mutual funds serve to separate the investor from the companies invested in.

A brand new book is out, The Good Investor by Robin C. John, that I think should be read by every Christ-follower who gives financial advice or invests in companies, even if it’s only through a retirement plan. I love that Robin is not just encouraging us to avoid investing in what’s bad—as I did in Money, Possessions and Eternity—but to turn toward investing in what will bring joy and blessing to others around the world. Giving is vital, but investing with integrity is also crucial. He is addressing not just the negative aspect I dealt with in my book, but the positive aspects of investing. I highly recommend this book and was happy to endorse it.

Robin writes:

…what if it isn’t true that we’re powerless? What if it isn’t true that our little choices have no impact on the world around us? Our everyday decisions can make the world more what we long for it to be, more what God longs for it to be. And something most of us do already (investing) can participate in the world’s healing. The allocation of capital is a powerful tool; when used thoughtfully, and in connection with its true purpose, investing can create immense value and solve some of the world’s deepest needs. Or, when disconnected from its true purpose, it can extract value and cause extensive damage.

…Our money is doing work in the world. The question is whether our money is doing work that harms or work that helps. My hope as you read my story is that you will find inspiration to imagine how your investments can do good, how your investments can help and heal.

The possibilities for doing good, bringing power to bear on behalf of those most in need of relief, gives me hope. We’re not helpless. Our investments, our lives and work, our resolve to challenge the status quo—these are seeds of beauty.

Imagine how beautiful the world could be.

Check out Robin’s trailer for the book:

And in this podcast episode with Faith Driven Investor, Robin talks about investing in companies that actually make the world better.