How Impact Investing Makes a Kingdom-Difference

Millions of us use our “worldly wealth” as good stewards to further God’s Kingdom on earth by financially supporting churches, missionaries, ministries and other charitable organizations. At the same time, we carefully invest in seeking to establish a secure financial future for ourselves and our families.

Impact investing allows Christians to use our money to prepare for our tomorrow while investing in endeavors that make a meaningful difference in today’s world.

Impact investing is markedly different from Environmental, Social and Governance (ESG) investing. ESG investing emphasizes investing in companies that meet specific standards to encourage companies to act responsibly. Companies are evaluated based on their ESG scores and risk profiles. Those with poor scores are screened out of the investment pool by the investment manager.

Instead, impact investing allocates investments to companies striving to make a positive difference in the world. It addresses social challenges by financially supporting companies and organizations actively focused on furthering societal well-being through their products or services.

As Proverbs 3:27 reminds us, “When it is in your power, don’t withhold good from the one to whom it belongs” (CSB). Impact investing enables investors to directly align their financial goals with their personal values by putting their investing dollars to work in endeavors supporting the sanctity of life, human dignity, the stewardship of God’s creation and even the spread of the Gospel. For years, impact investing was only available to large-scale institutional investors. However, impact mutual funds now bring these opportunities to the traditional investor.

• Provide affordable rental housing and child-friendly communities for low-income women heads of household, which can encourage family stability and help counter one of the leading reasons women may choose abortion.
• Develop low-cost health care and clinical resources for senior citizens to promote the physical and emotional well-being of those often overlooked in society.
• Strive to enhance the efficiency and accessibility of life-sustaining resources such as water and land through developing water treatment and purification technologies.
• Provide loans to churches or Christian universities to expand their reach and influence for Christ.

So, how can an investor know an impact investment is aligned with their values and genuinely making a difference? Transparency and accountability are fundamental aspects of impact investing. The investment company should provide clear information regarding its strategies, mission, goals and measurable outcomes on its website, prospectus and other related materials. Periodically, they will provide updates on the difference their strategies have made in the local or global community. As an investor, you can incorporate these strategies into your portfolio with advanced knowledge of the manager’s intentions.

Impact investing can be another way — in addition to your tithes and offerings — to serve mankind in this world and further the cause of Christ.

Brandon Pizzurro leads the investment-related lines of business within GuideStone. In this capacity, he serves as President of both GuideStone Capital Management, LLC, the investment adviser to GuideStone Funds, and GuideStone Investment Services, which provides investment advisory services to nonprofit institutions. He is also an Interested Director of the Board of Directors of GuideStone Funds.

Investing involves risk. Principal loss is possible. Funds invested in accordance with the faith-based investment restrictions of GuideStone Financial Resources may not be able to take advantage of certain investment opportunities due to these restrictions, which may adversely affect investment performance.

The Fund’s impact investing criteria could cause it to perform differently compared to funds that do not apply such criteria. Successful application of the Fund’s impact investing strategy will depend upon the Adviser’s and each sub-adviser’s skill in properly identifying and analyzing impact investing issues. Investments made may not generate the amount of positive impact that was intended when the investment was made.

GuideStone Funds® shares are distributed by Foreside Funds Distributors LLC, not an advisor affiliate. GuideStone Capital Management, LLC®, an affiliate of GuideStone Financial Resources®, provides investment advisory services for the Funds.