Corporate Investments, Ethics, and Evangelical Poverty: A Challenge to American Religious Orders

Abstract

During the past three or four years an intense debate and self-examination has been underway in the American churches over the question of the ethics of church investment. The discussion has been brought about by a growing realization that the way the American economy functions is intimately intertwined with the freedom and well-being of men and women in the United States and in the poor nations of the world. The concern of the churches to aid in the attainment of a just society and to provide moral leadership based on the message of Christ has made this discussion an inevitable development in our increasingly interdependent society. Also, because the relationship between social responsibility and investment mores challenges the churches to address evolving social structures and social values in an innovative way, this development is highly significant for the future shape of the churchsociety relationship. It would not be extreme, I believe, to compare the present state of the movement for social responsibility in investments to the early days of the involvement of the churches in the American labor movement.The issue of what the church should or should not do with its investment funds is a highly complex one. It involves the disciplines of economics, finance, and law. Any concerted effort by the church to deal with this question in a sustained and systematic way will require reliance on the expertise of persons trained in these fields who are at the same time trained in and sensitive to the ethical questions which are at the heart of our modern economy. But the knowledge of law and economics is not sufficient. There are ethical, theological, and religious questions which themselves must be dealt with in evolving an appropriate stance for the church in the United States. This article will try to clarify a few of these ethical and religious matters for one segment of the Roman Catholic Church: orders or congregations of religious men or women who have committed themselves to a particular style of the Christian life through the vow of evangelical poverty.How much money the religious congregations of the United States have invested in stocks and other securities is difficult to determine. The amount varies greatly from order to order, and the highly decentralized financial organization of the American Catholic Church puts all attempts to discover the amount on shaky ground. In his recent and lively study of the wealth and financial power of the Catholic Church in the U.S., James Gollin estimates that the holdings of the 8 Codex juris canonici, canon 1523. The translation is that of John A. Abbo and Jerome D. Hannan, The Sacred Canons: A Concise Presentation of the Current Disciplinary Norms of the Church 2 (rev. ed.; St.

Social Shareholder Engagement: The Dynamics of Voice and Exit

“…However this research does not go far enough to fully explain the exit choices in SSE. Hollenbach (1973) describes the vastly different considerations faced by religious organisations suggesting that 'exit' may be used to relieve guilt and enhance feelings of purity and righteousness by not being involved in any companies which do not meet their strict social, environmental or ethical criteria.…”

“…However, research into the salience of shareholders has demonstrated that this traditional source of power is not usually available to shareholders undertaking SSE (Gifford 2010, Lee and Lounsbury 2011) who tend to be smaller (Clark et al 2008). Furthermore in SSE voice can be interpreted as social action and can be used for the pursuit of justice (Hollenbach 1973) or for wider social change (Proffitt andSpicer 2006, Sjöström 2010), with the financial impact being relatively inconsequential for smaller holdings typical of SSE (Clark et al 2008). We suggest that SSE, characterised by smaller, principle-based actors, involves a greater complexity in the use of voice or exit than the corporate governance literature to date indicates.…”

God's fund managers

“…Our churches employed a "softer" approach, mentioning and suggesting improvements, but without setting demands or deadlines. While this approach seems inconsistent with a policy of engagement, there is a more fundamental issue here that relates to what churches should or should not do with their funds (Hollenbach, 1973). The rationalisations by the fund managers seem to indicate that the funds themselves are not only viewed as a source of finance for the churches' operations but are also seen as a vehicle for pursuing the churches' socio-religious objectives.…”

“…Attempting to maintain the purity of a portfolio by excluding unethical companies may actually be antithetical to the churches objectives and may also hint at an overly simplistic view of both corporations and the socio-economic structures of which they are a part. Hollenbach (1973), for example, comments:…”

“…The predisposition of a church towards a policy of, "purity" or "engagement" will be determined by the theological beliefs in relation to the church/society relationship of particular denominations (Hollenbach, 1973;Cowton, 1990). However, the more church funds are conceptualised as a medium for pursuing that church's mission as opposed to simply financing it, the less tenable current ethical investment models become.…”