Author's note: Please don't construe any mention of any company in this article as an endorsement by Boundless, its parent company, its employees, the author or the author's two adorable children. All investments involve risk. So be a wise steward. When selecting investments, you should consider the investment objectives, risks, and charges and expenses of the investment company carefully before investing. As painful as it is to read a prospectus (trust me, I know) and all those return charts, you really do need to know whether a fund you're considering has made a negative return over the last 10 years while charging a 20 percent management fee. Feel free to fill in any legal verbosity I forgot right here....

Editor's note: Past performance is no guarantee of future returns.

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Would you work for Playboy magazine? Probably not.

Would you buy a Playboy magazine? Let's hope not.

But are you supporting Playboy magazine financially anyway?

No way, you say.

Not so fast. Have you checked your 401(k)?

Does that index fund you hold in your retirement account include a stock with the New York Stock Exchange (NYSE) ticker "PLA"? If so, you are a part owner of, that's right, Playboy. Not that you'll be getting invitations to Hugh Hefner's mansion (and not that you want them). But a little bit of your money, however infinitesimal, is going to the Playboy conglomerate.

How would you feel if you found out that was the case? Would it bother you?

I have to admit that I've never really thought about my investment dollars in terms of morality. My mutual funds are just that: "mutual funds." I balance my diversification and juggle the percentages — but I've never thought much about which companies the funds hold or who I might be supporting.

But a growing number of Christians are wrestling with that question: Are my investment dollars going to support companies which I, as a Christian, am against? And if they are, is that OK?

Some have answered no. They've decided that they cannot, in good conscience, contribute any money to companies that promote immorality.

Others have answered — well, yes and no. They believe that while Christians should avoid "direct" involvement with immoral activities and companies, that making minute moral choices within the stock market is next to impossible and not a biblical mandate.

Have you thought about where you stand? Here's some of the arguments from both sides.

Absolutely Not

For those who don't want to invest in morally questionable companies, two reasons usually come to the forefront: personal conscience and societal change.

First, they don't want their money going to companies that promote, well, let's just say it — sin.

"People are learning that it really does matter where you invest your money," Arthur Ally, the president of The Timothy Plan family of mutual funds, told Business Week. The Timothy Plan is a mutual fund group that describes itself as "America's first pro-life, pro-family, biblically-based mutual fund group." The fund "screens" companies for involvement with alcohol, tobacco, gambling, abortion or promotion of a homosexual agenda. Any company failing the screen, fails to get Timothy Plan's investment dollars.

"By using this methodology," its web site states, "investors can choose to honor their moral conviction with their investments without sacrificing investment return opportunities."

Of course, even among faith-based funds, there are differences.

For example, the Guidestone family of funds, associated with the Southern Baptist denomination, uses screens similar to those of The Timothy Plan. The Aquinas family of funds, which seeks to promote Catholic family values, screens for a company's involvement with abortion, but adds screens for human rights and environmental responsibility. The New Covenant Funds, associated with the Presbyterian denomination, screen for alcohol, gambling, tobacco, firearms and top defense weapons contractors.

Before investing in a faith-based fund, Christians need to make sure that their values are compatible with their chosen fund.

But beyond just keeping their money in moral companies, many Christians choose faith-based funds as a tool for societal change.

"The culture war has a new battlefront," declares the web site of The Timothy Plan. That new battlefront? Wall Street.

Pointing out that politically left activists have long used their influence as shareholders to influence corporate policy, the web site encourages Christians to use this influence as well.

"Boycotting alone is a commendable yet incomplete action," The Timothy Plan Web site states. "Boycotting coupled with the avoidance of stock or bond ownership of such companies is a much more effective approach."

In a Timothy Plan press release about Ford Motor Company's support of homosexual lifestyles, Arthur Ally pointed out that if statistics from Barna and the Investment Company Institute are correct, then approximately 40 million Christians invest over 4 trillion dollars in mutual funds.

"Once these Christians discover the collective power they can effectively have on corporate America, by voting with their investment dollars, companies like Ford will no longer blatantly disregard the concerns of their shareholders," he stated. "I believe you could see positive cultural change in America come from Wall Street long before it comes from the White House."

Not So Absolute

There are some, however, who don't see the issue as black and white.

Sound Mind Investing, which describes itself as "the web home of America's best-selling financial newsletter written from a biblical perspective," does not place a major emphasis on the use of what they term "SRI" (or socially responsible investing) funds.

Why not?

In an article titled "The Debate Over Where to Draw the Line," Austin Pryor, the investment adviser who publishes Sound Mind Investing's newsletter, explains: "The important stewardship issue for me is that I don't directly involve myself with morally questionable enterprises in [four areas] — my work, my spending, my investing and my giving."

Pryor gives an example of how he would avoid "direct involvement" in those four areas using Philip Morris (remember them from the tobacco lawsuits?). At the time that Pryor wrote his article, Philip Morris, the nation's largest cigarette manufacturer, was the owner of Miller Brewing and also of Kraft Foods.¹ Almost every "SRI" or faith-based fund would blackball Philip Morris because of its tobacco and alcohol production.²

Here's how Pryor would attack his stewardship in the area of working: "Because I want to avoid actively contributing to the production and sale of harmful products, I wouldn't take a job at Philip Morris," Pryor points out. "But because the products of Kraft Foods are generally useful, I would be willing to work there."

In the spending category, Pryor states that he wouldn't buy Marlboros, but wouldn't have a problem buying Kraft cheese, or Oreos, or Jell-O (all Kraft products) — even though his Oreo money might help keep Philip Morris afloat.

Extending the philosophy to investing, Pryor states that he would not buy Philip Morris stock, but wouldn't pull out of a mutual fund simply because it held some Philip Morris stock: "To me, there's a difference between making a direct conscious attempt to profit from the sale of tobacco products versus the indirect, incidental contact I might have with Philip Morris when I'm only trying to invest in a diversified portfolio of stocks."

The Debate Continues

But simply because it is difficult to screen out immorally behaving companies, doesn't mean we shouldn't try it, say those who support the faith-based funds.

"But when God commands, 'Do not share in the sins of others, keep yourself pure' (1 Tim. 5:22), he does not add, 'unless it's impossible; then give up trying altogether,'" The Timothy Plan Web site quotes Mary Naber of FaithfulSteward.org saying. "While Christians may never be 100 percent pure in a given area, the inability to achieve perfection has never excused us from an honest and enthusiastic pursuit."

Pryor agrees, sort of:

"Am I saying that 'If you can't do it perfectly, then don't even make an attempt'? Of course not.... Far be it from us as Christians, who are responsible for handling God's wealth for God's glory, that we should provide direct financial support to the very people and institutions whose activities are undermining the biblical values we hold dear."

He continues:

"With respect to the things that you cannot do perfectly, such as avoiding all indirect involvement or support in your spending and investing, do what you reasonably can while keeping your stewardship responsibilities in balance. In the investing sphere, faith-based SRI funds are tools that can help."

As for me, I'm glad that Christian values funds exist and are growing. According to an NPR story from last November, "The [mutual fund] industry's faith-based arm is thriving, growing 4 times as fast as the overall mutual fund industry in the last 6 years." And I'm thrilled that Christians — including myself — are being challenged to ask the hard questions about our money.

And I'm off to check my 401(k) for that PLA stock right now.

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NOTES

1. Philip Morris has since changed its parent company name to Altria and has spun-off Kraft Foods.
2. Today, The Timothy Plan lists Altria on its "Hall of Shame"