There was an interesting piece in the July 17th issue of Barron’s about so-called “faith-based” mutual funds. The basic idea of such a fund is that the fund screens the companies in which they invest on considerations over and above financial grounds, namely, moral considerations. The only reason I saw this article is because Ave Maria Funds sent it out as a part of a mailing because the article speaks favorably of Ave Maria’s family of funds.

The principle of such a fund seems to be sound, morally speaking, and these funds have found a good number of investors. We don’t want our money working for abortion mills and pornography, right? Well, these would be among some of the criteria which a faith-based fund uses in deciding about companies worthy of investment. And, really, when one has the option to invest in a morally responsible way, why wouldn’t one do it?

Of course, one could always worry about a kind of slippery slope in these money matters. Should I refuse to buy products, such a mouth wash, from a company which also makes contraceptives? Given the way money and corporations are intertwined in America, I don’t see how one could avoid benefiting, if only indirectly, companies whose policies or products are morally objectionable. The reductio ad absurdum would then go, ergo, I needn’t worry about where my savings goes either or by what companies’ growth it benefits.

But I don’t think that this is a good objection. At the very least, we ought to start by investing in companies that aren’t up to bad things, especially when those things are out there for all to know and we have clear choices.

I got a kick out of the various criteria which the funds discussed in the Barron’s piece use in discerning morally responsible investments. There is the Mennonite Mutual Aid Praxis funds; their criteria, “a holistic screen, based on six broad guidelines”, such as global justice, responsible management, and environmental stewardship. Since I spontaneously vomit when I hear the catch phrase, “global justice,” this would not be a fund for me. The article goes on to say of this family of funds: “Although they eliminate alcohol, tobacco and gambling stocks, the funds don’t screen for Planned Parenthood contributions, and their abortion prohibition is limited to companies that make drugs used to induce abortions.” So the Quakers (or their money managers) are cool with abortion; different folks, different strokes.

The first “faith-based fund” I knew about was the so-called Timothy Plan, named after some verses from an epistle of the same name. Here’s the low-down on them: “They don’t screen out polluters, but nixed are businesses that contribute to Planned Parenthood or are linked to abortion, pornography, ‘anti-family’ entertainment, alcohol, tobacco, gambling or homosexuality. But ‘we are not homophobes,’ says Arthur Ally, who notes that, unlike many other faith-based funds, his don’t exclude businesses that offer health-care benefits to same-sex partners.”

Maybe someone can explain that one to me, because I don’t quite see it. They’re against businesses which are linked to “homosexuality” but they’re not homophobes, mind you, and they’re all for same-sex partner benefits. Supposedly, this family of funds is based on “fundamentalist Christian beliefs”, but I ain’t never see anything about benefits for same-sex partners in the Bible - I don’t know about you. Looks like typical protestant silliness.

This third family of funds is rather entertaining, at least what a spokesman had to say about its investing policy. I had no idea that there is a family of funds based on Islamic religious thinking and based in this country, as far as I can tell. Barron’s says that it, along with the Ave Maria funds, are the two notable performers in the category of faith-based funds. Here’s the story with Amana:

Manager Nicholas Kaiser (the fund’s only non-Islamic director) says their prohibitions cover about half of the 4,100 U.S. and foreign companies large enough to warrant consideration. “One Islamic scholar told me he didn’t think we should invest in companies that had debt,” says Kaiser. “So we screened that S&P 500 and found 35 companies that met that criterion. Another said he didn’t like companies with a lot of cash, because it probably meant they were loaning it out and getting interest. I ran another screen and said, Okay guys, we’re down to zero.’” The fund now allows up to a 30% debt-to-equity ratio, based on a 12-month moving average.

Ah, I pine for the glory days of Islamic intellectual life; today they’re telling people to invest in companies with no debt and no cash. Brilliant! It took the one non-Mohammedan on the board to help them out of that one. Still, apparently they’re doing well for themselves.

Now the Ave Maria family of funds is both Catholic and doing well. Cardinal Maida sits on the board. The screening policy is to exclude companies involved in “abortion and pornography and those that contribute to Planned Parenthood or offer employees nonmarital-partner benefits. . . . The abortion restriction is broad, applying to any store that dispenses, or any company that makes, birth control pills, which the advisory board considers a form of abortion.”

I have my meagre monies with the Ave Maria funds. The only sad thing about the business is that they’re such a neo-con, neo-order operation, with that goofball Monaghan, of the Ave Maria universities, as one of their principal investors and board members. Still, perhaps that’s what those folks do best, manage the money, and they provide a good service to the rest of us who want to save/invest money without supporting abortion, pornography, and sodomites.

I know that money can be a sensitive business, but I do think that Catholics, whether they have a lot or a little, ought to think about where their money is going, especially when they can have some control over the matter in the way that these funds make possible. I don’t know if there are other Catholic fund familes out there, but I’d recommend throwing in your lot with Ave Maria before going in with the Musselmen, even if they’re doing well, too. : )

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