'Holy Escape Clauses' Reconcile Profits with Religion for Investors

Gerald L. Zelizer

Today's investor needs only discretionary cash and sound stock picks to reap the benefits of a stock market that Monday soared above 11,000 on the Dow.

A person of religion, though, is confronted with additional considerations. Investors of faith must mesh their new affluence with the realization that 35 million Americans worry not about company earnings, but minimum sustenance. They also must reconcile the fact that many religions condemn the accumulation of wealth.

"In our time, the struggle of mercy is not against rigid and inflexible morality," wrote Thomas Merton, "but against a different and more subtle hardening of heart, a general loss of trust and of love that is rooted in greed and belief in money.''

So how do people of faith today balance profits and prophecy? They can benefit, with moral impunity, because of "holy escape clauses." Without these mechanisms, the contradiction would be too great.

For example, many of the faithful rich reconcile it in personal ways.

Roger Enrico, chairman and chief executive officer of PepsiCo Inc., recently volunteered to reduce his salary to $1 and asked that $1 million instead be contributed annually for a scholarship program for the children of full-time employees.

Millard Fuller, owner of land, homes and speedboats, simply gave away his entire fortune to establish Habitat for Humanity, an international network of organizations building housing "for God's people in need." He concluded that "you cannot serve God and money."

Beyond the personal, though, the reconciliation of religion and stock market earnings is possible through "sacred cleansing agents." One agent is religious philosophies, such as stewardship in Christianity, that teach that we are trustees managing God's riches.

Princeton University sociologist Viviana Zelizer (yes, related) explains in her book, The Social Meaning of Money, how money, far from being a homogenous, impersonal and solely economic instrument, actually becomes diversified and personalized in the way it is spent.

One way is by giving some of it to the poor.

For example, the Islamic principle of zakat stipulates that monetary accumulation is legitimate as long as at least 2.5% of yearly capital is earmarked for the destitute. Christmas income of the Salvation Army has burgeoned by 58% over three years. The United Jewish Appeal, which subsidizes many of the internal philanthropic projects within local Jewish communities, raised $763 million in 1998 compared to $715 million in 1993. The Mennonite's MMA Praxis Mutual Funds include an income-tithing plan that facilitates the automatic transfer of dividends to charity. The poor are being pulled upward by our portfolios.

Similarly, by giving money to the religious institutions that convey the message of reconciling profits and prophecy, we are bolstering the messengers.

Annual contributions to the Jewish Theological Seminary, a pre-eminent graduate and rabbinical school in New York City, increased by 20% during the past four years. The Presbyterian Foundation has enjoyed a tenfold increase in trusts and direct giving in the past decade.

Finally, there are clean profits vs. dirty profits. When investors exclude certain spiritually illegitimate instruments from their portfolios, they legitimize the ones that remain.

In 1998, there were 34 "religious mutual funds," compared to three in 1985 and just one in 1970, according to Wiesenberger, a financial data reporting service. Islamic funds screen out financial service stocks because the Koran prohibits charging interest on loans. Catholic funds avoid drug companies that support abortion. Christian Scientists don't invest in the medical industry. And most, if not all, religion-based funds avoid any whiff of pornography.

Furthermore, investors in religious funds, which frequently lag behind the general market, have diminished their returns because of their principled investment strategy. Alcohol, tobacco, gambling and other "sin" stocks, among the most profitable, are excluded from their portfolios.

Religion that would exclude all wealth is simplistic and utopian, while that which would permit unrestricted investment strategies is hypocritical. Authentic, livable religion allows its adherent to participate in a burgeoning market, while simultaneously tempering greed by limiting and channeling profits. In this way, the believer can reap the benefits of our economic system and also remain loyal to the noblest principles of his faith.