Jim Lake, a religious Christian in Washington state, stated his non secular beliefs have at all times made him against practices corresponding to abortion, transgender transitions or embryonic stem cell analysis. However till this previous 12 months, it didn’t cross the retiree’s thoughts that he may put his cash to work along with his religion.
A monetary adviser switched Lake’s portfolio over to a handful of faith-friendly funds, considered one of which was run by GuideStone Funds, a 106-year-old funding agency in Texas that oversees some $24 billion in property. The corporate caters to Southern Baptist retirees and, more and more, newly lively faith-based buyers corresponding to Lake and his spouse.
GuideStone is a part of a nascent coalition of conservative Christian buyers which might be beginning to flex their muscle tissue and use their shareholder clout to counter progressive company insurance policies corresponding to funding Satisfaction parades or overlaying workers’ journey prices for abortions. They’re additionally zeroing in on banks for allegedly closing buyer accounts on political and non secular grounds.
By some measures, there’s now half a trillion {dollars} in investments unfold throughout conservative faith-based personal funds and state pension funds that may be dropped at bear to affect firm habits, stated Will Lofland, who oversees shareholder advocacy at GuideStone. The free confederation consists of Encourage Investing, the largest faith-based exchange-traded fund supervisor; Republican state treasurers and trainer pension funds; and Alliance Defending Freedom, an influential conservative authorized group.
As they entice extra money, members of the coalition are assembly with company executives and submitting shareholder proposals. They’ve had restricted success up to now, but purpose to construct their bloc of supporters and goal extra firms this 12 months, Lofland stated.
The buyers “wish to honor the Lord with all of their assets,” he stated. “They need their {dollars} being invested in what they imagine is the God-honoring manner.”
Spiritual investing has been round for many years, usually with a give attention to extra liberal points corresponding to employee rights and local weather change. However funds corresponding to GuideStone have been emboldened by the rightward shift of US politics and the wave of conservative activists and legal professionals who’ve already pushed firms to curtail or finish applications that help variety, fairness and inclusion efforts. Many level to anti-DEI activist Robby Starbuck, a non-denominational Christian, and his success in getting firms corresponding to Walmart Inc., Toyota Motor Corp. and Harley-Davidson Inc. to backtrack on initiatives — notably these associated to LGBTQ causes.
Amongst on a regular basis buyers, there may be rising curiosity in religious-based funds, stated Tim Macready, head of worldwide multi asset investing at Brightlight, which advises buyers on faith-based portfolios.
Property in faith-friendly ETFs and mutual funds exceeded $100 billion for the primary time final 12 months, in keeping with annual research carried out by the agency. The evaluation, compiled from 27 faith-based asset mangers, possible captures solely a portion of the exercise. The total universe may vary from $200 billion to $500 billion, Macready stated. Internet inflows have been 12% over the past three years, he stated.
One broker-dealer went from 200 advisers working with GuideStone in 2021 to greater than 2,000 now, Lofland stated. Encourage stated it had web new property of $334 million final 12 months.
GuideStone’s largest fund, the GuideStone Fairness Index Fund, gained 20% final 12 months, barely underperforming the S&P 500 Index.
Lake, a 64-year-old resident of 9 Mile Falls, Washington, invested with GuideStone after being launched to an adviser whose sole apply is working with folks investing in faith-friendly funds.
“It actually opened up my eyes to the flexibility to stay faith-friendly and on the identical time, be aggressive,” Lake stated.
Constructing a Bloc
GuideStone operates out of a nondescript workplace constructing overlooking a freeway in northern Dallas, and maintained such a low profile that Lofland stated he didn’t know concerning the funds till he utilized to work there. The agency primarily manages pension investments for Baptist church buildings, but Lofland noticed a chance to grow to be extra lively.
Shareholder proposals from progressive teams, some pushing concepts corresponding to transgender advantages opposite to the church’s values, began to proliferate a number of years in the past and GuideStone wasn’t voting its shares to oppose such measures, Lofland stated. He determined to take management of how GuideStone voted on the shares it owns in firms relatively than counting on outdoors advisers.
One of many investor’s first efforts was in late 2023, when it backed a shareholder proposal from a conservative group asking Microsoft Corp. to report on compensation and profit gaps throughout genders as the corporate addressed reproductive and gender dysphoria care. The decision received only one% of votes. (Bloomberg Intelligence says total help for conservative proposals at US firms is just about 2%.)
Lofland says that’s why the non secular funds must construct a much bigger group of supporters, notably from pension funds from conservative states. Such buyers have already carried out some agitating of their very own: Final 12 months, finance officers from 15 states signed a letter to Fortune 1000 firms in help of ending DEI applications. Collectively, they managed about $590 billion, in keeping with US Census information.
That kind of firepower is required to counter efforts which have sturdy progressive backing. In July, New York Metropolis Comptroller Brad Lander urged 5 massive retailers, together with Walmart and Costco Wholesale Corp., to dispense abortion pills. Metropolis funds managed $1.3 billion in shares of these firms, he stated. A coalition of conservatives and non secular buyers, together with Encourage and GuideStone, responded with their very own letter the next month saying providing the tablet would add threat, however solely represented $172 million in shares of these retailers.
Lofland stated GuideStone’s first initiative in 2025 can be to press a monetary agency concerning the apply of debanking — the closure of buyer accounts which might be deemed by lenders to pose authorized or reputational dangers. He declined to call the financial institution.
GuideStone had beforehand supported different group’s efforts to stress JPMorgan Chase & Co. after the lender was accused of improperly closing accounts for the nonprofit Nationwide Committee for Spiritual Freedom. Michael Fusco, a spokesman for the financial institution, stated “now we have by no means and would by no means shut an account for political or non secular causes, interval.”
Lawsuits, Proxy Votes
Encourage Investing and Knights of Columbus are amongst different faith-based buyers working to affect company habits.
Encourage joined a 2023 lawsuit filed by a gaggle run by Trump advisor Stephen Miller in opposition to Goal Corp. that accuses the retailer of costing buyers billions of {dollars} after its sale of LGBTQ merchandise led to a shopper boycott. Final month, a federal decide denied a movement to dismiss the case and alter its venue out of Florida. Goal, which in response reduce LGBTQ-themed merchandise from some its shops, declined to remark.
Encourage, which oversees about $3.2 billion, final 12 months filed nearly two dozen shareholder resolutions over DEI matters. It plans to file extra in 2025.
“As stewards of what we imagine are God’s {dollars}, it’s our job to talk Biblical reality to company energy,” stated Robert Netzly, founding father of the Meridian, Idaho-based funding agency.
Knights of Columbus is working to develop proxy voting guidelines that observe pointers established by the US Convention of Catholic Bishops, stated Anthony Minopoli, president and chief funding officer of Knights of Columbus Asset Advisors, which manages about $28 billion. The group is partnering with the Busch Faculty of Enterprise on the Catholic College of America on the hassle, which goals to get Catholic dioceses to undertake the rules to make sure they’re voting based mostly on the beliefs of the church.
The group additionally will possible have interaction with firms on matters starting from abortion to the manufacture of land mines and cluster bombs, which violate church values as set ahead by USCCB, Minopoli stated.
Even when the coalitions of conservative and non secular teams don’t get sturdy shareholder help for his or her proposals, they may possible achieve swaying company executives, in keeping with Amelia Miazad, an performing legislation professor at College of California, Davis who’s researching a challenge on faith-based buyers. She likened the efforts to the backlash to environmental, social and governance methods, which has seen asset administration giants together with BlackRock Inc. reduce the variety of new funds with that mandate.
“If success means silencing company speech on environmental and social points, then these buyers can be as profitable because the anti-ESG motion has been,” she stated.
Photograph: Jim Lake Photographer: Margaret Albaugh/Bloomberg
Copyright 2025 Bloomberg.
