Why Faith-based Organizations are Shifting to Impact Investing

Tuesday, November 6, 2018

Faith-based organizations are increasingly investing in socially and environmentally responsible causes. A 2010 global study of faith institutions showed that 77% of 103 respondents practice impact investing. At the Franciscan Sisters of Mary, or FSM, a Roman Catholic group based in St. Louis, Mo., its CEO and CFO John O’Shaughnessy is finding that such impact investing also generates attractive returns. The organization is “geared toward reversing the devastating effects of climate change, advancing sustainable land management, and providing clean energy access in places where power generation typically does not exist,” it says on its website.

FSM traces its origins to six women who fled religious persecution in Europe 146 years ago and landed on the St. Louis riverfront and formed a faith-based community. “Back then, FSM served the sick, the poor and other vulnerable sections in their community,” said O’Shaughnessy. “We had been doing socially responsible investing by screening out companies that were not aligned with our mission, voting proxies, some shareholder engagement, some investment in community development and housing loan funds, but we really weren’t measuring up to what our guidelines said we should be doing.”

FSM had an epiphany of sorts in 2009 when it went looking to see how it could “be doing more positive things.” O’Shaughnessy said FSM “discovered that there was this burgeoning space out there with people who were doing impact and mission-related investing well beyond what we were doing.”

Source: Knowledge@Wharton (link opens in a new window)

ESG, impact investing, philanthropy