Economists talk about “externalities” in markets. The cost of a good or service in economic models is the place where the demand for a product meets the supply of the product. The more people who want something and the less of it there is, the more it will cost. But this model takes into account only the value that a buyer is willing to pay a seller for the good or service. It does not include any other costs that occur in the larger system when that good or service is exchanged. There are often additional costs borne by people who are not involved at all in the initial transaction. They are called externalities. One externality is the environmental cost of oil extraction, which is not fully included in the price of oil. Another is the impact of air pollution that occurs when someone drives a car: this cost is not included in the purchase price of the car. The costs of these externalities are borne by the general public, vulnerable populations, the earth, and so on.

These externalities and other impacts are present wherever money is put to work. Even the term “externality” is not quite accurate because those impacts are not really external to the system. Rather they are part of the system. This is true in investing choices as well. While money itself may be neutral, the application of money in the world is never neutral. As Jed Emerson says, “capital is always at work, always in motion (1).” This reality should encourage us to be thoughtful and intentional about putting our money to work. Do we want our capital put to work by businesses seeking to create more needs among consumers that they can meet with the latest product, or could our capital be better put to work meeting the many pressing needs that already exist in our communities?

Impact across the Life Cycle of Money

The way we interact with money matters. It is not neutral. This is true in all four parts of what I call the life cycle of money—earning, giving, spending, and saving.

We have talked a fair bit in the church about the theology around earning money—the theology of vocation. Are some jobs and ways of earning money less faithful to the way God has created us to live than others? Should we avoid jobs that exploit and damage others or the earth? Running a sweatshop and building weapons of war are some examples that provoke thought.

We’ve talked a lot about giving money away, about philanthropy. Stewardship is a very well-developed field in the church. There are many excellent books, seminars, conferences, and resources exploring the theology and practice of fund-raising and stewardship.

And more recently we’ve grown a lot in our thinking about spending money—after all, it was churches who started the fair-trade movement and raised awareness about how our buying choices influence lives around the world. It is common to find fair-trade coffee served in the fellowship halls of churches after worship.

But in many ways we’ve neglected the conversation about the impact of our saved money in the church. We will spend much time and effort ensuring that the $1,000 worth of coffee we buy each year for fellowship hour is fair trade, but we don’t give much thought to what the $100,000 endowment we have invested in the stock market is doing. By and large, we are content to take high returns from whoever will give them to us without giving much thought to the impact of that capital in the world. If it is true that we put our money where our mouth is, it appears that right now we have more faith in Mark Zuckerberg than in our own people and communities. As Paul Sparks, Tim Soerens, and Dwight Friesen, founders of the Parish Collective, remind us: “Economics functions as a mirror where the truth about your faith is reflected back. The spreadsheet is a theological statement—where your treasure is, there your heart is also (2).” This is true in all four areas of the life cycle of money. It is vital that we give deeper consideration to the saving/investing phase.

Lynne Twist uses the metaphor of water when she explores “the soul of money (3).” Money, like water, flows through our lives, neighborhoods, and ecosystems. Sometimes it comes in a flood—there is lots of it—and sometimes in a trickle, when there is only a little. And like water, money can bring life and growth where it is allowed to flow. But if it is held back and dammed up, it gets stale and toxic. As Jesus demonstrates in the parable of the rich fool found in the Gospel of Luke, money produces nothing good for anyone when it is held onto too tightly.

The source of both money and water affects the health of what it does in the world. Brackish or polluted water from upstream will kill everything downstream. The same is true with money. The outflow of money is not only important; the source of that money is as well. If that source, how the money is earned, is not healthy, then its impact will not be good for the larger ecosystem even if the earnings are put to good use. The good that money may produce downstream can be undone, or even outdone, by the damage caused in making that money upstream. This is particularly true in how money makes money—in other words, in investing.

What impact is your money having in the world right now?

In 2013 the archbishop of Canterbury, the senior bishop of the Church of England, rolled out an ambitious plan to put predatory payday lenders in the United Kingdom out of business. One of the worst offenders, Wonga, charged customers seeking short-term payday loans interest rates as high as 5,853 percent APR (annual percentage rate). (That comma is not a typo; Wonga was charging an interest rate of almost 6,000 percent.) Deeming this practice unethical, the church sought to support community financial institutions in order to encourage alternative lenders and with the goal of eventually putting Wonga out of business. But this worthy effort was undermined when it was revealed that the Church of England had invested some endowment funds in Wonga. So the church was making money off of the very same exploitative business it was trying to eradicate. Money the church was using for its mission downstream was polluted by the source upstream.Their investment choices were not neutral. Simply making as much money as possible, by whatever investment strategy is most lucrative, is not always the right choice.

A recognition of the importance of how money originates has led to the socially conscious screened-investing movement that has gained more traction than direct impact investing in the church (4). Many endowments screen out “bad” companies from their investment portfolio—what are sometimes called “sin stocks.” Tobacco, weapons, gambling, and alcohol were eliminated early on. Some investors have moved to screening out fossil fuel companies, those that sell bulldozers that Israel uses to build walls in disputed territory, companies that treat workers poorly, and so on.

Often screened portfolios move heavily into so-called clean investments in technology—Amazon, Apple, Facebook, Google. But given what we are learning about the addictive qualities of Facebook, the environmental impact of the materials going into iPhones, and questionable behavior of Amazon in the marketplace, are these companies really clean? While it is vital to ask how “clean” an investment is, and screening our investments is essential, simply removing the worst companies from an investment portfolio still leaves most of our capital working to grow business and not making a positive impact in people’s lives.

This is true even if we just put our money in the bank. The bank doesn’t store it in a vault in the back. It immediately lends it out or invests it. Unless we literally put our money under a mattress, it is at work having an impact every single minute of every single day. Put another way: “Do you know where your money spends the night?” What impact is your capital having in the world right now?

1 Jed Emerson, The Purpose of Capital: Elements of Impact, Financial Flows, and Natural Being (San Francisco: Blended Value, 2018), 224.

2 Paul Sparks, Tim Soerens, and Dwight Friesen, The New Parish: How Neighborhood Churches Are Transforming Mission, Discipleship, and Community (Downers Grove, IL: InterVarsity, 2014), 97.

3 Lynne Twist, The Soul of Money: Transforming Your Relationship with Money and Life (New York: Norton, 2017), 102–3.

4 Often referred to as SRI (socially responsible investing) or ESG (environmental, social, governance screening).

Content taken from We Aren’t Broke: Uncovering Hidden Resources for Mission and Ministry by Mark Elsdon ©2021 (Wm. B. Eerdmans Publishing Co.) Reprinted by permission of the publisher.