“Let your light shine before others, so that they may see your good works and give glory to your Father who is in heaven.” (Matthew 5:16 NIV)
How does Stewardship invest its funds?
Through the growth of our community and their generosity, total assets held by Stewardship exceeded £200m for the first time in 2021. A large proportion of this balance sheet represents funds entrusted to us by our givers.
We’ve recently launched our new Investment Policy. This explains how we are seeking to prioritise investments which align with our Christian values, bring glory to God and achieve both kingdom impact and financial return.
What is impact investment?
You’ve probably heard of ‘ethical investment’ or ‘Environmental, Social and Governance', often referred to as 'ESG'. This involves negative screening, to weed out investments which create social harm. At Stewardship, our policy is not to invest in companies with a substantial link to armaments, pornography, tobacco, gambling, high interest rate lending, alcohol, tar sands or thermal coal. We believe that investing in such activities, even if we use the proceeds to fund charitable work, would harm our Christian witness and dishonour God.
Impact investment, also called social investment, goes a step further. Instead of merely screening out investments which cause social harm, we proactively make investments which promote the Christian faith or more widely the common good of our society. For example, our Church and Charity Lending team strengthen churches and Christian ministries by making loans in support of building projects.
What about my Donor Advised Fund or Philanthropy Fund?
Perhaps you want to build up a balance in your Giving Account during your working lifetime so that you can continue to support your favourite causes during your retirement. Or perhaps you want to give a lump sum from a bonus or inheritance and then request regular support for Partners over a period of years. Have you considered how this balance could be put to kingdom use in the meantime?
In an era of high inflation, the funds in your Giving Account will achieve less Kingdom impact in the future than they would do if granted out now – you can read more about this in our blog. If you’re expecting to hold funds in your Giving Account for a few years or longer, you may wish to explore the Investment Options available for your account.
For Donor Advised Fund balances, we offer three Investment Options, including the Stewardship Responsible Investment Portfolio, a new fund advised by Cazenove Capital which aims to allocate a portion of the portfolio to impact investments that address environment and social needs aligned to the UN Sustainable Development Goals.
If you hold a Philanthropy Fund, you can nominate an investment for us to make using your balance. This might be a managed investment portfolio, or it might be a loan to a specific church or charity you want to support, perhaps at a concessionary interest rate.
But doesn’t the Parable of the Talents encourage us to focus on financial return?
In the Parable of the Talents (Matthew 25:14-30), Jesus encourages us to be good stewards of the resources God has entrusted to us, knowing that one day he will return as judge. One aspect of good stewardship is of course to seek an appropriate financial return. However, we also need to consider the non-financial consequences of an investment, whether good or bad.
As we steward our God-given resources, we need to consider whether our investment choices may in fact be furthering the problems our giving tries to solve. For example, are we donating to health charities whilst investing in tobacco, funding conservation whilst investing in polluters or aiding poverty relief whilst investing in predatory lenders?
Some impact investments will have target returns which match those of a traditional financial investment; others might involve accepting a lower rate of financial return or higher risk of financial loss in order to achieve kingdom impact consistently and not only at the point when the funds are granted out. Making an impact investment can even help your generosity to go further – once funds are repaid, they can be ‘recycled’ into another impact investment or used for grants.
How can I find out more?
If you’d like to discuss the investment options for your Donor Advised Fund or Philanthropy Fund, please contact the Philanthropy Services Team by email or on 020 8418 8896.
Rachel Steeden
Rachel is a solicitor with 17 years’ experience advising private clients and charities. She enjoys working closely with clients and their advisers to help donors make complex gifts effectively and tax-efficiently.
She is a member of the Charity Law Association, STEP Special Interest Group for Philanthropy, Lawyers in Charities and Lawyers’ Christian Fellowship. She is also on CityWealth's prestigious Top 10 Philanthropy Advisors 2024 list.
Rachel and her husband Derek lead a Bible study group at their church in central London.
They’re passionate about Church Planting in the UK and overseas, Bible translation and The Local Church.
