By Barb Arland-Fye
Christian Brothers Investment Services, a professional firm that works exclusively with socially responsible investments, is managing investments for the Catholic Foundation for the Diocese of Davenport.
The Catholic Foundation, established in 2009, encourages, accepts and manages gifts — including funds pledged to the diocesan capital campaign — to foster stewardship and advance the diocese’s mission. Seminarian education, deacon formation, health care for priests unable to minister, diocesan operations, Catholic schools, social action and faith formation benefit from the foundation.
The first funds will come from the diocesan capital campaign, which has generated $18 million in pledges to date. It will take five years to realize most of those pledges, a portion of which will go toward parishes and paying back the loan for the purchase of diocesan headquarters.
“Our foundation investment policies call for socially responsible investing,” explained Sister Laura Goedken, OP, diocesan development director. “The Christian Brothers specialize in this for Catholic non-profits and they get competitive returns.”
She noted that the Catholic Church has been interested in socially responsible investing since the early 1970s, when religious congregations of men and women saw the need to set up a retirement fund for their members.
“These congregations also wanted to make their money work in promoting their mission. Leadership in these congregations studied the mission of corporations before holding their stock. They wanted to invest in companies that protected and enhanced human life and the planet. The United States Conference of Catholic Bishops established its socially responsible investing policies in 1992. Dioceses in the United States follow these policies,” Sr. Goedken said.
So why doesn’t the Catholic Foundation make its own investment decisions?
“Investing in securities takes time and expertise which we do not have on staff. Most individuals and organizations rely on investors to do their investing,” she said.
“Even though we have an Investment Committee, we have chosen to use a professional firm that works exclusively with socially responsible investments and has long-term audited performance records on many styles of investment,” said Stan Reeg, who serves on the Catholic Foundation Board. He is employed as branch manager, managing director — investments with Wells Fargo Advisors.
Christian Brothers Investment Services (CBIS) has been in the advisory business since 1981 and manages in excess of $3 billion. “Many of their investment choices have more than a 10-year track record of performance that is audited,” Reeg said.
The Catholic Foundation will pay approximately eight-tenths of a percent of its investments annually for CBIS to manage its investments. Those fees are very competitive “as we are treated like an institutional investor,” he added.
CBIS representatives met in late April with several Catholic Foundation board members and representatives of The Catholic Messenger and St. Vincent’s Home Corporation. The latter two nonprofits, affiliated with the diocese, also are investing funds with CBIS. They are being advised on their investment options by the Catholic Foundation’s Investment Committee.
Investment decisions made by CBIS follow Catholic teaching, the firm’s representatives said. The big issue is human rights, and human trafficking went to the top of the list in interest among shareholders. Other issues CBIS screens for are defense, pornography, tobacco and life ethics (embryonic stem cell research, abortion). The firm works in dialogue with companies to talk about changing activities or seeks resolutions to be put on proxy statements concerning objectionable activities in which the companies may be involved. In gray areas — where a company might be involved in noble pursuits but indirectly supporting morally objectionable activities — CBIS is very pro-active, Reeg said.
CBIS will daily monitor the companies in which the Catholic Foundation’s funds are invested through its research division. The foundation has the right to decline any of the funds CBIS has to offer. When asked who defines ethical behavior, Reeg said both CBIS and the Catholic Foundation. “CBIS follows the U.S. Conference of Catholic Bishops, so we have the same definitions,” Sr. Goedken said.
The Catholic Foundation is willing to accept a lower return on investment for the sake of social justice, Reeg said. But, “by investing with CBIS, we don’t believe we will need to take a lower rate of return,” Sr. Goedken added.
