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A Living Tension

Quaker Values and Money

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Money and investing don’t always jump to mind when thinking or talking about Quaker values. In my experience, quite a few Friends discount, ignore, or regard as unsavory, all things money. And yet, money and investments are an integral part of our living in the world.

When Quaker values are actively applied in business, they can work toward the world we seek to create. If Friends avoid engaging with values around money, spending, and investing, we lose an important opportunity for witness in the world. As executive director of Friends Fiduciary Corporation for the past seven years, I have lived at the intersection of Quaker values and money, and I hope to share how one Quaker organization lives into this tension, and the importance of doing so. While the issues are the same for individuals, the special challenge that institutions face when engaging values and money is that there are typically many individuals involved—some Quaker and some not—each bringing their own personal values around money to the discussion.

While some might argue that today’s business world seems antithetical to Quaker values, as a business person, I strongly believe that Quaker values can be perfectly consistent with long‐term business success. This is borne out by a brief look at early Quaker businesses. Quakers have long been involved in business. In Pennsylvania, Quaker farmers, merchants, and skilled tradespeople wishing to participate in William Penn’s Holy Experiment brought their values to their work. As a result, some prospered financially. A number of factors likely contributed to this early success among some Friends, including their relative privilege as white people in colonial society. However, the application of Quaker values in their work was almost certainly a factor. Quaker entrepreneurs often succeeded because they were honest with their customers; they treated them fairly and equally, and applied these same values to their employees. In addition, they valued community and were aware of those less fortunate, as evidenced by the number of trusts and endowments benefiting the poor that were established by prosperous Friends.

Some Quaker organizations seem unwilling to make investments consistent with Quaker values, citing reticence to name those values and an unwillingness to lift up some values over others.

Tension Between Values and Money

It can be easy to “live one’s values” when there is little or no cost in doing so. In my work with Friends Fiduciary, I talk with many Quaker faith communities, Quaker schools, and Friends organizations across the country. I have seen a range of responses to engaging tension between values and money. Some organizations, including most meetings and churches, work to incorporate their Quaker values in the stewardship of their financial resources. This can take the form of careful discernment around budgeting, limiting the amounts of reserves, and sharing resources with other organizations in their communities. I also know of Quaker and Quaker‐affiliated organizations that seem to compartmentalize Quaker values, applying them perhaps in their classrooms, programs, and administration, but bypassing Quaker values when it comes to money and investments: in other words, when there’s a perceived cost for doing so.

This disconnect is often cast in terms of maximizing investment return so that the organization can do “more good.” For example, a school may believe that they must maximize their return on financial resources to provide the greatest number of scholarships to needy students. This is certainly an important and valid concern, and one that needs to be considered. I believe what should be equally considered is the values disconnect of investing a school’s endowment in tobacco companies or weapons contractors while promoting health and peace in the classroom.

Some Quaker organizations seem unwilling to make investments consistent with Quaker values, citing reticence to name those values and an unwillingness to lift up some values over others. I have been in meetings where staff or board members of these organizations indicate that a values‐based approach is a slippery slope, and rhetorically ask how one would determine the appropriate values and then apply them. These are important questions, and while they might be difficult, I think we have an obligation to engage with them. We can’t simply throw up our hands and give up when faced with difficult decisions that challenge the culture and Quakerliness of our affiliated institutions.

There is a fundamental question here about what is the greater good in the examples I’ve cited. I don’t claim to know the answer, but as a Quaker, it seems important to me that all Quaker organizations carefully weigh these issues and engage this tension even when it’s difficult or uncomfortable to do so. I believe that living with this tension is fundamentally Quaker. Quakers have a long history of living in tension, laboring one with another, and seeking to discern the truth in those areas where a single standard of truth might be obscured or seem impossible. We are seekers after all, and the revelation of the Light may become more fully available through the discernment of Friends in community over time.

As an investment manager serving nearly 400 Friends organizations, Friends Fiduciary works diligently to demonstrate that Quaker organizations can both incorporate their values in the stewardship of their financial resources and grow their investments to support their missions. We know that the traditional investment wisdom of choosing between values and excellent investment return is a false choice. This is not a theoretical claim, because Friends Fiduciary’s long‐term investment results prove that both can be achieved. Even with the application of our rigorous Quaker values screens, our investment results have consistently exceeded standard market indices. Certainly, there can be periods in which applying Quaker values can affect short‐term investment performance. However, over the long term there does not have to be a cost to a values‐based investing approach.

Fortunately, trends in the traditional investment industry are moving toward greater understanding of the business value of integrating environmental, social, and governance criteria in their investment process. Earlier this year the chief executive of BlackRock, the world’s largest money manager with $6 trillion, sent an open letter to CEOs of other public companies. Larry Fink told them that they have a responsibility not only to deliver profits, but also to make “a positive contribution to society.” It seems to me that traditional investment wisdom is finally beginning to catch up to our Quaker investment approach.

One example of discerning an emerging concern was Friends Fiduciary’s decision in 2013 to offer a fossil‐fuel‐free investment option, the Quaker Green Fund.

Quaker Values Investing

Defining Quaker values and then working to reflect those values in an investment process within our complex global financial markets is no small feat. There is great diversity among Friends—theologically, politically, and socially—and the absence of a central hierarchy or denominational authority across the various branches of the Religious Society of Friends makes it quite challenging to discern what constitutes Quaker values.

For its part, Friends Fiduciary uses broadly held Quaker values to guide its investment process. The rigorous, values‐based negative and positive screens are defined in the investment guidelines established by our all‐Quaker board of directors. Values also guide the types of acceptable investments (e.g., securities with underlying asset values versus purely speculative investments like derivatives). These guidelines have been crafted over years with careful discernment. They also reflect emerging concerns among Friends that have become broadly held. Our diverse Quaker board of directors is instrumental in this discernment, with the added advantage that each board member is also associated with one or more Quaker organizations served by Friends Fiduciary. As with any Quaker discernment process, there is refinement over time which reflects the continued working of the Spirit. Our work is further informed by our interaction with Friends across the Quaker spectrum. In 2017, our staff met with over 140 Quaker meetings, churches, and organizations, including both current and prospective investors. These interactions enable us to keep in touch with the Quaker grassroots and hear issues of interest and concern from a wide variety of Friends across the country.

One example of discerning an emerging concern was Friends Fiduciary’s decision in 2013 to offer a fossil‐fuel‐free investment option, the Quaker Green Fund. Recognizing the diversity of our constituent investors and having spoken with many (including at called sessions on this topic), our board decided to give all constituents an opportunity to opt into the Quaker Green Fund. This allowed each constituent group (monthly meeting, organization, etc.) to discern its own position on this issue, and it provided a solution for those who decided that they did not want to be invested in fossil fuels.

We often hear from companies that we are the first investors to raise a particular issue with them. I believe this is because our Quaker values lead us to focus on long‐term business sustainability and success.

Witnessing to Quaker Values with Corporations

Traditional investment managers and business people often talk about value add, value chains, and value for your money. They’re less comfortable, however, talking about social and human values. In our work at Friends Fiduciary, we cross that divide.

For me, one of the more exciting aspects of the Quaker investing approach at Friends Fiduciary is our commitment to shareholder engagement. As shareholders in various companies, Friends Fiduciary is an owner in the companies in which we invest, and as such, we have both ownership rights and responsibilities. As Quakers, we believe it is important to be active owners, and we engage with companies when we have concerns about their policies or practices. Accordingly, Friends Fiduciary votes on proposals at company annual meetings; shares our concerns with company management; and, when necessary, files shareholder resolutions, all to effect change in the company. Choosing to engage with companies and the way we approach it is uniquely Quaker. We raise the issues of honesty, equality, and integrity in discussions with corporate officials, and do so in an open, respectful, and forthright manner. We work to build coalitions with other faith‐based and socially responsible investors to increase our impact.

In talking with company representatives, I often refer to the Quaker testimony of integrity to urge companies to follow through on public statements and representations made to stakeholders about their company’s values and practices—in other words, walking the walk. In our media‐saturated culture, it is not uncommon for companies to represent themselves publicly in ways that are inconsistent with some of the real activities and impacts of their operations. We have frequently seen this disconnect around a company’s lobbying, which is one reason why it has been a priority engagement area for us. We believe there is a legitimate business case for companies to lobby. However, we also believe that because lobbying expenditures can be significant, and because these expenditures can bring potential reputational risk, they ought to be carefully managed. We believe a company’s board of directors should provide appropriate oversight to ensure that lobbying efforts are consistent with the company’s stated values. From a business perspective and a Quaker values perspective, we believe company transparency is essential for corporate accountability.

As Friends, we enter all company engagements in good faith, reflecting both our Quaker values and the fact that our interests are aligned with the long‐term business interests of the company. For me, Quaker values include directly talking with companies, closely listening to learn the company’s perspective and concerns, forthrightly sharing our concerns, and having the integrity to hold companies accountable. We often hear from companies that we are the first investors to raise a particular issue with them. I believe this is because our Quaker values lead us to focus on long‐term business sustainability and success. Unfortunately, today’s business world is extremely focused on the short term. On more than one occasion, I have had a chief executive or top management representative say they wish more shareholders took the long view that Friends Fiduciary takes. This is a sad statement on our current business environment. Although we enter all our engagements hoping for the best, it doesn’t mean we avoid conflict situations with company management. Companies have different “personalities”: some are more open and willing to listen; others are more insular and full of their own certitude. Our work encompasses both. For me, this is why our Quaker disciplines of respectful listening, researching the issues and the company, and then holding and communicating our values with conviction are so important.

 

I believe it is critically important for people of faith to bring their spiritual values into all aspects of their lives, including money and finances—and not just when it’s easy to do so. I encourage Friends within their monthly meetings and those serving on Quaker boards to bring Quaker values into discussions and decisions around stewardship of resources. While there are no easy answers when grappling with these issues, I believe that Friends are called to seek right action regarding our use and stewardship of all our resources, including money. Given our rich history, our practice of seeking God’s will for our lives and communities, and our desire to live lives of integrity, Quakers are uniquely positioned to do this. Only by doing so can we hope to achieve the peaceable world envisioned by early Friends and desired by Friends today.

Jeffery W. Perkins is executive director of Friends Fiduciary Corporation, a Quaker nonprofit providing cost-effective, professional, socially responsible investment services to Quaker meetings, churches, and organizations. He serves on the board of the Interfaith Center on Corporate Responsibility and is a member of Chestnut Hill Meeting in Philadelphia, Pa.


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