The Case for "Socially Responsible Spending"

To do an effective job of withholding support from objectionable companies, we must be ready to boycott their products and services as well as their securities. As Mutual Funds magazine has reported:

"Will simply avoiding a company's stock affect its behavior? The short answer is that there's no proof that it will, nor even a rigorously articulated theory as to why it should. One argument is that steering clear of corporate bad guys lowers those companies' share prices, ultimately raising their cost of capital. That may be technically possible, but unrealistic: Even if boycotting shares lowered the price, that might serve mostly to open the door for management to take the company private at a bargain price. Companies need customers more than they need any particular group of investors."

Companies primarily profit from our spending, not our investing. Targeting our routine daily spending can be a potent force for change. We encourage you to spend strategically in order to reward those companies that enhance the quality of life from a Judeo-Christian perspective and avoid rewarding those whose activities undermine the health of the family and children. If a company's behavior is offensive to your deeply held convictions, why reward it with your patronage?

For most of us, strategic thinking regarding our routine daily spending is a more potent force for change than the threat of withholding our investing. Let me explain why, using the recently announced one-year boycott of the Ford Motor Company by the American Family Association and 18 other pro-family organizations. The boycott was called after Ford reneged on an agreement with the AFA to stop funding homosexual groups which promote homosexual marriage. In fact, Ford has stepped up its support. One recent example from an official Ford press release:

"Ford Motor Company Fund has pledged $250,000 to the Affirmations Lesbian and Gay Community Center.... Ford's grant is among the largest donations ever made from a Fortune 500 company to a gay, lesbian, bisexual and transgender (GLBT) organization." Many Christians find this kind of corporate activism objectionable, and would prefer to not fund it through their continued patronage. Consider the potential effectiveness of a boycott:

• Everyone can participate. All of us are consumers; not all of us have investment portfolios. Even if we do, they might not hold shares in the offending companies we are trying to influence. If you believe the value of your involvement is directly tied to the size and makeup of your investment portfolio, what do you do if your investments are modest in size and/or include no holdings, directly or indirectly, in Ford? You may conclude that there's no role for you to play.

• Ease of recruitment. There are millions of Christian families who would be quite upset with Ford if they knew the facts. But in our society it can be quite awkward to talk to your friends about personal money matters concerning their investments and how they can/should use them to stand for biblical values. On the other hand, it's relatively easy to hand them an article on the subject and ask that they take this information into account before doing any further business with Ford.

• Ease of implementation. To work for change through your investing requires adding an activity to already busy schedules: research who holds the shares and communicate your requests that they divest their holdings. But to work for change through your spending adds no new time demands. It merely requires a change in one's spending patterns. This makes it easier for each of us to get involved as well as making it easier to ask others.

• Concentration of forces. We can more readily join together and make our influence felt when we are all directing our efforts at a single decision-maker—Ford's top officer. In contrast, consider the challenge of influencing hundreds of fund managers and institutional investors, who do not share the same concerns, to sell a significant amount of their Ford stock.

Ford, which has lost sizable market share in recent years, needs our spending, not our investing, for its continued existence. Even if a million like-minded families decided to sell their mutual fund shares in protest, Ford would have only a public relations problem. The influence of those families is diluted because their investments are scattered across thousands of mutual funds and pension accounts. But if a million families who previously supported Ford's brands—Ford, Lincoln, Mercury, Mazda, Volvo, Jaguar, Land Rover, and Aston Martin—took their auto spending elsewhere, Ford would notice a decline in sales and profits. That would be a far more serious problem.

Unfortunately, the vast majority of Christians seem uninterested in practicing the kind of "socially responsible" spending necessary for a boycott to be successful. Boycotts can be a potent weapon, but most evangelical Christians appear to have little interest in wielding it.

• Socially Responsible Investing: The Debate Over Where to Draw the Line 
• Socially-Responsible Saving
• Does SMI Screen Their Funds?
• SMI's Giving & Stewardship page

• Got a question or comment about this article? Discuss it on our Message Boards.