SBC works to align investing policy, values
As the Southern Baptist Convention mobilized against abortion protections, its investment arm’s proxy votes endorsed the opposite.
That investment arm, Guidestone Financial Resources, authorized subcontractors to vote on its behalf for corporate boards and shareholder proposals at companies in which Guidestone is invested. In the past couple years, a series of pro-abortion rights proposals tested Guidestone’s proxy voting.
“Reproductive rights are under siege in the United States,” said a 2023 shareholder proposal to some publicly traded companies. The proposal, which sought corporate studies on the negative impact of states’ abortion bans following the reversal of Roe v. Wade, asked the companies “to formulate policies to address employees’ reproductive healthcare needs and minimize disruption.”
Despite Southern Baptists’ strong anti-abortion views, 57% of Guidestone’s 35 total proxy votes on various pro-abortion rights proposals were in favor, according to an analysis of Guidestone’s proxy vote records for 2022 and 2023. Not long after those 2023 votes, Guidestone changed its policy, giving it more control over its proxy votes to ensure greater alignment with SBC convictions.
The optics of the misalignment between proxy votes and SBC values under the old policy, though it was cheaper and more efficient, was partly why Guidestone changed the policy in July.
“But whether or not anyone is looking, we wanted to feel comfortable in our heart we were doing the right thing with those votes,” Brandon Pizzurro, Guidestone’s chief investment officer, said in an interview.
As a religious nonprofit that sells “faith-based investing” services, Guidestone is constantly balancing industry best practices with upholding conservative Christian orthodoxy. That dilemma recently received attention with news of Guidestone partnering with the Global Methodist Church. The SBC and Global Methodist Church, a more conservative breakaway Methodist denomination, differ over women’s authority in the church, an important distinction that Religion News Service recently reported.
Largely due to its work vetting investments according to religious criteria, Guidestone has emerged as a leading financial services provider broadly throughout conservative evangelical Christianity. But the journey to achieving that success has relied on the Nashville-based SBC permitting Guidestone to operate with flexibility in both its investment philosophy and denominational fidelity.
Some of the same dynamics at play with Guidestone are present in a larger debate over an increasingly popular and controversial investment philosophy known as ESG (environment, social and government). Emphasizing investments in ecofriendly and socially conscious companies, ESG has faced fierce pushback from conservatives who have enacted state laws and policies aimed at curbing ESG. Tennessee Attorney General Jonathan Skrmetti sued investment firm Blackrock, Inc. in December over ESG.
“It’s the same debate: ’Are we going to consider priorities other than the greatest return?’” Lloyd Mayer, a University of Notre Dame law professor, said in an interview. “And relatedly, ‘how much are we going to make our decision for the people invested with us and how much are we going to let them make that decision?’”
The responsibility of investment managers is first and foremost to maximize clients’ returns, a standard also known as “prudence,” Mayer said. Other considerations beyond that, such as conservative Christian ideals in Guidestone’s case, are understood as secondary at the least and to some is even in defiance.
In fact, state laws and the federal Employee Retirement Income Security Act (ERISA) are designed to uphold that standard of prudence. Guidestone and similar faith-based nonprofits are exempt from ERISA, giving them more leeway to prioritize religious beliefs while investing. But that legal freedom still doesn’t outweigh those nonprofits’ duty to make their clients more money.
“If my marching orders are to maximize my investment return while taking into account all these other considerations, how do I prioritize the two?” Mayer said. “Now you’re trying to serve two masters and we know biblically how that works out.”
Investing biblically in the 21st century
Though Guidestone’s new policy ensures it will never again vote proxy in support of pro-abortion rights shareholder proposals, the spirit of those proposals are embodied in other Guidestone investments.
Microsoft, Starbucks, Meta, Disney, Uber, Jpmorgan Chase, Nike, Accenture, HP, and Netflix all cover abortion-related medical services under employee health care plans, for many including the cost to travel out-ofstate for an abortion. Between three and seven Guidestone mutual funds are invested in those 10 companies.
“It’s a highwire act in a lot of ways trying to be biblically sound,” Pizzurro said.
Guidestone screens for investments “in the alcohol, tobacco, gambling, pornography or abortion industries.” Companies that don’t exist for those specific purposes, even if they have policies and practices sympathetic to those social issues, aren’t excluded.
A “faith-based investing committee” comprised of Pizzurro and other
Guidestone staff utilize everything from advanced software to gumshoe research on Google to pluck out morally problematic investments. That team then instructs Guidestone’s subcontractors not to invest in those securities.
In the 23 years its mutual funds have existed, the screening has cut out hundreds of investments across Guidestone’s 27 total mutual funds, Pizzurro said.
Perhaps due to trust, satisfaction with investment returns or the complexity of the subject, Southern Baptists rarely question Guidestone’s methodology.
The last formal challenge was 20 years ago when an SBC annual meeting delegate, called a messenger, asked the retirement agency to divest from Carnival Cruise Lines over its “first annual gay cruise.” Guidestone declined the request, saying the gay cruise “was a situation similar to any other objectionable company buying a small block of rooms at a hotel for a convention,” according to the 2005 SBC annual meeting report.
“It’s not as if the gospels give you a road map for investing in the 21st century,” Mayer said. “They give you some very high-level principles which then the leaders of the denomination interpret what that means for investing.”
For example, companies’ deepening commitment to LGBTQ equality, which the SBC unequivocally opposes. But among a list of 122 companies that received special recognition from the Human Rights Campaign’s 2023-2024 corporate equality index on Lgbtqaffirming policies and practices, 57% of those companies are accounted for in Guidestone’s mutual funds.
Instead of a “bad list,” a faith-based investor can make choices according to a “good list,” Mayer said. But that “good list” should be comprised of sound investments, and it might require constant maintenance.
Faith-based investing is “subjective in a sense there are a lot of theological interpretations, and the answers are not obvious or uncontroversial,” Mayer said. “The Bible doesn’t tell you ‘Don’t invest in index funds.’”
As SBC fights over more parameters, Guidestone operates with fewer
The Global Methodist Church, a denomination formed in part to uphold traditionalist views on sexuality and gender more strictly, wasn’t dissuaded by how some Guidestone investments are Lgbtqaffirming.
If anything, the new partnership between the two is a testament to Guidestone’s appeal to a wider conservative base. As part of a splintering in the United Methodist Church, the Global Methodist Church launched two years ago due to a series of disagreements that eventually extended to the UMC’S retirement and benefits agency, Wespath.
“The Global Methodist Church is committed to providing benefits that are aligned with our values,” the denomination said in a news release, announcing it stopped partnering with Wespath and switched to Guidestone.
Other conservative denominations feel similarly and have contracted with Guidestone, including the Conservative Congregational Christian Conference.
“Conservative Christians of all stripes have started to find more affinity with each other as opposed to with Christians across the theological spectrum,” Mayer said. “This is another manifestation of that: ‘We have more in common that we thought.’”
But there are also important differences between those other groups and the SBC, the first being doctrinal. Second, largely due to the SBC’S governance structure, Guidestone partners with Southern Baptist churches, regional associations and state conventions on an individual basis whereas it has agreed to wholesale contracts with other denominations.
Guidestone sees its business growth within the SBC apparatus and outside as a net benefit for all its customers. The more Guidestone grows its business, the lower its overhead costs and fees charged to clients.
But these new markets have also reformulated what it means for Guidestone to be one of 12 major Sbc-affiliated agencies, called entities. For those other entities, such as seminaries and mission boards, a smaller proportion of business involves non-sbc people and ideas compared to Guidestone. But to Guidestone, that doesn’t mean its original mission has changed.
“They (SBC) are our core constituency, that is the heartbeat of who we are historically and who we are right now,” Pizzullo said. “What we’ve done then is leverage that to proliferate what we do well for broader evangelicals.”
Plus, these changes only happened with the SBC’S permission, when the convention amended Guidestone’s governing documents through votes at SBC annual meetings. A 2005 vote expanded Guidestone’s services to “other evangelical ministry organizations” and then in 2013, added “like-minded investors.”
Such decisions play out very differently elsewhere in the SBC, especially recently. Guidestone’s fellow SBC entities have faced attacks in recent years, including disputed claims that seminaries are teaching critical race theory and a campaign to abolish the SBC’S public policy arm, the Nashvillebased Ethics & Religious Liberty Commission, for not embracing a more conservative “abolitionist” stance on abortion.
Currently, a proposed SBC constitutional amendment to ban women pastors has inspired deeper reflection and debate about whether the convention should erect additional parameters to uphold Southern Baptist convictions.
Amid these various efforts to further confine what it means to be Southern Baptist, Guidestone has operated relatively more autonomously and without much pushback. As long as pastors’ retirement plans keep making money, that likely won’t change.
Liam Adams covers religion for The Tennessean. Reach him at ladams@tennessean.com or on social media @liamsadams.