Situation: Give or Invest in My Business?
Julian from the UK attended a JOG recently. He then sent us this question:
What is the right balance between ensuring the continuing growth and success of our business (with career development and rewarding, meaningful jobs for employees) and giving wealth to charities and external good causes?
Friends in India asked a very similar question.
Our friend Pete Ochs says, “You’ve just asked the $64,000 question!” We reached out to Pete, along with our friend Alan Barnhart, Michael Blue, and Henry Kaestner for their insight.
Scripture: Freedom Inside the “Fences”
Alan Barnhart told a group in India to look at Proverbs 14:4, which says,
“Where there are no oxen, the manger is empty, but from the strength of an ox come abundant harvests.”
Alan went on to say, “We create great value. We convert that value into profit. With profit, we can do three things: we can reward those who create it, we can reinvest in the company, and we can be generous.”
“We create great value. We convert that value into profit. With profit, we can do three things: we can reward those who create it, we can reinvest in the company, and we can be generous.”
All four of our friends quickly pointed out that “There’s no right answer” and encourage each of us to ask God.
Psalm 119:45 says,
“I will walk about in freedom, for I have sought out your precepts.”
Because we’ve sought wisdom from God, we can operate in freedom while staying within the “fences” that Scripture sets.
Michael Blue pointed to James 1:5, which says,
“If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.”
God loves to give generously, especially when giving us wisdom!
1. Seek God in His Word.
“I think the answer is however God leads you,” says Pete, “and that’s why our time with Him every morning is critical.”
“Encourage people to spend significant time in God’s Word,” says Michael, “and in prayer asking Him what they should do.”
“People shouldn’t look for a magic verse,” says Michael, but “they are allowing God’s Word to infuse their life and thinking. This also is a process that only happens by time with God. Begin this practice of spending time with God and continue to do business.” If this listening is new, Michael says, “I would even encourage them to not make any major changes for a little while as they learn discernment and faith. ”
2. Find Godly Principles.
Our friends offered some of the principles they use in allocating resources:
Alan says, “Some key concepts are: ‘God owns it all. I am a steward with no rights to what I have.’ Another is, ‘I am part of the body of Christ and should be a good member of that team.'”
“The reason for giving is to show our dependence on God,” says Pete. “Consequently, the amount we give out of our business… should be the amount that tests or demonstrates our dependence on Him. That amount may differ from time to time.”
The amount we give out of our business… should be the amount that tests or demonstrates our dependence on Him. That amount may differ from time to time.
Pete points out some other factors to consider: “It depends on lots of things including economic cycles, how fast your business is growing, your five-year business plan, etc. That will all impact your decision.”
Michael has seen many givers think that their investments can produce higher return than God! “Most people default to thinking they can do more with their money than God can. They limit Him…. All uses of our money should have eternity in our minds: ‘Where will this money have the highest return for the longest period of time? That is where I want to invest!’
“I think there is a fallacy,” Michael says, “to thinking that if you give now God can’t still grow your business if He wants to…. We all need to be careful of our own preconceived beliefs that we can multiply money in our business better than God can multiply it in His economy.
Henry centered on the principle of a “double return.” Here’s what he says about it:
“During times of growth in our business, we saw an opportunity to invest back into it. We believe, firstly, that God owned the business. By investing in it we continue the work He was doing through it while also increasing resources He might use to for investing in other companies like ours and in giving.
“That would mean that, in addition to higher internal rate of financial return on assets, we would be able to minister to that many more people: the business’s stakeholders, partners, vendors, customers, and employees. We would, in effect, get a double rate of return…….a financial one and hopefully, a Kingdom one.”
Pete adds, “Our three big questions that we ask ourselves continually are:
- Economic capital: how do we allocate the bottom line?
- Social capital: how do we love our employees as we love ourselves?
- Spiritual capital: how do we share Christ with our stakeholders?
Part of loving employees is compensating generously. Pete says, “Fifteen percent of our net income becomes our bonus pool for performance bonuses.” Alan agrees and told a group in India, “Those who produce more get more.”
“We recruit other believers from our company to help us discern where to invest the funds in ministry,” says Alan. “The ‘where’ is important and is as much a part of our stewardship as ‘how much.'”
3. Draw on Others’ Examples.
Our friends were generous to share their own practices with us:
“We invest 50 percent of our profit back into the business,” says Alan, “and 50 percent of our profit is for generosity.”
“We have always targeted giving a minimum of 20 percent of profit,” says Pete. “Some years, that’s up to 70; others it’s as low as 10. I wish I could give you a nice neat formula.”
Henry notes that, when financial returns were greater than the opportunity for reinvestment in his own Kingdom business, he allocated more toward other Kingdom businesses with the same “double return.” Henry looks beyond reinvesting in his own business or giving, to a third category:
“It’s this third category, investing in other faith-driven businesses with our surplus funds that I think is often overlooked during a discussion on investing in one’s own business or in giving….. and yet I think that it is just as important…. This type of faith-driven investing in faith-driven entrepreneurs effectively compounds the work that God is doing.”
As financial proceeds come back from his own business and others’ businesses, Henry says that he uses some of those proceeds to “increase the pool of money that we could give.”
Summing up, Henry says, “Above 10 percent, Kimberley and I always looked to reinvest in the business as our primary. When we didn’t need to invest in the business, we gave more and more…..BUT we felt called to invest in the business as a form of ministry and to dedicate it to the Lord with funds that then came out of the business to principally go to Him and His work.”
4. With This in Mind, Listen to God.
“I don’t think there is a one-size fits all answer in this,” says Michael. “The most important thing is… taking the question to God in prayer and then moving forward on their convictions.
Michael says, “I pray specifically about a decision regularly, probably daily. If I don’t feel a particular leading, or am unsure if I hear anything, I will begin to move in one direction and pray that God would confirm my actions or put barriers up to hinder them.”
God uses the process to shape us as much as He does the decision.
Even more important than the result is the process of depending on God. “The process is as important as the final decision,” says Michael. “God uses the process to shape us as much as He does the decision. If we are doing our best to follow His direction, we will make mistakes, but we will be better able to look back and learn from those mistakes. This also helps develop our ability to discern God’s voice.”
“That has worked out well for us,” says Henry, “but others might be called to do it differently.”
Thanks Alan, Henry, Michael and Pete for sharing your wisdom and experiences with us.