Many people invest a portion of their income in stocks, bonds, and mutual funds. Some Catholics who do so have questions about making their investments in a moral manner.
Can one invest in businesses that donate to causes like Planned Parenthood? Or that provide employee benefits for homosexual partners? Or that cover abortions on their health plans? Or that manufacture immoral products?
The Church does not have official, magisterial documents that answer these questions, which means that one must apply the principles of Catholic moral theology and come up with the best answers one can.
The starting point is a set of principles moral theologians have worked out regarding cooperation with the actions of others. The two main kinds of cooperation are known as formal and material cooperation.
Formal cooperation occurs if you share the same goal as the person with whom you are cooperating. For example, someone wants to feed the poor and you help him, sharing his goal. Or someone wants to abort babies and you help, again sharing the goal.
Material cooperation occurs when you help in some way but do not share the same goal. Giving food to a soup kitchen while not caring about feeding the poor is material cooperation.
Similarly, a pro-life worker at an electrical plant supplies part of the power that will be used by the abortion clinics in the city to kill babies. His cooperation is only material, though, because he doesn’t have the goal of killing babies.
Formally cooperating with an evil act is prohibited, but for a sufficient reason you may cooperate materially, so long as you don’t do anything evil and you don’t share the evil goal of the other person.
In fact, it’s often impossible to avoid material cooperation.
When you buy food at the supermarket, some of the money you give is used to pay the salary of the cashier, and he’s likely to take some of his salary and buy contraceptives or pornography or who knows what. Even if the cashier is totally moral in all his purchases, someone at the store won’t be: the butcher, the baker, the stockboy, the manager—somebody!
The fact is that you cannot buy food without giving money to sinners, and because sinners misuse their money, you cannot buy food without collaborating with others’ sins.
Your cooperation is probably material (you aren’t even aware of their purchases, much less do you approve of their evil ones), but cooperation it is.
The Positive Side
But you’re cooperating not just with their sins but with their moral actions as well.
Despite their sins, people do an awful lot of good in the world. Think of all the good done by a grocery store. It provides a neighborhood with access to food. It provides income for its employees, most of whose purchases are not immoral (and some of their expenditures may be donations to parishes, pro-life groups, and soup kitchens). And the supermarket provides economic stimulus to the community by allowing people to focus on other tasks since they don’t have to grow their own food.
Not everything is perfect at the supermarket. It undoubtedly sells food that is bad for people, and it probably sells some things that it shouldn’t. But one can’t look at the bad things without looking at the good.
When we cooperate with the supermarket by buying our groceries there, we also collaborate with the good actions of the grocery store and its employees, not just the bad ones.
Assessing the Whole
Because we can’t untangle society and eliminate all cooperation with evil, we often have to make decisions based on how people or businesses act on the whole.
Suppose that you want to rent a video and there are two video stores in town. One of them carries some films that you don’t approve of, but it has no real pornography. The other has an extensive selection of pornography on its shelves.
All things being equal, it would be better to rent a video from the store that doesn’t carry pornographic movies, even if it has some movies that are morally offensive. There is no 100-percent good video store in town, so you just have to do the best you can with who you patronize.
This is the way it is with businesses and individuals of every kind. You want to help society by directing your business to those who do the most good and the least evil. But there is no option of giving your business to those who will do only good.
How Much Investigation?
How do you know which people and businesses will do more good than evil?
You can’t quiz supermarket employees about how they’re going to spend their paycheck, though wearing buttons that say "Proud Supporter of Planned Parenthood" tells you something.
Some businesses have policies that are on public record, like what kind of benefits they offer their employees or who they give corporate donations to. But if you try to research these policies for every company you do business with, you’re going to spend an inordinate amount of time on the project.
Even attempting to do such in-depth research is likely to distort your perspective on what you uncover. In the mind of a driven researcher, the fact that a business is doing a tiny amount of evil may dwarf the much larger good it does.
At some point, investigation becomes counterproductive. You can spend so much time researching that you take time away from other things you should be doing. At some point the researching will be causing more harm than the good it would allow you to do.
The Church does not expect us to research such questions to the nth degree. It expects us to live in modo humano, or "in a human manner."
If you are going to be doing a lot of business with a company—for example, if you are going to be the principal investor in a new startup—it makes sense to do a lot of research. You will be in intensive cooperation with the company, and you’ll want to check it out both from a moral perspective and to make sure you don’t lose your money because its business plan isn’t sound.
But if you are only remotely cooperating with a business, then you don’t need to—and usually shouldn’t—do more research than is needed to get a cursory impression of who you are doing business with.
Purchasing stocks and bonds and shares in mutual funds is like making other purchases: You give money in exchange for a benefit you expect to receive. At the grocery store, you give money in exchange for food. When buying stocks and bonds, you give money now so you can have (or hopefully have) more money later.
Just as you can’t untangle the element of human sin from the grocery store, you can’t untangle it from the businesses, governments, or funds that you invest in. You can do only what you can to maximize the good and minimize the harm being done to society.
A bit of research on the companies you’re dealing with can help, but because your cooperation with any bad activity they’re up to is probably material (and minimal), extensive investigation is not required.
The possibility of investigation is even smaller with mutual funds, as the stocks and bonds that these funds invest in change constantly. If you are like many investors in such funds, it will be a practical impossibility to keep track of and morally investigate all the holdings of the funds you invest in. Instead, you have to make your decision based on your impression of the fund as a whole and the principles it applies.
There are even funds that are meant to appeal to investors with Christian values. These funds don’t invest in companies that—in the view of the fund managers—devote too much of their activity to evil.
These funds can be very useful to an investor seeking to use his funds in the best manner as the fund managers do much more extensive research than a typical individual can. From a moral point of view, their use is preferable as they stand a better chance of doing good and avoiding evil.
There are differences between investing and buying commodities such as food. One is that food is an absolute necessity of life, while investing is not.
People don’t have the option not to eat, but they do have the option not to invest. The decision to invest thus has a degree of voluntariness that food buying doesn’t have, giving it extra moral weight.
That weight should not be overestimated, though. Investing is a way of making money, just as having a job is, and people need money. The question is: How much money do you need?
Investing in stocks is also different from buying food in that one gains a share of ownership in the companies one invests in and thus a say in how they are run. That say may be minimal, but as long as one uses what voice he has in a moral fashion, he is acting responsibly.
Unfortunately, there are no formulas to tell us when what a company is doing is "too evil" compared to the good that it does. And we can’t spend endless hours micro-researching a company.
Ultimately, seeking to act responsibly is all we can do. We can’t untangle the sin in the world. We can’t avoid cooperating with others even when we know they are going to sin.
We must try to use what influence we have to fulfill our responsibilities—to ourselves, to our families, to those we do business with, and to society as a whole.
We have to use our resources of time, energy, and money to do to the best that we can and leave the rest to God. Living in a human manner means living within our limits, but it’s what God expects us to do.
That’s why he made us human.