Q&A with Mark Elsdon
Mark Elsdon
A conversation about money in ministry
Mark Elsdon’s book We Aren’t Broke: Uncovering Hidden Resources for Mission and Ministry is an invitation to envision a different way of putting God’s gifts to work in the world. Elsdon lives and works at the intersection of money and meaning as an entrepreneur, pastor, consultant, and speaker. He is cofounder of RootedGood, executive director at Pres House, and owner of Elsdon Strategic Consulting. Elsdon is president of the board of directors of Working Capital for Community Needs (WCCN), an impact investing fund that provides microfinance for the working poor in Latin America.
Mark has a BA in psychology from UC Berkeley, a master of divinity from Princeton Theological Seminary, and an MBA from the University of Wisconsin School of Business. Mark is an ordained minister in the Presbyterian Church, USA, and lives in Madison, Wisconsin, with his spouse and two daughters.
In your book, you delve extensively into the ideas of “redemptive entrepreneurship” and “impact investing.” Would you define those and explain how they are related?
Redemptive Entrepreneurship is engaging in a venture that seeks to have a positive social impact through the lens of God’s work in the world while also generating revenue from operations. A redemptive social enterprise may be structured as a for-profit or a not-for-profit and may or may not receive grants or donations in addition to revenue generated from its operations.
Impact investing is an approach to investing where money is proactively invested to produce social impact as well as financial returns. Companies and social enterprises receiving impact investment return this blended value to investors in the form of both financial returns and social and environmental impact. Impact investing is more than just negatively screening out “bad” investments that are deemed to do harm. And impact investing is not giving money away, as in philanthropy. It is both/and. It is both an investment that generates financial returns and a way of making an intentional, positive impact in the world.
Impact investing and redemptive entrepreneurship aren’t always directly related, but they can be. For example, investors can make impact investments in redemptive entrepreneurs and thus provide much-needed financial capital at preferable terms to catalyze redemptive social impact in a community. One really powerful way for churches and church-related organizations to support redemptive entrepreneurs is to make impact investments with endowments and other funds. In my book, I describe how a PCUSA synod used endowment funds to make an impact investment in a campus ministry housing project that transforms thousands of lives and generates a financial return for both the campus ministry and the synod.
How do redemptive entrepreneurship and impact investing fit into the directives of Jesus in Matthew 25 to feed the hungry, clothe the naked, and visit the prisoner?
I love Matthew 25 and find it to be one of the most important descriptions of what it means to follow Jesus and be the church in the world. I also find it very challenging!
Jesus is clear that responding to the needs of the people around us is of utmost importance. He doesn’t describe, however, the best mechanisms for meeting those needs. I view redemptive entrepreneurship and impact investing as mechanisms. They are not magic solutions that always work or should always be applied. They will not solve every problem. They are not even always the best way to go about serving our neighbors. But in the right circumstances, they can be very effective. For example, I have done some work with an urban church that was exploring expanding their food pantry into a community-owned grocery co-op to not only feed the immediately hungry but to go deeper in addressing the food desert in their neighborhood.
Please explain the “two-pocket model” and why you don’t think that’s the best approach to handling money.
The two-pocket idea in investing is that there are philosophically two entirely separate pools of money an individual, family, or institution manages. One pocket is the moneymaking side. This is where money is invested for maximum financial return and income. The second pocket is where mission activity happens or where philanthropic giving takes place. Traditional investors, and most church institutions, keep the two pockets separate—never mixing money that is for income with money that is for charitable impact. A portion of the money made on one side is then distributed out on the other side.
One problem with this two-pocket philosophy is that it assumes money made on the investment side does not have a social impact or is value neutral. But this is not the case. The way we make money from investment has enormous implications in the world. It is a mistake to believe that we can make money without regard to impact in one pocket and then do good with that money out of the other pocket. In some cases, we may have a far greater negative impact with our investing decisions than any programmatic or philanthropic good we engage in out of the other pocket. For example, a few years ago the Church of England worked hard to address the economic devastation caused by predatory payday lenders in communities around the UK. But it was discovered that even as they waged a campaign to address that important issue, a portion of their sizable endowment was invested in the very same payday lenders they were trying to shut down. The church was making money off of the very practice they were seeking to eliminate. And those payday lenders were using church money to grow their business even while the church tried to shut them down.
Unless we literally put our money under our mattress, all of it has some impact, every second of every day. There is no such thing as value-neutral investing or saving. The question for us is “What is our money doing while we are asleep at night?”
In your opinion, under what kinds of circumstances is traditional philanthropy appropriate?
As I noted earlier, there are different mechanisms available to us to respond to and address needs. While sometimes impact investment and social enterprise can solve problems at a greater scale and depth than philanthropy, there are many instances where philanthropy is still vital and appropriate. One such situation is when there is an acute, pressing need that must be addressed immediately. While affordable housing and grocery cooperatives are effective long-term social enterprise solutions, they don’t help the person hungry or homeless today. That person needs immediate support, and philanthropy often steps in there. When Jesus is approached for help in the Gospels, he doesn’t ask if the person deserves it or tell the person to wait for a better longer-term solution to be built. He reaches out his hand to help them immediately.
I have also found that many redemptive entrepreneurs need philanthropic support alongside investment. A great many truly social enterprises, providing maximum social impact, need donor dollars alongside the revenue they generate from enterprise. For example, I serve as president of the board of directors of Working Capital for Community Needs, a microfinance impact investing fund that accepts investment from churches and individuals and uses the money to provide small loans to the working poor in Latin America so they can start and grow microbusinesses. Our social enterprise is driven by impact investing. But we still need donor support as well. Philanthropy helps us to offer additional training and services to our borrowers and significantly increases the impact of our investors. Without philanthropy, we couldn’t do what we do.
Most institutions and families are concerned about financial security. How does a church or a family decide when to hold on to money, when to let go, and how much to keep tucked away—like Joseph in Genesis—for the lean years?
This is a difficult question, and I don’t have any simple answers. Each person and family will have to decide how to approach money in their own lives. I can only speak to my own thoughts on this matter. I have found myself drawn to the parable of the rich fool in Luke as a cautionary tale about getting too attached to money. But I do save for my future and family.
I try to live with the following three principles in mind: (1) My money is not my own. Everything I have is on loan to me by God and available to me during the time I am on this earth. I have been helped along the way in all that I have, I don’t deserve any of it, and it is not mine to own but instead mine to steward. (2) My money is not my life. I believe Jesus when he says we cannot serve both God and wealth. I only have room to worship one God in my life, and I don’t want it to be money. (3) I want to control my money, not the other way around. Following on from the previous two principles, it is really important to me that I keep control over the role money plays in my life and that I don’t allow money to control me. I don’t want to spend too much energy always striving for more but instead cultivate a sense of gratitude and enoughness in my life.
One of the best ways I have found to keep my hands and heart open is to engage in regular charitable giving. Our family commits to generous giving before we do anything else with our money which serves as a great reminder that everything we have is a gift from God so we can put some of that gift to use in the lives of others right away. As long as I can keep my hands and heart open and live by the principles that matter to me, I can also save responsibly and reasonably for the future.
There are so many needs and so many good causes, it’s hard for churches and families to figure out where to put resources. We try to balance global, community, and congregational needs as a church, and, as individuals, we get requests from all kinds of organizations, from art to zoological and everything in between. How do we know where our dollars can have a real impact?
There is a bit of a paradox here that we live with as Christians. On one level it is not really up to us to determine what is the best way to give. As I noted earlier, Jesus doesn’t ask those seeking help if they are going to use his help wisely or with maximum impact. He just gives. I believe that Christian giving is not conditional. It is a response out of the love of a God who loves us unconditionally. We don’t give primarily to make a difference but as an act of discipleship.
But on another level, we do want to make the most of our resources. And there are forms of giving that can be not only unhelpful but actually harmful. Deciding how to best use our resources comes down to our priority and focus. I think of finding the sweet spot in the middle of these two questions: What are the needs of the people we are primarily seeking to serve? What resources do we have to uniquely offer? This means getting clear about what good looks like in the community, neighborhood, or lives of people that we are most committed to serving and then matching that good with the resources we have available.
You write that where money comes from can be as important as where it goes. Would you expound on that concept?
Lynne Twist uses the metaphor of water when she explores “the soul of money.” Money, like water, flows through our lives, neighborhoods, and ecosystems. The source of both money and water affects the health of what it does in the world. Brackish or polluted water from upstream will kill everything downstream. The same is true with money. The outflow of money is not only important; the source of that money is as well. If that source, how the money is earned, is not healthy, then its impact will not be good for the larger ecosystem even if the earnings are put to good use. The good that money may produce downstream can be undone, or even outdone, by the damage caused in making that money upstream. This was true in the example I gave earlier of the Church of England investment in payday lending. There are many other examples of potentially dirty upstream sources of money ranging from endowments built upon the slave trade centuries ago (as is the case of my alma mater, Princeton Seminary) to investment returns provided by fossil fuel companies that extract wealth from the earth while polluting it for the future.
This might be controversial, but I have begun to wonder about the heavy emphasis on investing in “clean” technology stocks such as Facebook, Apple, and Amazon that make up a major portion of most church-related investment portfolios. There are some serious negative social impacts from each of those companies in the lives of young people, in social division, for workers employed by them, etc. Is investing in those companies an appropriate way for the church to make money? There are no easy answers, but the question is important to consider.
Here in Georgia, we are sitting on land that was taken from the Creeks and Cherokees to establish an economy fueled by slavery. Please talk about your ideas of ways to make “reparations” for the long-ago theft of land and labor.
This is a subject close to my heart and one that I am just beginning to understand. I am far from an expert on reparations. But the point you raise is exactly the question I am asking. A great deal of church wealth (both land and endowment funds) is stolen through horrendous injustice. If we are to take seriously the idea that upstream sources of wealth matter (which I do), then we have to ask ourselves, “What are we to do about this?” I am not satisfied that we can “clean up” the past by giving a little bit of that money away for good causes in the present. It seems to me that a more serious effort is needed to make real reparations for the past.
A vital first step is acknowledging the reality of the situation. Sharing widely and publicly a land acknowledgment of whose ancestral land a church sits on is important. Taking an honest look at the source of endowment funds going back to the beginning is crucial. Then I am interested in exploring how we can move some of that wealth from predominantly white-led institutions (which is most of our PCUSA churches) to Black- and brown-led organizations.
One way we can do this is by investing our endowment funds in BIPOC social entrepreneurs in ways that empower and create wealth not just for the investor but for the recipient and their community. Another way would be to transfer ownership of church property from white-led organizations to those led by people of color. Let’s not just rent the property out to communities of color, “diversify” a historically white church by hosting them in “white” space, or even let them use a property rent-free—but let’s give it to them to own. Transferring ownership, control, and wealth is an essential component of any meaningful act of reparation. I write more about this in an article for Luther Seminary’s Faith+Lead blog.
What advice would you give to an urban church with a socially conscious congregation of largely well-educated people with comfortable incomes?
Keep going! Build upon your experiment with the Epiphany project and your long history of socially engaged mission activity to continue to innovate, experiment, and push the envelope. Consider taking a portion of your endowment for impact investing. Have the hard conversations about money and meaning that matter so much in each of our personal lives and the life of the church (I am happy to drop in via Zoom to any groups that want to discuss my book). And most of all, trust that God is with us in it all. As I close out my book, “There is no better time for us to dream big and take some risks. The needs are great, the opportunities, even greater. And the resources are there. We are at a moment when the church can sit on the sidelines and watch this work happening around us as we fade into the background. Or we can jump in and lead with all the theological, human, and capital resources at our disposal. Let us imagine a different future and get to work.”
