— by Luke Roush

The fear of the Lord is the beginning of knowledge,

but fools despise wisdom and instruction.

Proverbs 1:7 (NIV)

There are few topics that unite global citizens more than the idea of education as a basic human right. Education allows us to establish a common foundation for communication, and enables expansion of our shared knowledge base over time. Education acts as a “playing field leveler” to create mobility for talented individuals willing to study and apply themselves. Advances in communication and data management, in particular, have enabled an accelerated pace of collective learning. While inequalities persist, our focus on education has undoubtedly raised ALL boats. Our world now sustains more than 8 billion inhabitants. Global life expectancy has increased from around 45 years to nearly 75 years. We have harnessed the atom. We have mapped the human genome. Our reach extends well beyond Earth. We have moved from the Stone Age to the Modern Age in terms of communication. And, remarkably, all of this has occurred in less than 100 years. Perhaps most importantly, thanks to education and technology, God has given us the tools to fulfill the Great Commission within our lifetime. What an age into which God has placed us! 

While challenges exist, our focus on education has facilitated immense individual and communal advancement. And yet, why is it that so many of us sense a level of brokenness in the current system? (1)  It’s important to note a few facts before proceeding:

1. My perspectives are primarily from a U.S. point of view, even though I have some exposure to non-U.S. systems. 

2. I believe my views are directionally accurate even though there are clear exceptions. 

3. While I’ve been a consumer of education, I’m not an educator myself.

With no further ado, here are some perspectives on “What’s wrong?” with today’s system:

The Cost of Education – “Toto, we’re not in Kansas anymore.”

Student debt has ballooned 250% in the last ten years, and repayment delinquency has more than doubled to 11% (2). As of 2018, the collective tab of about 44 million American students exceeded $1.5 trillion USD (3). This should come as no surprise, since the cost of attending a four-year U.S.-based university has increased by 1.6% annually in excess of inflation for the two decades prior to 2012. During this same period, government funding fell by 27%, and student enrollment increased by more than 30%. There is the additional reality that many students are taking five or more years to finish their degrees (many colleges and universities have shifted to reporting a six-year graduation rate), which makes total cost acceleration even more dramatic.

What’s driving these increases in cost? As you’d expect, there are a number of variables. Educator compensation has increased, and the total cost of employing staff has shifted dramatically due to benefit programs (mainly healthcare). Additionally, professors at graduate research institutions are teaching less, and being pushed to research more. The very nature of how most college professors working within research institutions are trained, hired, incentivized, and retained leads them away from the job of educating undergraduate students. This has driven the faculty:student ratio in the wrong direction. Institutions, unable to modify their ranks of tenured faculty, are hamstrung in their ability to do anything other than pass costs along to students. 

Even more dramatically than direct staffing costs, the overhead burden of operating a university has skyrocketed. As a parent of teenagers looking at college, I have observed an “arms race” amongst institutions seeking to create exceptionally comfortable, concierge-type environments for their students. What was once the campus salad bar or pizza-by-the-slice kiosk is now an organic, farm-to-table, Keto-informed boutique restaurant serving up Whole Foods-inspired sandwiches, immunity-booster almond milk smoothies, and oat-milk single-origin espresso lattes. 🙂 Somewhere in the last 20 years, my old bowl of Quaker Oats became the feedstock to a $12 oat milk smoothie! How about the old on-campus gym that had a few treadmills, some dumbbells, and a pickup basketball court? That was leveled for new recreational facilities, some of which would make Club Med look like a dump. As my son once said on a tour, “This place is lit, Dad.” He never says that. How about the Student Health Center, which used to be responsible for distributing basic over-the-counter meds and occasionally referring more serious conditions? Those days are gone. Student diversity affairs? I recall that we had a staff person or two responsible for diversity education and advancement across the university during my undergrad years. That same remit now falls to a much larger department of individuals. In some cases, entire fields of study have been created. These departments are focused on a broad set of variables to understand, measure, and affect within the student body. 

Similar staffing increases for other university departments not at the ‘center’ of the educational process have occurred, and the collective result has affected the price tag borne by students and their parents. Are these cost increases all negative? Of course not. Some of these changes have borne meaningful fruit in the form of healthier and happier students. Graduates today are far more conscious about the underlying mission of the company or organization where they work post-graduation. This is a good thing. Yet, the fact remains that these changes have produced a very different price tag for a product that is not meaningfully changed from its former self.

Old Habits Die Hard – “The halls of Academia are partially populated with buggy whip experts, even as SpaceX rockets are lifting off from the neighboring quad.”

While God’s truth and grace do not change, the specific work we do in this world, and the skills required to do it, are constantly evolving. What used to take a generation to shift is now changing within a few years. The need for a rinse-and-repeat process of education and training has never been clearer. As consumers of education, we don’t want to buy the “database”. We want to buy the “central processing unit” that is capable of understanding how to take a constantly changing set of inputs and draw conclusions. In both white-collar and blue-collar professions (a distinction that I reject, by the way), we are in the business of learning how to learn continually. Retooling is no longer an episodic need required by some; it is a continual need felt by all workers. Education must teach individuals HOW to think critically and learn. That ability to learn, apply, modify, and then repeat is a skill that is required every few years. 

According to a recent survey of Chief Technology Officers, 58% are actively re-training and retooling their talent base. Additionally, nearly 75% expect to access talent using “gig” workers in the future. These statistics within the tech sector are a sign of things to come in other sectors as well, and we see this same trend in our work as a private equity partner to the leaders who are directing the companies in which we invest. When asked whether they planned to retrain current staff, 89% of these executives said yes. To use an athletic recruiting analogy, employers will be increasingly looking for ‘athletes’ who have the capacity to play multiple positions in multiple sports. The best leaders in business will understand how to retrain, reskill, and support their existing staff through each successive evolution (4).

At some risk of offending others, let me highlight a few of the disconnects I perceive in primary and secondary education:

• Language Study – Anyone who has studied a foreign language or lived abroad knows that the only way to become fluent is immersion. Why is it that most high school students are pushed to take four years (or more) of a foreign language? Requiring a trip overseas or an inter-cultural engagement of some sort would be a wonderful idea, but the active encouragement / mandate of classroom-based language education (usually by non-native speakers in that language) feels misdirected.

• Advanced Mathematics – For certain careers, it’s critically important that students learn trigonometry and calculus. But, for most students, that is wasted effort. Is it important to understand what those disciplines can measure and evaluate? Absolutely. However, spending years trying to master these topics at the expense of learning more universal skills like basic financial literacy is a misstep. All high school graduates should have a clear grasp of how compound interest functions, how to assess personal debt, what it means to ‘deficit spend’ at the federal level, and how different career choices either enable or don’t enable repayment of educational loans. With this said, I’m encouraged that twenty-one states now require high school students to take a personal finance course to graduate, an increase from 17 in 2018 (5).

• Scope Creep – It’s been said that most books should be white papers, most white papers should be essays, and most essays should be a series of bullets in an email. There are analogies to this within the structure of higher education. What started as a series of classes on a particular topic has now expanded to become an entire department. In my view, there are quite a few majors that should really be minors, minors that should be certificates, certificates that should be classes, and classes that should not exist at all. Is all this bad? No, but it’s a bit concerning in terms of the opportunity cost of focus in these areas vs. other inter-disciplinary areas of study that might develop lifelong learning skills. Skills which will be required of graduates upon their arrival into the workforce. As we add new areas of study, we need to ask whether they warrant saddling graduates and taxpayers with inappropriate levels of public / private debt (6).

• Intellectual Diversity – A great many institutions of higher education have become fully embroiled in the culture wars of today. This is not a new phenomenon, though the one-sided nature of the public discourse seems to have accelerated via a less intellectually diverse faculty base. This has stifled institutional capacity amongst all stakeholders for spirited debate. While a few institutions have bucked this trend and even moved in the opposite direction, most have become far less tolerant of ideological dissent. As CEF members engage with these institutions, many of which are our alma maters, I believe it is important for us to speak out on the importance of intellectual diversity. For the knowledge workers of tomorrow, the ability to engage in merit-based dialogue and debate is a critical skill. Tom Darden’s white paper from a few years ago – “The Economic Dangers of Independent Thinking” – spoke in part to this trend. 

Solutions for Consideration

As part of our work with Sovereign’s Capital, an axiom we repeat regularly is “Don’t present problems without solutions!” So, I’ll attempt to outline some thoughts my partners and I have about how to change the system and create value in the process. 

First, we believe there is brokenness in how young adults and their parents view the importance of a four-year degree. The old nomenclature of ‘white collar’ and ‘blue collar’ created a perspective in the minds of most Americans that there is a social pecking order tied to obtaining a college degree. A longer topic of conversation would be the psychology that pushes students and parents towards this end. There are good reasons embedded in some of these decisions, but there is also a hefty dose of Girardian Mimetic Theory (7) in play in that we determine our desires by looking externally to what others desire, and follow suit. 

While a college degree is appropriate for many (and perhaps a majority of) young adults, skilled trades are an option that are too often brushed aside. The reality is that career prospects for skilled labor have never been more stable and lucrative. An example from our own portfolio at Sovereign’s Capital is a company called Southeastern Lineman Training Center (SLTC). This business is the premier trade school in the U.S. for electrical line workers. As we continue to develop our cities and maintain the vast network of grid we have constructed over the last century, there is a constant need for competent and safe workers. Recent storms on the east coast and wildfires in the west have highlighted the need for skilled workers who can respond safely and urgently in the face of disaster. SLTC currently graduates approximately 800 students per year, and we believe that number will more than double in the coming years. Additionally, leadership at the school has identified adjacent skilled trades for platform extension as well as continuing education for prior program graduates. As we’ve established above, learning is a lifelong skill, not an episodic experience.

What are the prospects for these graduates? The entrants to SLTC have a high school diploma, and are arriving via the military or early career transition from unskilled labor pools. The program is 15 weeks long and costs US$15,000. The placement rate is near 100% and the average starting salary (without overtime) is >US$70,000. For most of these line workers, substantial overtime opportunities exist, and graduates can earn well over US$100,000 annually. With experience, these skilled tradespeople can define their own path in terms of geography and lifestyle. The same is true for other skilled trades such as machinists, pipe fitters, plumbers, electricians, telecommunications specialists, healthcare technicians, and many others. Contrast those prospects with a college student who incurs >US$100,000 in total cost over a 4-5 year period, and then struggles to have that degree translate into stable employment which can support repayment of loans. 

In addition to skilled trades, there are other alternatives to a traditional residential four-year degree, which have gained momentum in recent years: 

• Massive Online Open-Enrollment Courses (MOOC) – This approach, originally developed for distance education, offers a free and scalable approach to delivery of education. This mode of delivery became popular in 2012, though low completion rates have led to derivatives, including DOCC’s (Distributed Online Collaborative Courses) and SPOC’s (Self-Paced Online Courses). Additional development, led by both public and private parties, continues.

• Community Colleges – A number of community colleges have outstanding transfer-in programs to state schools. For example, high school students in California can enroll in local community colleges at very low tuition rates, and then transfer to San Jose State University or UC Berkeley or UCLA after their sophomore year. So, students are able to get a degree from top-ranked state schools, but only pay for two years of that higher tuition rate. 

• Timing and Location – There are also wonderful options for students who choose to work a year (or more) before pursuing a college degree. This ‘gap year’ concept has become increasingly popular, as it allows young people to better assess their desires and commitment to completing a college degree. The in-state vs. private college decision is also an important consideration that more families are paying attention to as the cost differential has increased.

• Boot Camp 2.0 (and other office-based skilled trades) – The prevalence of specialized computer science and engineering schools (often called ‘boot camps’, as a nod to basic military training) has increased in recent years. General Assembly (8) is one such school, with 20 campuses and 250 instructors worldwide. Since 2011, this one school has produced 40,000+ full- and part-time alumni. More than 2,500 hiring partners stand ready to onboard graduates, at attractive pay scales. With just a few minutes searching online, it’s easy to identify several dozen institutions with similar missions and varying degrees of scale. Not many of these institutions are of high caliber, yet it’s reasonable to expect that those who do solve for the unique challenges of educating students in this format are likely to scale, prosper, and provide increasingly legitimate alternatives to a number of institutions which are struggling to hit enrollment targets in an increasingly diverse and competitive landscape.

While our current system is fraught with challenges, I am optimistic on new educational modalities that are being prototyped, refined, and commercialized at scale. Just as the forces of creative destruction (Schumpeter’s Gale) (9) are causing disruptive change in a wide array of professions, the same trend is occurring in education. My prayer is that Christ-followers the world over will help to shape this transformation in ways that are creative, redemptive, and restorative. Let us look to Scripture and seek direction through prayer and fellowship, and speak truth with grace into this transition. It will be a difficult one for many, including educators, students, alumni, and employers. May we help ease the pains of this transformation, even as we lean into the redemptive and restorative changes that must occur as we adapt for the next century!

—

(rs. For more information on the Christian Economic Forum, please visit their website here.

Recent articles

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[ Photo by Katerina Holmes from Pexels ]

Director | Charity Hands Foundation

Christian Slager is happily married to Anneke and they have a daughter (2) and a foster daughter (20). He grew up in a missionary family in the Netherlands, and Anneke was born in a missionary family in Thailand. Christian has studied some history and finished a degree in Theology. He has been active as a coach in social work and Christian ministry, working with disabled people, drug and alcohol addicts, people with later acquired brain damage, etc. 

In 2006, Christian co-founded the Charity Hands Foundation. Until 2017, they worked on a voluntary basis and supported projects focused on the poor. When the Van Mourik Group got involved in the foundation, the vision enlarged and the work started growing. Christian stepped in full-time in October 2018. He is passionate about discipleship and durable solutions and sees Foundations for Farming as a beautiful tool to this end. And yes, he does practice in his own garden!

LINKS

• www.charityhands.org

• www.facebook.com/charityhands/

CONTRIBUTIONS TO THE FAITH DRIVEN ENTREPRENEUR

— by Reuben Coulter

Ecosystem building requires time and patience. It is typically a co-creation process between local leadership and capacity and international expertise and resources. The process is unlikely to be clearly linear. In some countries the ecosystem may be well established (but gaps are likely to remain), while in other countries the process may need to begin from scratch. The early stages of Cultivate and Seed are critical to ensure deep Biblical foundations, a vibrant and engaged community of entrepreneurs and innovators and a broad pipeline of innovative and scalable companies. 

Tips for a Successful Ecosystem

1. Startup communities are led by local entrepreneurs

2. Entrepreneurs have to take a long-term view (20+ years)

3. Identify and build on local capabilities and resources 

4. Be inclusive of anyone who’s interested in being part of the startup ecosystem

5. Organize activities and events that are substantive and build community

‘Building Entrepreneurial Communities’ Brad Feld, Techstars

1. Cultivate

Ecosystem building starts with understanding the environment and prayerfully discerning what God is doing. Few of the entrepreneurs will have a good understanding of how their faith applies to their business and will often feel isolated or misunderstood by their church community. Church leaders will often view the business community as a source of income and not understand its missional role. The process of understanding the soil, clearing the weeds and building relationships requires patience and ‘apostolic’ leadership. It is critical that the ecosystem is led by entrepreneurs with others coming alongside them. It is also important to engage with Christians with influence and wealth to expand their understanding of God’s calling on their life and business. Ultimately the aim is to nurture a local leadership team who can guide the future development of the ecosystem. 

Process

• Identify who are the key local entrepreneurs, leaders & potential partners which share an aligned vision and values

• Map the existing ecosystem – what capabilities and resources exist locally, who are the key Christian and secular players in this space, what support do they provide, what are the gaps?

• Facilitate and equip the local leadership to shape their vision and identify the opportunities

Examples of activities

These activities may continue well beyond the seed stage but are critical for creating the right foundations for success.

• Engage/ initiate a community of faith-driven entrepreneurs, mentors, and investors with regular events & activities

• Facilitate renewal and discipleship by developing theology and ideas, as well as role models and storytelling

• In cultures where entrepreneurship is weak, there may be a need for education initiatives such as high-school or college programmes

Capital required

The laborious work of cultivation usually requires philanthropic subsidy as few of the activities have sustainable business models.

2. Seed

Having established a faith-driven community, there is a need to nurture and grow it. The opportunities in the ecosystem will have been identified and local partners are in place to support the implementation of these initiatives. Initiatives should be built on local capabilities and be resourced locally where possible. Support and resources from outside should be requested and directed by local partners. Pioneering and pastoral leadership will be required to help the community navigate this stage. 

Process

• Prototype new initiatives which address opportunities/ gaps

• Replicate & adopt successful models from elsewhere

• Engage and provide faith-specific support to secular organisations

Examples of activities

• Supporting innovation and prototyping new technologies/ business models through pitch competitions, design labs, or incubators

• Building capacity of enterprises through accelerator programmes or bespoke support

• Developing and discipling talent through mentorship, entrepreneur apprenticeships, or training

Capital required

• Many of these activities will still require some philanthropic subsidy. However, it may be possible to generate revenue streams which assist sustainability.

• In addition to grants, other forms of catalytic funding, such as low-interest loans or revenue-match payments, may be appropriate.

3. Early Stage

As seedling initiatives and enterprises begin to sprout they may continue to require tailored support and resources to allow them to scale. This is a more intensive process and will require specific skills and experience. At this stage the local faith-driven community should have developed a critical mass which allows it to shape and influence the wider culture. Positive results and a healthy pipeline of enterprises should have encouraged a wider group to engage as mentors and potentially form an angel investment network. 

Process

• Strengthen and build capacity of local partners 

• Scale or replicate what is working

Examples of activities

• More bespoke/ technical support and access to markets will be required for scaling enterprises. Local mentoring and angel investor networks are extremely important.

• Capacity building support continues to play an important role. This will include culture formation activities such as doing a spiritual integration review or even employing a corporate chaplain. 

Capital required

• Activities should be able to create sustainable business models but may still require catalytic funding to build their capacity and enable them to scale.

• Angel investors or some VCs are likely to become interested individual businesses at this stage providing seed capital.

• Debt or revenue-based financing will be more appropriate for certain enterprises.

4. Growth & Mature

In these stages, the majority of the ecosystem should have become self-sustaining. Some of the early generation of enterprises will be leaders in their field and will be able to provide expertise and resources to support the next generation.  

Process

• Mobilisation of resources to enable enterprises to scale

• Supporting discipleship of leaders and a faith-driven culture 

Examples of activities

• Partnering with Christian business leadership and discipleship networks (like C12, FCCI and Convene) to expand into new countries 

• Development of commercial investment funds, particularly those which can provide added-value through scaling expertise or access to markets 

Capital required

• Faith-driven equity investors which can provide market-return growth capital are valuable at this stage to support growth and maintain culture and values.

• Businesses should have sufficient revenues to secure local bank financing.

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[Photo by Irina Iriser on Unsplash ]

— by Reuben Coulter

In our experience, a healthy faith-based ecosystem is built on five pillars. The first two pillars are foundational and unique to our faith, while the others are also applicable in the wider secular context.

1. Realisation of Identity and Purpose in Christ

2. Redemption of Business and Culture 

3. Unlocking of Capacity and Creative Potential

4. Releasing of Resources for Growth

5. Utilising Technology as an Enabler

Realisation of Identity & Purpose in Christ

As Christ-following business leaders, we need a realisation that our true identity is as a loved daughter or son of Christ. We have articulated this as the Marks of a Faith-Driven Entrepreneur. It’s a journey, not a destination, and this process of transformation takes place through Renewal, Discipleship, and in Community. 

• Renewal – Our minds need to be renewed with a theology and vision of God’s ultimate mission of redemption and a belief that God invites us to partake in that mission. We need to be baptised in Word, Prayer, and the Holy Spirit, which guides us and empowers us to bring ‘His Kingdom on earth as it is in heaven’.

• Discipleship – This is the process through which our walk with Christ deepens and our character is strengthened. Our lives are transformed through practices that make us Christlike and dependent on God. 

• Community – Our personal transformation is enabled by our Christian community—the Church. We should encourage, support, and hold each other accountable. For those of us blessed with wealth and power, our challenge is to embrace justice and generosity to empower those less fortunate and give them opportunities. For those of us without wealth and power, our challenge is to understand the abundance of God and live in righteousness to faithfully steward and grow what we have.

The local church should be central to this process. However, as described earlier, churches often have either an undeveloped theology of work or a distorted gospel of prosperity. Much work is required to support the global church to develop a Biblical understanding of business and the marketplace, and to support and disciple the entrepreneurial leaders in their midst.

Great examples of those engaged in this type of work include; C12 Group which provides peer-discipleship for executives in Brazil, Malaysia and Singapore, the Fearless leadership conference hosted by Mavuno Church in Nairobi, the author and thought-leader Andy Crouch who articulates the case for redemptive mission, and, of course the Faith Driven Investor and Entrepreneur podcasts which tell the stories of people pioneering in their field.

Redemption of Business and Culture 

Businesses, which we as Christ-followers lead, should have a mission of serving God and others with our abilities, as grateful worship for the gift of life. These enterprises can express our faith through ministry in word and deed. We are ready to share the hope we have with gentleness and respect and in culturally appropriate ways, with employees, service providers, and customers. We create excellent products and services, as well as internal cultures and stakeholder relationships that God may use to further his work of redemption. 

As our businesses flourish and scale we should gain influence and ability to shape cultural values through meaningful business relationships, which affords us an ability to love and serve our stakeholders and solve problems through markets. Over time this has a significant impact on the wider community and national culture.

Unlocking of Capacity and Creative Potential

As discussed earlier, unlocking capacity and creative potential is essential to enable entrepreneurs to grow and their ventures to scale. Rigorous research has been conducted by organisations such as Kaufmann Foundation and George Mason University on what elements enable support the unlocking of creative potential and enable entrepreneurship to flourish. These include:

• Seeding an entrepreneurial culture

• Nurturing talent and innovation

• Providing capacity building programmes

• Developing system infrastructure and policies

• Enabling access or creating new markets

• Mobilising appropriate investment

The strongest ecosystems are deeply rooted and led by local leadership but engage and partner with international expertise. In many countries, a vibrant secular entrepreneurial ecosystem and the role of Christians may simply be to come alongside existing organisations and initiatives to help them integrate faith and support their Christian entrepreneurs, rather than replicate all of their activities. For example in Kenya, there are many secular accelerators, incubators, and investors such as iHub, Village Capital, and Growth Africa.  Faith-driven organisations like Sinapis and Transformational Business Network partner with these where possible. In Egypt, the lack of any acceleration programs presents an opportunity for Christians to influence the wider society. A local Christian business network has established a business accelerator programme, with support from Sinapis, an international organisation, and are growing an Egyptian mentor/ angel investor network.

Each of the business types, Unicorn, Gazelle and Oxen, require different types of capacity-building support and investment to enable them to grow. However, all of them require the foundational elements of Renewal, Discipleship and Community.

Consider the growth journeys of three very different faith-driven entreprises;

CloudFactory – Nepal, Kenya

Mark Sears has a vision of connecting one million people in the developing world to online work. This vision was born from a trip that he and his family had to Nepal over a decade ago. As a result he founded CloudFactory, which provides an on-demand digital workforce to help train and augment Artificial Intelligence (AI). Today CloudFactory employs over 5,000 people worldwide and revenue of over $25M. CloudFactory was supported in its growth by Praxis Labs, a US-based accelerator programme, which helped Mark refine his vision and build relationships with like-minded investors. Sovereign’s Capital, a faith-driven venture capital fund, were early investors and helped guide the company as it scaled. 

Educor – Kenya

Prisca Muyodi is the founder and director of Educor, a Kenyan company focussed on Christian primary education. Prisca was able to join an intensive Lean Start Up training with Agora Enterprises which allowed her to use the lean canvas to get a better understanding of her business and where she needed to improve. Agora also provided her with one to one mentoring to help her grow. As a result, Prisca was able to put her business in front of outside investors including the Christian impact fund Talanton which has enabled her to scale further.

Affordable Abodes – Malaysia 

Tim Tan is passionate to enable poor families to have a high-quality, low cost and environmentally friendly home. His model revolves around kenaf, a fast growing tropical plant which can be used as a better alternative to cement. Tim’s heart for the poor was birthed through his experience with his local church in Singapore and Malaysia. With encouragement from peers in a Christian business network, he left his comfortable job with a large real estate company to establish Affordable Adobes. Along the journey Tim was able to engage with Transformational Business Network in Asia which connected him to expertise and capital he needed to grow. Garden Impact, an impact investment fund led by Singaporean Christians, invested in his company and has supported the growth journey.

Mobilising Resources to Scale

A generous person will prosper; whoever refreshes others will be refreshed.

Proverbs 11:25 

Wisely mobilising local and international resources (capital and expertise) is critical to enable enterprises to scale. Often, resources flood into an environment which doesn’t have the capacity to absorb it. At best this leads to inefficiency and waste, but it can often drown the shoots of transformation which we seek to nurture. Instead, as faith-driven investors and philanthropists, we want to provide a patient drip irrigation of appropriate support and capital. Building on the Unifying Principles of a Faith-Driven Investor, we need to listen and follow local leadership and build alongside their capacity and resources. 

In the Cultivate and Seed stages of ecosystem development, this will depend significantly on Philanthropic grants or Catalytic (concessional) capital. We think it is appropriate to use this type of capital when:

1. Pioneering a new model or expanding into a new region

2. Providing enabling ecosystem infrastructure for the common good

3. Influencing and shaping culture or policy

4. Acting as risk mitigation capital to crowd-in other investors or scaling impact

5. Delivering social or spiritual outcomes (impact-first), where a commercial investment might dilute the impact

Over time the ecosystem will develop and have the ability to absorb greater volumes of capital—the type of capital required will shift to catalytic (concessional) and then commercial capital. This sequencing is important because an over-reliance on philanthropy can encourage dependency, reduce dynamism, and distort markets. On the other hand, without philanthropic capital to cultivate the ecosystem and seed innovation, it is unlikely that the market will mature and produce scalable businesses. 

As the entrepreneurial ecosystem matures, it will gradually become sustainable. The pipeline of faith-driven enterprises will grow and require commercial capital to scale. As they become profitable, they will create wealth for their employees and their investors. This in turn will allow them to be generous in their support of indigenous ministry efforts and so generate further social and spiritual impact in their community and nation.

Catalytic Capital – the Principle of Gleaning

The MacArthur Foundation has pioneered the use of Catalytic capital and defines it as ‘investment capital that is patient, risk-tolerant, concessionary, and flexible in ways that differ from conventional investment—is an essential tool to bridge capital gaps and achieve breadth and depth of impact, while complementing conventional investing.’

In the Old Testament, the Israelites were commanded to leave the edges of their fields unharvested so that the poor and marginalised might be provided for – a practice known as ‘gleaning’ (Leviticus 19: 9 – 10). Catalytic capital is based on a similar principle of not maximising the return on investment of our entire portfolio, but rather allocating a portion to be impact-first. Gleaning was commanded in addition to tithing (philanthropic giving). What if we allocated 10% of our investment portfolio to be impact-first?

Examples include;

• Transformational SME is a missional-business fund which invests in Christian-owned, small to medium-sized, growth-stage enterprises across North Africa, the Middle East and Asia. It seeks to optimise economic, environmental, social and spiritual returns in complex, high-risk commercial, ethical and spiritual environments. Investors in the fund aim for capital preservation, with all return on capital being utilised by the fund to offset investment losses and for charitable purposes in the region where its portfolio operates.  

• Ceniarth’s impact-first capital preservation strategy which has provided first-loss capital to impact funds, in water, sanitation and healthcare in low-income countries, to de-risk and crowd-in other investors.

Utilising Technology as an Enabler

The ubiquitous spread of technology is facilitating the development of the faith-based entrepreneurial ecosystem by bringing together like-minded individuals, facilitating the movement of resources, reducing transaction costs and providing rich data from which to learn. Industry specific groups can help support each other, build supply chains and enable access to markets. Over time, this will allow entrepreneurs from Zimbabwe to Mongolia to have access to world-class support from the global Christian community.

Examples of this include:

• Triventure and African Management Initiative – online platforms which enable entrepreneurs to access world-class training, expertise and resources wherever they are.

• Faith Driven Investor Marketplace – connecting investors with faith-driven funds and deals around the world.

• Faith Driven Communities of Capacity Builders and Investors in Emerging and Frontier Markets – virtual groups which utilise Zoom, Slack, and other technologies to support, collaborate, and learn from each other. 

• International Coffee Cooperative – a Facebook group of over 500 Christian entrepreneurs active in the coffee sector who share insights and work together.

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[ Photo by Tim van der Kuip on Unsplash ]

DIRECTOR OF OPERATIONS | WATERROCK FINANCIAL

Luke Bolton (MA, Biblical Studies) serves as Director of Operations at WaterRock Financial near Minneapolis, Minnesota. He earned a BA in Theology at Northland International University and an MA in Biblical Studies at Central Baptist Theological Seminary.

While serving as a securities principal at Securian Financial Group, he provided regulatory supervision for over 1,000 financial advisors in a home office capacity. Today he supports a financial advisor team who serve investors with a heart for generosity and desire to make an impact. In addition to providing operational leadership at WaterRock, Luke conducts values-based research and helps design their values and impact investment portfolios.

Luke has helped Wealthfluence Consulting develop a faith-based investing specialization for Kingdom Advisors. He is on the board for Faith Driven Network of the Twin Cities and facilitates meetings between theologians and investment managers through an Investing & Theology Group. Luke also volunteers with the LPL/KA Community’s Biblically Responsible Investing team.

Luke is registered as a General Securities Representative (Series 7), General Securities Principal (Series 24), Municipal Securities Representative and Principal (Series 52 and 53), and Uniform Combined State Law exams (Series 66), all held through LPL Financial.

Luke and his family are members at Bethlehem Baptist Church in Minneapolis. In their free time, they enjoy exploring, reading, and having outdoor adventures in the “Land of 10,000 Lakes”

Required Disclosures: Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. WaterRock Financial, LLC is a separate entity from LPL Financial.

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CONTRIBUTIONS TO FAITH DRIVEN ENTREPRENEUR

— by Mike Sharrow

What’s your job?  Often times the last person to have a clear job description, KPIs and defined responsibilities is the CEO.  It’s easy to have a role by default rather than by design.  

We’ve been implementing the Entrepreneurial Operating System (“EOS”) in our business and in that vernacular the popular question is – are you a “visionary” or an “integrator?” As incredibly helpful as that lens is, as followers of Jesus, stewards of operating companies in our Father’s Kingdom Holding Company, faith-driven entrepreneurs there are more roles to consider.

We live in an age of outsourcing and fractional “CxO” services.  You can outsource and delegate just about any technical function of business leadership you want.  Regardless of what you’re good at, like, are trained in – are there roles and responsibilities that ultimately reside with you as the entrepreneur, the CEO, the founder/owner as the stewardship agent accountable to God?  Consider these “9 Essential Roles of a Christian CEO:”

1. Chief Vision Caster 

2. Chief Culture Champion

3. Chief Performance Monitor

4. Chief Perspective Curator

5. Chief Leadership Developer

6. Chief Foresight Agent

7. Chief Opportunity Maximizer

8. Chief Resource Steward

9. Chief Ministry Catalyst

As a friend reminded me, I can’t outsource fathering my children, loving my wife or abiding in Christ.  Similarly, there are responsibilities in running a Busines-as-a-Ministry (#BaaM) which, regardless of how we structure, organize, staff and strategize, the buck stops with us.
Here’s an infographic summary of the 9 Roles further defined for you to print, reflect on, share, discuss, and perhaps rework your own position summary – 9 Roles of a Christian CEO.

More articles by Mike Sharrow:

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[ Photo by Anastasia Petrova on Unsplash ]