IMPACT INVESTING AND
CATHOLIC SOCIAL TEACHING
REV SÉAMUS P FINN OMI
“Investing for the Poor:
How Impact Investing Can Serve the Common
Good in the Light of Evangelii Gaudium”
June 2014
Rome
OUTLINE
BACKGROUND CONSIDERATIONS
A BRIEF OVERVIEW OF THE TRADITION
THE CONTEXT FOR THE GROWING
TRADITION
IMPACT INVESTING: OPPORTUNITY AND
CHALLENGE
BACKGROUND CONSIDERATIONS
 “Not
to share one’s wealth with
the poor is to steal from them
and to take away their
livelihood. It is not our own
goods which we hold, but
theirs”. St John Chrysostom
 “A
great torrent rushes in thousands
of channels through the fertile land.
By a thousand different paths make
your riches reach the homes of the
poor. Wealth is like water that issues
forth from the fountain. The greater
the frequency with which it is drawn,
the purer it is, while it becomes foul
if the fountain becomes unused.” St
Basil the Great
“This
is the rule of most
perfect Christianity, its most
exact definition, its highest
point, namely, the seeking of
the Common Good…” St
John Chrysostom
A BRIEF OVERVIEW OF THE TRADITION
ROOTS OF THE CATHOLIC SOCIAL
TEACHING (CST)
A
more equitable access, sharing and
redistribution of resources and assets
that are essential for life has long been
considered a hallmark of the
Christian/Catholic tradition.
 Beginning with the scriptures, the
church fathers and the tradition and in
conversation with philosophical and
legal traditions the Catholic Social
Teaching has developed a reasonable
ethical, moral framework that offers
guidance to believers and men and
women of good will.
LATE 19TH CENTURY/INDUSTRIALIZATION AS
THE SOCIAL QUESTION

The principle of justice has been the
foundation from the beginning of the
formal CST tradition when Pope Leo XIII
called for the just and fair treatment of
workers in terms of wages, safety and hours
of labor. The context for the consideration
of these topics in the late 19th century was
the industrialization process that saw
thousands of people migrating from their
familial rural settings to urban factory
centers of production.
THE 1930’S/THE SOCIAL QUESTIONS
In QA Pius XI examined more closely
how the systems of capitalism,
socialism and communism were able to
respond to the pressing “social
questions” while respecting human
freedom and human dignity. It also
examined the appropriate role of
government in the guarantee of public
order and the promotion of the common
good by focusing on social justice and
subsidiarity issues.
SECOND VATICAN COUNCIL
The formal documents of the CST
tradition from Pacem in Terris and
the Second Vatican Council through
the most recent apostolic exhortation
Evangelii Gaudium of Pope Francis
have continue to build on the
priorities that were looked at in the
early years of the tradition however
within a rapidly globalization
process within a globally integrated
financial system
THE CONTEXT
FOR A
GROWING TRADITION
THE CONTEXT FOR A GROWING TRADITION
These reflections were within the broader
conversations and concepts like
“development and underdevelopment”;
“First World, Second World, Third Word and
Fourth World”; “Global North/ Global South”
and distributive justice.
More recent conversations about
“sustainable development” have opened
up new questions and debates and
called for a reconsideration of the term
“development” and “sustainable
development
In a parallel track beginning in the 1950’s
and continuing each decade thereafter the
UN has focused attention on the theme of
the divide between rich and poor, north
and south through “Decades of
Development” perspective. The CST
tradition entered boldly into that
conversation through the encyclical
“Populorum Progressio”, of Pope Paul VI.
The effectiveness and efficiency of the transfer
of resources through tranches of aid both
official and unofficial has also been questioned.
In addition more recently, especially after the
financial meltdown, the capacity of the official
sector to sustain their historic levels of aid has
surfaced in numerous jurisdictions as
governments experience serious revenue
constraints in meeting their own budgets.
IMPACT INVESTING: OPPORTUNITY AND
CHALLENGE
The Incubator role of the Church and Faith
Communities and Organizations
Other ideas and mechanisms have
been created and implemented to
supplement exiting revenue
streams and to provide alternatives
to the purely aid/charity paradigm;
concessional credit and financing
schemes as ably demonstrated in
the micro finance and micro credit
programs and more recently
impact investing.
The micro finance and micro credit
programs as well as social
investment funds that operated at a
concessional rate of return to
investors have made major
contributions to human wellbeing
and growth in different
communities across the world.
• Impact investing, the most recent
arrival on the horizon has been
born out of the aspiration of
investors to put their assets to work
to promote growth and
development in certain sectors of
economies while not losing capital
or sacrificing return.
• Sometimes this exposes the tension
that exists between the more
prophetic social justice
communities and those
responsibility for temporal affairs
Opportunities
Sub Sahartan Africa:
• Private Equity investment in sub Saharan Africa
increased 43% to $1.6 billion in 2013 from the
previous year according to Emerging Markets
Private Equity Association.
• Investors are attracted by fast economic growth in
some countries on the continent.
• EG. The Ethiopian economy grew by an average
10.6% a year between 2004 and 2012 according to
the World Bank
Challenges
Reputational Risk
Partners
Investing in “development”
Precautionary Principle
Glocalization