Last week, the $69 billion private equity firm Hamilton Lane closed a $95 million impact fund targeting health and wellness, energy and environment, community development and financial empowerment.
Catholic Investment Services, a nonprofit investment advisor that manages roughly $650 million in Catholic assets, invested $24 million on behalf of its clients via a pooled feeder fund, ImpactAlpha has learned.
The structure gives CIF “individual opt out rights” on each deal in the portfolio, according to the advisor.
“We saw interest from faith-based investors seeking to align their capital with their mission,” a spokesperson for Hamilton Lane told ImpactAlpha. “While the Hamilton Lane Impact Fund does not have a specific Catholic lens, many of the goals are already very similar.”
Catholic invest/divest. Last month the Vatican urged Catholic congregations to “shun companies that are harmful to human or social ecology, such as abortion and armaments, and to the environment, such as fossil fuels.” More than a dozen congregations of Dominican sisters announced a pooled investment of $46.6 million to seed two new Climate Solutions Funds. More than 20 Catholic institutions with $40 billion in assets have signed the Catholic Impact Investing Collaborative’s impact investing pledge.
More at ImpactAlpha
DISCLOSURE: This material is for informational purposes only and does not constitute an offer of investment management or investment advisory services by CIS or any of its affiliates. Any such offer may be made only by way of delivery of certain disclosure materials relating to CIS and its investment process. Alternative investing is speculative and involves substantial risk, including the possible loss of the entire amount invested. No assurance can be given that any investment account managed or advised by CIS will achieve its objectives or avoid losses. Past performance is not necessarily indicative of future results, and the performance of any investment account managed or advised by CIS could be volatile.
Right now, people around the world are celebrating the fifth anniversary of the publication of “Laudato Si’ Of The Holy Father Francis On Care For Our Common Home.” Known simply as the Laudato Si, this groundbreaking, 180-page papal encyclical calls on us to act with urgency to stop the relentless damage being done to our planet and all living things. Pope Francis’s passionate and compelling argument for a better world has won admiration and support from people around the world, of all faiths and backgrounds, young and old.
The encyclical’s insights and guidance have been particularly valuable to Catholics who strive to invest their money in ways that align with their beliefs and their values, particularly protection of the environment.
Before the Laudato Si, these investors sought inspiration from the Socially Responsible Investment Guidelines of the U.S. Conference of Catholic Bishops (USCCB). Those guidelines, published in 2003, called for investor advocacy to prompt greater ecological preservation on the part of corporations. However, there was no specific mention of how to handle investments in fossil fuels, which today represent a core issue for many investors.
In the 2015 encyclical, however, fossil fuels finally found their way into the spotlight. Early in the Laudato Si, Pope Francis singles out these energy sources as he urges concerted global action to reduce carbon dioxide and other harmful emissions:
“There is an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy.” (Para. 26)
Catholic investors who read only this statement might reasonably conclude that a complete divestiture of fossil fuels stocks is in order. After all, the Holy Father is calling for a “drastic reduction” of harmful emissions, while scientists have demonstrated clear connections between global climate change and our continued burning of fossil fuels. However, later in the encyclical, Pope Francis highlights one of the conundrums investors face as they take on the fossil-fuel question:
“We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay. Until greater progress is made in developing widely accessible sources of renewable energy, it is legitimate to choose the less harmful alternative or to find short-term solutions. But the international community has still not reached adequate agreements about the responsibility for paying the costs of this energy transition.” (Para. 165)
In other words, we must assess the fossil fuels question with an understanding of the vast differences in energy consumption globally. While renewable options – and investment opportunities – might abound across highly developed nations, they are nearly non-existing in other nations, where fossil fuels are essential for all the basics of life, from cooking and heat, to health care and education.
So, what might Catholic investors glean from the encyclical’s call? It’s that a transition away from fossil fuels is imperative and we all must act, although not necessarily in lockstep. As we explore potential responses with Catholic investors – from large institutions to individuals – we’ve seen three key strategies emerge:
- Immediate divestment of fossil fuel stocks – Some have taken this step already, while others are in process. Although our investment solutions currently have an immaterial exposure to fossil fuels, we plan to remove this exposure in the near future.
- Sequenced transition to renewable energy – Certain investors have sought to maintain their exposure to the energy sector by investing in companies or private funds that are advancing alternatives, a strategy our organization is pursuing as well.
- Gradual divestment of fossil fuel stocks – Some are gradually thinning out their holdings by applying filters for company performance across environmental, social, governance, fair labor and other factors. Poor performers are thus the first to go.
Whether we are Catholic investors or simply citizens of the world who care about our planet’s future, Pope Francis’s Laudato Si remains a powerful source of inspiration and pragmatism. It falls to all of us to continue our progress toward the encyclical’s challenging goals, and to invest in ways that make sense for a world facing its most important challenge.
Tom Lanctot is Chief Executive Officer and Jeremy Taylor, CFA is Investor Relations Director of Catholic Investment Services. This Boston-based non-profit SEC registered investment advisor seeks to deliver strong investment returns aligned with Catholic principles so Catholic organizations can make a bigger impact in their communities.
“As announced, my encyclical letter on caring for creation will be published this coming Thursday. I invite all to a renewed attention to environmental degradation to accompany this event, but also to repair it in your own lands. This encyclical is addressed to all. Let us pray that all may receive its message and grow in responsibility toward the common home that God has entrusted to all of us.”
Speaking these words from the papal balcony in June 2015, Pope Francis set the stage for the release of one of the most anticipated and consequential encyclical letters ever produced by The Vatican. The “Laudato Si’ Of The Holy Father Francis On Care For Our Common Home” is a thoughtful, compelling argument for urgent global action to address the damage being done to the earth and, relatedly, to restore human dignity through acknowledgement of God’s blessings:
“The urgent challenge to protect our com¬mon home includes a concern to bring the whole human family together to seek a sustainable and integral development, for we know that things can change. The Creator does not abandon us; he never forsakes his loving plan or repents of having created us. Humanity still has the ability to work together in building our common home.” (13)
Even close observers of the process that led to the Laudato Si’s release – including leaders of our firm, Catholic Investment Services (CIS) – were astonished at its scope and merging of canonical, scientific and spiritually resonant themes. The Encyclical, as Pope Francis declared, was a call to action for “every living person on the planet”(3) – from politicians to scientists, activists to economists, wealthy to impoverished, and the faithful to the steadfastly secular. As Boston Cardinal Sean O’Malley commented in a letter of praise when the encyclical was released, “The letter is the voice of a pastor and teacher who leads a universal church across regions, cultures and nations.”
One indication of Pope Francis’ efforts to extend the encyclical’s reach was that – for the first time – an Arabic version of the document was ready on release day. What’s more, unlike many past encyclicals, this one took care to employ language that most people could understand, which has made it an important document for climate activists and concerned youth of all faiths around the world. In fact, early in the encyclical, Pope Francis illuminates the chasm between self-preserving rhetoric and selfless action on the global stage:
“The alliance between the economy and technology ends up sidelining anything unrelated to its immediate interests. Consequently the most one can expect is super¬ficial rhetoric, sporadic acts of philanthropy and perfunctory expressions of concern for the envi¬ronment, whereas any genuine attempt by groups within society to introduce change is viewed as a nuisance based on romantic illusions or an obsta¬cle to be circumvented.” (54)
The encyclical’s 180-plus pages are organized into six distinct chapters, each of which demand close reading. Clearly, any effort to briefly summarize a document of such scope and depth must fall short, but here is a 30,000 foot view, chapter by chapter:
- What Is Happening to Our Common Home – presents the wide-ranging evidence that our environment is being degraded, and how this is creating catastrophic effects for humans, particularly our most vulnerable.
- The Gospel of Creation – provides a biblical context for preserving all of God’s creations, and why humans have inherited – and must act upon – a responsibility to care for the Earth.
- The Human Roots Of The Ecological Crisis – describes how materialism, self-centeredness, profit-seeking and other factors are spawning widespread disregard for environmental health and ultimately devaluing human life.
- Integral Ecology – illustrates how the environmental crisis is inseparable from the social crises facing people in nations around the world.
- Lines of Approach and Action – calls for collaboration across nations and communities, and among diverse political and economic interests, to activate a global response to the crises we face.
- Ecological education and spirituality – brings the topic home for everyone, highlighting their need to adopt new attitudes, adjust their way of life and demonstrate caring and love toward others and toward the planet.
Taken together, these chapters step readers through a clear, methodical and well-supported argument for moving beyond rhetoric to advance real change in how we live, relate and treat our planet.
Inspiration for Catholic Investors
Back in 2015, among the most eager to receive the Pope’s guidance on environmental destruction and its remedies were the leaders of Catholic institutions across the U.S. – specifically those clergy, laypeople, board members and investment counselors who are responsible for the financial wellbeing of their organizations and the sustenance of the vital work they pursue.
Some, such as colleges and universities, must oversee investments of significant endowment funds, while others are charged with preserving financial cushions to keep their operations and programs steaming ahead amidst unpredictable economic crosswinds. Still others, such as K-12 schools, invest so that they have resources to continue investing in talent and technologies to cultivate the next generation of Catholic-faith professionals. Many such organizations turn to CIS for help as they explore complex investment questions.
Beyond their fiduciary obligations, these institutional investors all have faced the challenge of seeking attractive investment returns in a distinctly Catholic way. They are obligated to direct their investments toward companies or sectors that align with Catholic beliefs. In short, they have had to reconcile the temporal quest for optimal investment results with the eternal mission of advancing the dignity, health, security and spiritual growth of all the people of the earth.
Before the release of the Laudato Si, the primary guidance for these investors in the U.S. came from the Socially Responsible Investment Guidelines created by the U.S. Conference of Catholic Bishops (USCCB). These Guidelines, published in 2003, comprises a set of strategies that the church employs to invest its assets based on Catholic principles and acting as a guiding light for CIS’s own investment philosophy.
At a high level, the guidelines provide investors with strategies for avoiding evil, doing good and pursuing varying degrees of corporate activism to effect change. No doubt, some of its points are very prescriptive, such as “absolute exclusion of investment in companies whose activities include direct participation in or support of abortion.” But they are not intended to be a checklist, but rather a rubric for thinking about the investment implications of critical topics: protecting human life, promoting human dignity, reducing arms production, pursuing economic justice, protecting the environment and encouraging social responsibility.
It’s worth noting that these topics generally reflect those considered by today’s Socially Responsible Investing (SRI) adherents. Recently, SRI investments in the U.S. reached $12 trillion – a stunning rise from the estimated $2 trillion of 2003, when the USCCB guidelines came out.
What About Fossil Fuels?
In recent years, scientific consensus has coalesced about fossil fuels’ role in driving changes to Earth’s climate, and investors of all types have thus been analyzing the energy sector with greater scrutiny. Political, social and economic forces are creating pressure to reduce investments in fossil fuels while increasing investments in energy alternatives. Many Catholic investors have sought CIS’s guidance on how to approach energy investments in their portfolios, especially considering the lack of specific direction within the USCCB Guidelines.
Investors were encouraged to promote shareholder resolutions that relate to pursuing and reporting on ecological preservation efforts. In fairness, however, we must remember that when the Guidelines were released in 2003, the climate change (or global warming) debate was just heating up, and even the term “fossil fuels” was not yet in the public vernacular.
Thus, in the months leading up to the Laudato Si’s release in 2015, many environmental action groups were keen to see strong anti-fossil-fuel messages from Pope Francis. What they got instead was a wise and pragmatic approach to the issue, one that balances the absolute need to reduce carbon emissions from fossil fuels while resolutely investing in alternatives. For example, the encyclical states:
“There is an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy. (26)
Later, the encyclical provides more detail about the fossil-fuel conundrum, in light of differences in the development stages of countries around the world:
“We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay. Until greater progress is made in developing widely accessible sources of renewable energy, it is legitimate to choose the less harmful alternative or to find short-term solutions. But the international community has still not reached adequate agreements about the responsibility for paying the costs of this energy transition.” (165)
The phrase “widely accessible sources of renewable energy” is important, because there are unbridgeable gaps between this ideal and the day-to-day energy options for most people on the planet. Catholics who are devoted to global programs and missions are well acquainted with the plight of people in developing countries, where homes are heated by burning wood and medical facilities lights and equipment are run by gas-powered generators. It’s difficult to hold these fossil-fuel users to the same standard as those whose historical use of the same resources has enabled undreamed-of quality of life.
So, what does this mean for Catholic investors? Although the encyclical doesn’t call for immediate divestment of fossil fuel stocks, it implies that we should move in that direction. One strategy is to steadily shift energy investments toward companies or private funds that are advancing alternatives, which is something CIS is doing. Another strategy is to focus fossil fuel divestment on companies exhibiting substandard business practices relating to environmental, social, governance, fair labor factors. The remaining strategy, of course, is to fully divest of fossil fuel holdings, which CIS plans to do in the near future.
Shining a Light on Human Life
As noted, since 2003, Catholic investors have benefited from unequivocal USCCB guidance about protecting life: Do not invest in companies that whose activities involve abortion or contraception, embryonic stem cell or fetal tissue research, or human cloning. However, over subsequent years, we’ve seen variances in how closely this guideline has been followed.
For example, some investors will apply a revenue test to determine whether a health industry conglomerate or institution is still worthy of investment if only a small part of its operation involves USCCB-prohibited activities. Other Catholic investors draw a firm line: They will not invest in a company even if a mere 0.001 percent of its revenues flow from, say, research using fetal tissue. CIS itself falls into this zero-tolerance category.
Although the Laudato Si does not try to resolve such dilemmas, it reinforces the critical importance of preserving human life and dignity and establishes its centrality the environmental challenge:
“A sense of deep communion with the rest of nature cannot be real if our hearts lack tenderness, compassion and concern for our fellow human beings. It is clearly inconsistent to combat trafficking in endangered species while remaining completely indifferent to human trafficking, unconcerned about the poor, or undertaking to destroy another human being deemed unwanted. This compromises the very meaning of our struggle for the sake of the environment. (91)
Later, Pope Francis draws an even more direct line between protecting the unborn and protecting all other vulnerable people of the world:
“Since everything is interrelated, concern for the protection of nature is also incompatible with the justification of abortion. How can we genuinely teach the importance of concern for other vulnerable beings, however troublesome or inconvenient they may be, if we fail to protect a human embryo, even when its presence is uncomfortable and creates difficulties?”(120)
The Road Ahead
Throughout the 180-page encyclical, clear investment guidance surfaces only a few times. But, this light touch makes each reference more precious for Catholic investors and the investment specialists like us who inform their decision-making. For example, the Laudato Si’ speaks here with profound simplicity:
“Efforts to promote a sustainable use of natural resources are not a waste of money, but rather an investment capable of providing other economic benefits in the medium term. If we look at the larger picture, we can see that more diversified and innovative forms of production which impact less on the environment can prove very profitable. It is a matter of openness to different possibilities which do not involve stifling human creativity and its ideals of progress, but rather directing that energy along new channels.” (191)
Relatedly, this point about adopting a long-term view is extremely relevant to Catholic investors who must assure the financial durability of their institutions for time periods measured in decades, even centuries, rather than merely the upcoming quarter year:
Caring for ecosystems demands far-sightedness, since no one looking for quick and easy profit is truly interested in their preservation. But the cost of the damage caused by such selfish lack of concern is much greater than the economic benefits to be obtained. Where certain species are destroyed or seriously harmed, the values involved are incalculable. We can be silent witnesses to terrible injustices if we think that we can obtain significant benefits by making the rest of humanity, present and future, pay the extremely high costs of environmental deterioration.(36)
All who strive to align their investing strategies with their Catholic beliefs are blessed to have the inspired and rigorous gifts embodied in the Laudato Si’ and USCCB Guidelines. CIS will continue to rely on these important documents as we pursue our mission of achieving investment excellence while advancing Catholic principles.
Catholic Investment Services, Inc. (“CIS”) is a Boston-based non-profit SEC registered investment advisor that seeks to deliver strong investment returns aligned with Catholic principles so Catholic organizations can make a bigger impact in their communities.
America’s all-girl Catholic high schools are well-known for delivering a spiritually enriched liberal arts education that produces solid, broad-minded graduates. And now, that reputation is being reimagined – as a platform for top-quality science, technology, engineering and math (STEM) learning – thanks to Fontbonne Hall Academy in Brooklyn and its hard-charging, visionary principal, Mary Ann Spicijaric.
Mary Ann’s journey to becoming a Catholic education trailblazer began at co-ed St. Francis Preparatory School in Queens, New York, when a teacher inspired her fascination with chemistry. Upon graduation, Mary Ann had in mind two possible careers – to go into medicine or become a teacher. She was leaning toward the latter course, and pursued her Bachelor of Science in Teacher Preparation (Specializing in Chemistry) at Manhattan College in the Bronx. Then, a fortuitous student-teaching assignment at the acclaimed Bronx High School of Science inspired Mary Ann to devote her life to helping young people achieve their full potential.
Guided by her Catholic school experience, her first position after college was back at her alma mater, St. Francis Prep. There she distinguished herself as a science teacher, director of the school’s science research program, and chair of its science department. She would go on to earn a Master of Science in Secondary Education from Fordham University and a Specialist Diploma in Administration and Supervision from Queens College. Under her guiding hand, St. Francis Prep became the only Catholic school to become a semi-finalist in the Intel Science Talent Search, America’s most prestigious pre-college science competition.
In 2013, providence presented Mary Ann with an irresistible opportunity: to become principal of the all-girl Fontbonne Hall Academy, and to transform it into an institution with an outstanding STEM offering. Fontbonne was founded by the Sisters of St. Joseph in 1937 as a finishing school for girls. Within its impressive European-style façade, many generations of girls have gained a quality liberal arts education with a strong emphasis on tradition and Catholic faith. The Sisters of St. Joseph of Brentwood, Long Island, who sponsor Fontbonne, sought out Mary Ann because she was uniquely qualified to preserve the uniqueness of the school’s history while transforming it to better prepare graduates for tomorrow’s careers. Specifically, they wanted her help in meeting a new reality: About two-thirds of all careers now involve some form of science, technology, engineering and math. Mary Ann was eager to elevate the school’s STEM capabilities, and her educational philosophy aligned perfectly with Fontbonne’s: to develop confident young women who can think critically, analytically and creatively and who possess the desire to continue learning throughout their lives.
When Mary Ann stepped into the principal’s role, the infrastructure for a strong STEM curriculum had yet to be built out. The school had no email system or wi-fi network, the science labs were outdated, few faculty members were skilled in using the latest technology. A new director of technology arrived the same year, which helped to accelerate the build-out of key technologies, such as a Chromebook mobile computer program. Even more momentous was a connection made with Google, thanks to one of Mary Ann’s former students. Google was working on a secret application, one that they hoped would transform America’s classroom, and they chose Fontbonne as the first full school to test their invention. The application was ultimately revealed to be Google Classroom – a digital hub for online learning and classroom management – and its implementation at Fontbonne was the turning point both for the staff and the school’s emergence as a STEM education leader.
The STEM fields are so broad and complex that it takes great teachers and excellent facilities to deliver a well-rounded experience. Mary Ann’s vision has been to immerse students in the most exciting concepts, technologies and innovations available today. The school has built a Fabrication Lab (the Fab Lab), a high-tech space where students can experiment with drones, robots and virtual reality tech, among other things. There is now a three-year Science Research Program and a total of 17 advanced placement (AP) courses. The school also has formed a bond with Brown University, whose professors teach pre-engineering courses via video. These and other STEM-oriented advancements are taking place even as the school sustains thriving programs for religion, language, visual arts, social studies and athletics, among others.
These major enhancements to the school’s staff, programs and facilities have required significant investments. But, the school’s funding is largely borne by student tuition, which each year falls about $4,300 short, per student, of the actual cost of education. To keep tuition affordable, the school is striving to raise awareness of its need for continuing financial support. In particular, they want to inspire alumnae to give a gift to Fontbonne. Many alumnae look back at their time at Fontbonne, and declare that it, “Made me the woman I am today.” The school is encouraging them to act on that sentiment, and to make gifts that can help today’s girls fulfill their potential.
Mary Ann and the Sisters are committed to ensuring a more stable financial future for Fontbonne, which is why they began establishing an investment program for the school several years ago. Recently, they turned to a professional investment management firm for assistance in this regard. The firm is helping to guide Fontbonne’s long-term investment strategy while ensuring that the school’s portfolio supports the teachings of the Catholic Church, as articulated in the U.S. Conference of Catholic Bishops (USCCB) Socially Responsible Investment Guidelines.
In many ways, the journey of Fontbonne echoes that of the Sisters of St. Joseph, an order established in France in 1650 by a Jesuit priest who brought together a group of women to promote a love of God and to meet the most urgent social needs of their time. Today, the Sisters of St. Joseph of Brentwood, Mary Ann Spicijaric, and the staff, parents, alumnae and other supporters of Fontbonne Hall Academy are committed to sustaining that tradition of service – with a little help from cutting-edge science.
Catholic Investment Services tends not to opine on current events owing to our efforts to remain focused on the long-term. In times like these, it seems more prudent to observe and reflect rather than to react or comment, particularly when there are so many unknowns and the situation is rapidly evolving.
Nonetheless, the spread of the coronavirus has sent significant shock waves through global stock markets, so we recognize the importance of sharing our thoughts and observations.
- The coronavirus, COVID-19, is beginning to spread well beyond China and is creating uncertainty for the global growth outlook and sparking volatility in broad financial markets. The human impact of the virus has been significant, and no one can say for certain how the spread of the coronavirus will evolve. The World Health Organization still identifies several “Knowledge Gaps” in their most recent report including “the behavioral and socio-economic risk factors for infection in households / institutions and (public) communities.”
- The Chinese economy is much more significant to the rest of the world today than it was during the SARS outbreak. Importantly, we believe the Chinese government is also far more transparent today than it was during SARS epidemic when the initial response was something akin to “no problems here, everything is under control.” Today, in addition to limiting the travel of millions of those in infected areas, the government appears to be much more proactive in building new hospitals to care for the sick, sequencing the genetic makeup of the virus, using new blood tests to try and detect infected people, and testing existing (HIV) medications against COVID-19 while also working on a vaccine. Both China and the rest of the world are fighting the virus from a much earlier stage than might have been the case in the past. This is positive.
- From an investment perspective, we are monitoring the impact of COVID-19 from all angles including communicating with our investment partners and CIS board members. The impact of this virus on business performance and supply lines won’t be known for some time – however, it seems likely that many businesses won’t make their original performance targets for 2020. The markets are doing their job of trying to discount the impact this virus is expected to have on the Chinese and global economies and on corporate earnings. The recent market decline followed fairly spectacular gains in 2019 and is not out of line with historical market corrections.
With so little known and such a wide set of potential outcomes, the job of making investment decisions is harder than normal, but these types of events often prove to be opportunities for long-term investors to put capital to work. It is too early to draw that conclusion and so until we know more, we will continue to monitor the situation and maintain our long-term focus.
-Tom Lanctot, CEO of Catholic Investment Services
BOSTON, MA – Catholic Investment Services (CIS) announced today that Michael Nagy has joined the firm as Managing Director.
Nagy comes to CIS, the first non-profit, Catholic-only focused investment management firm, with 16 years of experience in the investment world. He spent the last four years with Christian Brothers Investment Services (CBIS) in Chicago, where he served as a Managing Director, responsible for investor and consultant relationships in the Central region of the US.
While at CBIS, Nagy initiated coverage by key consulting firms, helped to launch new products, and promoted strategic branding adjustments to position the firm for growth. Prior to his time at CBIS, Nagy gained extensive experience in investment services and asset management over the years, holding leadership positions at Oak Ridge Investments, Aviva Investors Inc., and Henderson Global Investors Inc., after getting his start at GE Asset Management.
“Michael comes to us with a deep understanding of the Catholic investing community,” said CIS CEO Tom Lanctot. “His analytical, collegial and strategic approach will help us accelerate the development and implementation of new investment strategies and build on our nuanced and thoughtful advocacy and engagement in ESG and impact investing.”
CIS manages endowments and pensions for a wide variety of Catholic organizations, including dioceses, religious orders, higher education/high schools, healthcare systems and social service organizations. All of its clients are non-profits.
In his new position at CIS, Nagy will focus broadly on development. That includes marketing, investor relations, product development, and new investment strategies. He has experience with International Equity, Socially Responsible Investment, Currency, Hedge, Global REIT, Direct Property, and Fixed Income LDI strategies.
Nagy is passionate about sustainable investment strategies and said he was drawn to CIS by the values and progress championed by Catholic institutions and the people who serve them. He sees the move to CIS as an opportunity to engage all aspects of his experience to deliver results.
“I’m thrilled to have the chance to learn from the legendary investors who lead this organization,” Nagy said. He also offered high praise for Lanctot. “My knowledge of Tom’s style, work ethic, and reputation in this business made me all the more excited to work for CIS. The firm is known for its leadership and sophisticated strategies that align with the values of its members.”
CIS was founded by some of the investment industry’s leading executives. Their goal was to create a differentiated approach, providing high-quality endowment products for Catholic fiduciaries that would be in careful alignment with the US Conference of Catholic Bishops’ investment principles.
Nagy is a graduate of Syracuse University’s L.C. Smith School of Engineering & Computer Science and holds a Bachelor of Science degree in Aerospace Engineering.
About Catholic Investment Services
Catholic Investment Services (CIS) is a non-profit, SEC registered investment advisor that manages endowment and pension assets for Catholic organizations. It seeks to deliver strong investment returns aligned with Catholic principles so Catholic organizations can make a bigger impact in their communities. CIS was founded by some of the investment industry’s most respected leaders to address the investment challenges faced by Catholic organizations. Based in Boston, CIS’s assets under management represent approximately $650 million.
Father Larry Dunham embarked upon his first pilgrimage to the Holy Land of the Christian Religion in January 2012. Like many pilgrims across the centuries, he yearned to walk in Jesus’ footsteps and to experience the region’s revered shrines. He also made the journey to witness first-hand his Franciscan brothers’ tireless shrine preservation and charity work.
For Father Dunham, the pilgrimage was life-changing – both because his soul was profoundly moved by the experience and because very soon he would play a vital role in ensuring that those ancient shrines could endure for centuries to come. Soon after returning from his pilgrimage, Father Dunham was appointed Guardian and Commissary of the Monastery of the Holy Land in Washington D.C. This century-old Franciscan Monastery is the U.S. home of the Holy Land Franciscans, who for more than 800 years have taken responsibility for protecting and supporting the sacred shrines and the people of the Holy Land.
In the Province of the Holy Land, Franciscan brothers act as caretakers of such holy sites as the Basilica of the Annunciation in Nazareth, the Basilica of the Nativity in Bethlehem, the Church of the First Miracle in Cana and the Church of St. Lazarus in Bethany, among many other “stones of memory” in the region. Such shrines are always at risk due the flow of millions of pilgrims each year which, although welcome, steadily deteriorates these ancient sites. Additionally, the friars look after sites in Syria, which are always at risk from the bombings and strife that have plagued the country. Beyond preserving shrines, the Franciscan brothers also support the “living stones,” Christians living in the region, who represent only 2 percent of the population. The brothers assist with religious services at local churches, and administer social services – related to education, employment, housing and senior support – for the poorest of the poor.
The monastery in Washington D.C. plays several intertwined roles that support the vital work being done in the Holy Land. With its welcoming Franciscan community and full-size replicas of several Holy Land shrines, it is a pilgrimage destination in its own right, while also educating people about the Holy Land and organizing regular pilgrimage offers, in partnership with a travel agency. More than 50,000 people visit the monastery each year, drawn to this “Little Jerusalem” with its remarkable architecture and gardens, often spiritually enriched by witnessing the Franciscan brothers’ deep devotion to their mission.
In his role as Guardian and Commissary, Father Dunham is also responsible for administering the national Good Friday collection, which raises money to sustain the Holy Land mission work and the monastery. Each year, he and his brothers market to and connect with every parish across the country, encouraging them to hold a special Good Friday collection and to remind the faithful of the critical need to preserve the holiest places in Christendom. In 2019, the parishioners heeded the call, providing about $13 million in total donations.
Although this is a substantial sum, the needs in the Holy Land are great, so Father Dunham and the brothers take as little money as possible to run the U.S. monastery, optimizing their resources while exploring new ways to raise funds. They cultivate a large vegetable garden, which produces 8,000 pounds of food each year for their use and to share with local food banks and homeless shelters. They welcome short-term tenants, such as visiting clergy, pilgrims and students pursuing religious studies at universities in the city. They also renovated the little-used St. Francis Hall to create a beautiful new rental facility for special occasions, such as their annual November fundraising gala. The Hall has become a premier venue for wedding receptions, thanks to its pastoral setting, careful landscaping and colonnaded rose garden.
Father Dunham is committed to ensuring that the monastery is the best possible steward of the funds it receives from donations, fund-raising programs and other efforts. For years, the monastery’s investible assets were pooled with those of the Archdiocese of Washington, D.C., which offered both economies of scale and investments that reflected Catholic doctrine. When that pooled arrangement came to an end, Father Dunham and the monastery’s finance board initially considered a similar arrangement with a different nearby diocese. But, instead, they pursued a new path as a standalone investor, working with a firm that provides active investment management while adhering to the socially responsible investment guidelines of the U.S. Conference of Catholic Bishops.
The monastery’s rose garden is blessed with 1,300 rose bushes, making it a powerful tourist attraction. But it recently brought forth another surprising gift: the world’s most heavenly honey. This is because the monastery, which had been losing its bee population, built 20 beehives among the roses and other flora of its garden to enhance pollination. These bees, looked after by a local chapter of the Society of Beekeepers, produce a pure, delicate honey with a hint of rose – which itself has attracted many visitors eager for a taste.
Father Dunham believes that the roses, the bees and the remarkable honey comprise yet another sign that the spirit of St. Francis of Assisi – patron saint of ecology and the environment – is present at the monastery. That spirit, which has guided the Holy Land Franciscans for eight centuries, will continue to inspire those who protect the most holy Christian shrines for future generations of pilgrims from around the world.
Sustaining a 75+ year legacy, Holy Cross Family Ministries (HCFM) brings together the timelessness of prayer and the timeliness of today’s technology to reach, inspire and strengthen the faith of families around the world. The group is committed to honoring its enduring promise to donors – that 100% of their gifts go directly to programs – even as it awaits the potential canonization of its late founder, Father Patrick Peyton.
In 1942, Father Peyton was inspired to begin a ministry that would reach beyond his chaplain duties in Albany, New York, to influence the world. His Albany followers, like millions of others, were enduring the pain of World War II as loved ones departed to fight for the nation and often did not return home. Based on his belief that a family that prays together, stays together and is drawn closer to God, Father Peyton sought and gained approval to create a new ministry – The Family Rosary – and began writing letters to fellow clergy and the faithful, urging them to pray the Rosary every day. This effort earned a great response, but Father Peyton’s next step would extend his vital ministry to a national, and then a global, audience.
After leading a Rosary prayer on an Albany radio station in 1943, Father Peyton grasped the power of that new medium to reach families wherever they lived. Soon, he traveled to Hollywood and earned the participation of many of the day’s top stars, including Bing Crosby, who in 1945 prayed with Father Peyton on the nation’s largest radio network. Ever the innovator, Father Peyton took advantage of TV and film to reach even more people, and began leading rosary rallies in the U.S. and abroad that brought many millions together in prayer. By the time of his passing in 1992, he had built a world-wide ministry while revolutionizing how the Catholic Church reached its faithful. His good works were recognized in December 2017 when Pope Francis issued a decree recognizing Father Peyton as Venerable, a key milestone on the journey to possible sainthood.
Father Peyton’s global mission and spirit of innovation continued to be carried forward passionately by HCFM. Headquartered in Massachusetts, HCFM operates four complementary ministries that foster family prayer and the spiritual wellbeing of families in 17 countries across the globe. Family Rosary supports family prayer through retreats and prayer home visits, and distribution of prayer books, rosaries and digital resources – including an app that has had more than 1.4 million downloads. Family Theater Productions continues the tradition of producing programs, films and other faith-focused media. Father Peyton Family Institutes builds strong families through counseling, spiritual retreats and programs for young and old. Its newest ministry – CatholicMom.com – provides on-the-go parents with faith-based podcasts, articles and activities. Taken together, these ministries represent a rich array of resources that are both leading edge and deeply connected to the teachings of Jesus Christ.
HCFM keeps another dimension of Father Peyton’s legacy alive: that of ensuring that donors’ dollars deliver the greatest possible impact. Donors have been supporting the mission generously since the 1940s, giving both modest amounts and major gifts through estate plans and other means. Recently, HCFM received a $2 million donation from someone who treasured the memory of listening to Father Peyton’s radio broadcasts many decades ago; the donor wanted to ensure that future generations could share in the spiritual experience that had shaped his own life.
HCFM honors this ideal by promising donors that 100% of their gifts will directly support the organization’s various ministries. The organization keeps this promise, in part, through an endowment that is intended to supplement year-to-year donations. The organization invests the endowment to pursue growth with an eye toward supporting the teachings of the Catholic Church. In 2015, HCFM entrusted part of the endowment to a professional investment management firm that creates growth-oriented portfolios that align with the U.S. Conference of Catholic Bishops (USCCB) Socially Responsible Investment Guidelines.
If Pope Francis ultimately canonizes Father Peyton, there already will be a welcoming and engaging place for pilgrims to visit and learn about the “Saint of Family Prayer.” In autumn 2019, The Museum of Family Prayer opened its doors, adding an exciting new dimension to the popular Father Peyton Center in North Easton, Mass. The museum shares the power of family prayer through interactive and immersive exhibits, graphics, and media content, among other facilities. Fittingly, the new museum is a showcase of Father Peyton’s vision and work – and of the unwavering power of prayer.
Find out more about HCFM at their website: www.hcfm.org
As president of a Catholic school system – ranging from kindergarten to twelfth grade, and from all-boy to all-girl to co-ed – Father Scott Jabo has shaped the educational and spiritual growth of thousands of young people. And now he is helping to advance an innovative scholarship program that aims to sustain Erie’s well-regarded Catholic schools for many decades ahead.
Father Jabo is president of Cathedral Preparatory School and Villa Maria Academy, two venerable Catholic high schools – established in 1921 and 1892, respectively – as well as Mother Teresa Academy, a recently launched K–8 school. The three schools are located in Erie, Pennsylvania, which is part of the vast thirteen-county Diocese of Erie located in the northwest corner of the state. The schools have a combined enrollment of over 1,000 students, and Father Jabo looks after the interests of students and the broader school community as he faces the complex challenge of leading high-quality, faith-guided educational institutions in a modern age.
Guided by his faith, Father Jabo is upbeat about facing these challenges even as he admits that he never envisioned serving in an educational role, let alone as a top leader. After his ordination in 1990, he was assigned to a Titusville, PA parish church, fulfilling what was the diocese’s most pressing need at the time. He had every expectation of remaining a parish priest, but when a new bishop was appointed to the diocese, Father Jabo was assigned to serve at a (now closed) high school in the region. He quickly demonstrated both a talent and passion for this work and went on to earn a master’s degree in education administration from Duquesne University.
In 1999, he was appointed as assistant headmaster of Cathedral Prep and, a year later, as headmaster. Cathedral Prep was legally merged with Villa Academy in 2010, but the two schools have retained their traditional all-boy and all-girl structures even as curricula were aligned and staff positions combined to achieve consistency and efficiency. Father Jabo and other diocesan leaders understood that even respected institutions like Cathedral Prep and Villa were facing severe headwinds as parochial-school enrollment continued to decline nationally. They needed to address two related challenges: cultivating a steady group of students applying to the twin schools in the coming years, and ensuring that parents could continue to afford this quality education.
The diocese responded to the first challenge by creating Mother Teresa Academy, a K–8 “mission school” aimed at providing a high-quality education to the children of Erie, a city of about 100,000 that fronts the Great Lake that shares its name. The new school, which opened in 2018, is located in one of the most economically challenged neighborhoods of the city, where median household income is about 40% lower than the U.S. average ($36,000 vs. $59,000). The school is guided by both the Pennsylvania Common Core State Standards and by the Diocesan Standards for Religion, ensuring that students can grow both academically and spiritually.
Father Jabo and diocesan leaders met the second challenge by repositioning an existing 501(c)(3) foundation to create a new endowment, which generous donors have already built to more than $12 million through cash gifts or inclusion in their estate plan. The school has a vision of increasing the endowment’s value to $30 million, which it believes will provide firm financial footing for the three schools far into the future. Successful fundraising campaigns, such as a November drive that includes a donation-matching feature, will contribute toward achieving this ambitious goal.
The endowment is already demonstrating its power by supporting a new scholarship program that aims to create a financial bridge for local parents who hope to give their children a high school education at Cathedral Prep and Villa. The Catholic Elementary Scholarship Program (CESP), announced in January, will provide eligible graduates of any Catholic elementary school in the Diocese with a $3,000 scholarship to attend Cathedral Prep or Villa. This scholarship can be renewed for four years (for a total value of $12,000), which would lower the cost of either high school’s current tuition from $10,195 to $7,195. The scholarship aims to ensure that tuition costs are less of a barrier for parents who want their children to experience a seamless K–12 Catholic school experience.
This game-changing scholarship program, along with other key programs, will test the durability of the endowment over the long term. This is why Father Jabo and diocesan leaders are intent on investing the endowment’s funds with an eye toward generating appealing returns. At the same time, as Catholic investors, they must ensure that companies invested in are morally and socially responsible. In the past, Father Jabo and diocesan leaders relied mainly on their own scrutiny of specific investment options to gauge alignment with Catholic teachings. Recently, however, they sought out the services of a professional investment management firm that creates customized portfolios that seek above market returns while also aligning with the U.S. Conference of Catholic Bishops (USCCB) Socially Responsible Investment Guidelines.
Father Jabo’s journey to become an education leader has taken surprising turns, and the challenges facing the three schools remain significant. But, as a new decade begins, the Diocese of Erie is looking forward – and is poised to provide a well-funded, seamless, faith-based school experience for untold generations.
Catholic missionaries around the world devote their lives to helping the poorest communities alleviate suffering and improve their condition through faith and cooperation. But, often these priests and religious sisters are unable to achieve the impact they envision because they simply don’t have key equipment or lack sufficient resources. In many such cases, Cross Catholic Outreach acts as a bridge between vision and action by providing equipment, supplies and grants that sustain the spirit of hope and the momentum for change in these communities.
Cross Catholic was founded in 2001 by laypeople who in their missionary work worldwide had witnessed a dire need for additional resources to effect greater positive change in impoverished communities. The founders saw that priests and religious sisters were making a huge sacrifice to build a framework for success, but often lacked essential building blocks – such as establishing a feeding program without a steady supply of food or hosting volunteer physicians to diagnose illnesses but having no medicines to administer treatments.
Pursuing a mission of delivering food, shelter and hope to the poorest of the poor, Vatican-approved Cross Catholic – a 501(c)(3) nonprofit – has now given more than $2 billion in aid to help people in 36 developing countries globally. Resources and funds are channeled through dioceses, parishes and Catholic missionaries, thus cost-effectively helping the poor break the cycle of poverty while advancing Catholic evangelization. In addition to being highly effective, the organization runs lean: over 95% of expenses relate directly to supporting programs.
To grasp Cross Catholic’s impact, imagine a village where children’s health and wellbeing are being undermined by an unsafe water supply. Illnesses and deaths are tied to impure water, and some children spend hours hiking with buckets to retrieve water from distant springs, stunting their educational growth and opportunities. If clergy members serving such a community were to request help from Cross Catholic, the group – after a thorough assessment and with donors’ help – might provide comprehensive support. For this village, such support might take two forms: a “gifts in kind” of plastic pipes, valves, pumps and other supplies to connect it to a clean water source; and a “grant of aid” to pay workers to install the system, supplemented by labor from members of the community itself. The grand total for such transformative, life-saving support might be less than $20,000.
Such support is a blessing for affected communities – and also for donors in the United States, who are continually inspired by the Holy Spirit’s strength among people despite their poverty. Cross Catholic’s founders understand that members of the Church in the U.S. have a strong sense of brotherhood and sisterhood with others in the world, and want to make a difference. The challenge is that they often don’t have a clear picture of how they can help and, in particular, what impact their donations might actually have.
Cross Catholic solves this issue through transparency: their website offers donors complete details about the community in need, what the exact problems are, how local clergy are planning to address the problems, and what specific equipment, supplies or funds are required for success. The donor can support a specific project or several. Many make a family commitment or join with other members of their parishes. As projects progress, donors get updates on the work, including photos and stories about the specific families and individuals that benefited.
The organization makes extraordinary efforts to ensure that donors’ intentions are honored. This is accomplished in two ways. First, Cross Catholic builds a relationship with local clergy over time, typically starting with a small project, assessing its performance, and then moving on to larger projects. The clergy help optimize strategies by taking local conditions into account, which is key to ensuring impact and efficiency. Also, Cross Catholic has established its own international monitoring team, which visits each recipient community to ensure that funds are spent wisely and in keeping with the tenets of Catholic faith. The ties between Cross Catholic Outreach, its donors and these local communities often become very strong, extending as long as 15 years or more.
In several cases, donors who have shared in this deep relationship have established specialized endowment funds to ensure missions receive the long-term support necessary to create lasting success. Recently, one such fund was entrusted to a professional investment management firm that specializes in creating portfolios that strive for sound returns while reflecting Catholic values as articulated in the U.S. Conference of Catholic Bishops (USCCB) Socially Responsible Investment Guidelines.
For more information about Cross Catholic Outreach, visit www.crosscatholic.org