VATICAN CITY (AP) — The former monastery on a quiet residential street in Rome once sheltered Jews fearing deportation during World War II. Today, it houses the Vatican's financial watchdog agency, which is now investigating the transfer of $17 million from the U.S. arm of a Church mission to an investment fund. The Vatican's Institute for the Works of Religion (IOR) is looking into the transaction, which was made to the Mission Investment Fund (MIF) in New York.
The MIF is a nonprofit impact investment fund that works to build a future where entrepreneurs of color and marginalized communities can thrive. The fund was created by the Evangelical Lutheran Church in America (ELCA) in 1911 to support the church's mission work. Today, it manages over $1.4 billion in assets for ELCA congregations and ministries.
According to a statement from the ELCA, the transfer of funds was part of a "long-standing practice" to invest excess funds in the MIF. The statement also emphasized that the transfer was not a donation, but an investment, and that the ELCA has "no control over the use of the funds by the MIF."
The Vatican's investigation comes amid heightened scrutiny of the Catholic Church's finances. In recent years, the Vatican has made efforts to improve its financial transparency and compliance with international standards. In 2019, it established the Supervisory and Financial Information Authority (ASIF) to oversee all Vatican financial activities.
The ASIF is now working with the IOR to investigate the MIF transfer. The Vatican's concern is that the funds may have been used for speculative or unethical investments, rather than mission-aligned projects.
The MIF has not commented on the investigation, but it has a strong track record of investing in socially responsible projects that align with its mission. Its portfolio includes investments in affordable housing, renewable energy, and community development.
The MIF is not the only impact investment fund that has come under scrutiny from regulators. In recent years, there has been growing concern about the lack of transparency and accountability in the impact investing industry. Some critics argue that impact investment funds may prioritize financial returns over social and environmental impact.
Despite these concerns, impact investing continues to gain popularity among investors who want to make a positive difference in the world while earning a financial return. According to a recent report from the Global Impact Investing Network (GIIN), the impact investing market is now worth over $715 billion.
Many investors are drawn to impact investing because it offers a way to align their values with their financial goals. By investing in funds like the MIF, they can support social and environmental causes while earning a competitive return on their investment.
The MIF's investment strategy is guided by its mission to support the work of the ELCA and promote social and economic justice. Its portfolio is diversified across a range of asset classes and sectors, including fixed income, public equity, private equity, and real assets.
The MIF also offers a range of investment options, including its Demand Investments, which allow investors to add and withdraw funds at any time and earn a competitive rate of return. According to its website, Demand Investments are now earning as high as 2.50% APY*, making them an attractive option for investors who want liquidity and flexibility.
The MIF's focus on impact investing aligns with a growing trend among investors who want to make a positive difference in the world. As more investors seek to align their values with their financial goals, impact investing is likely to continue to grow in popularity.
