Should excess money be given away or reinvested?
“Stop worrying about your money, your gold and silver,” the preacher thundered. “You can’t take it with you anyway, and even if you could it would only melt.”
This story, possibly fictitious, makes a harsh point about money – that it is wicked and its owners are doomed.
That feeling has softened in Mennonite circles. Increasingly, money is seen as a tool for potential good (as in the outpouring of donations following disasters, such as the tsunami in South East Asia or Hurricane Katrina).
Another shift has been a growing sense that “wealth redistribution” is not the only way to handle excess, but that “wealth creation” is a useful way to produce economic opportunity.
Both approaches compete for the same donor dollars. People of means get plenty of attention from fundraisers who want to help them answer the question, “How shall I then give?” Should they donate their excess to the Mennonite high school’s new auditorium? To a college building fund? To a mission agency?
Or, in the case of a businessperson, “Should I re-invest it in my company to create more jobs and expand the community’s economic base?”
The questions suggest that Mennonites have become more comfortable with their rising prosperity, and that traditional Mennonite unease about investment may be changing.
Mennonites are no strangers to wealth. Perhaps they were predisposed to do well. Hard work, thrift, and an aversion to luxury have often led to financial well-being.
For hundreds of years Mennonites have had plenty of “practical, tangible wealth” such as farmland, mills, factories, and trucking firms, says Calvin Redekop, a sociologist with special interest in Mennonite economic behaviour. The rise of surplus, or “intangible paper wealth,” is more recent.
For generations the church monitored this steadily increasing wealth. Confessions of faith warned against conspicuous consumption. But as Mennonites eased into modernity such pronouncements have faded.
We are rich
How wealthy are Mennonites? “The predominating bulk are becoming affluent,” wrote Redekop in Anabaptist/Mennonite Faith and Economics. He pointed to data in the 1975 demographic study by J. Howard Kauffman and Leland Harder (Anabaptists Four Centuries Later), which showed the income of Mennonites to be 12 percent above the North American average. A follow-up study a dozen years later showed Mennonites holding their own with a median income of $30,000 to $40,000 compared to the U.S. population median income of $32,274.
Other Kauffman and Harder data further showed that North American Mennonites were not clumped at the low-wage end of the spectrum. In the 1970s, 10 times as many were farm owners or managers, and twice as many held professional or technical occupations. Their proportion of business ownership and management was slightly higher than the general population.
There is little hard data on where Mennonites are today, but the general perception seems to be that they’re gaining monetary vigour. They send their children to costly private schools and colleges. Parking lots at Mennonite churches glisten with the latest SUVs and minivans. Churches in the citrus states bulge in winter with Mennonite “snowbirds” who can afford to travel.
Michael Yoder, a sociologist at the University of Iowa who has studied Mennonite occupations, says he suspects there are fewer Mennonites in the lower economic tier than the general North American population, though perhaps more than in the past because of the growth in urban and minority congregations.
Yoder also allows that “we may now have more wealthy persons than we used to have,” though some of this increase may have been offset by the departure of some wealthy Mennonites who were made to feel uncomfortable and switched to other denominations.
Invest money, help others
Over the years Mennonites have been known for their “economic witness.” Do we still have anything to teach North American culture on how to use discretionary wealth?
Some would contend that Mennonites are helping the Christian community develop a more mature view of wealth and investment. In 1980 Goshen College economist Carl Kreider’s landmark book The Christian Entrepreneur was the first public suggestion of the role capital and entrepreneurship might play in the modern economy. The rise of Mennonite Economic Development Associates (MEDA) and its pioneering of micro-credit illuminated for Mennonites, and the larger development “industry,” the role of productive investment as an ongoing way to combat poverty.
These and other influences helped shape an emerging recognition that poor people could be helped not only by “wealth redistribution” (giving away your excess) but also by “wealth creation” (using surplus to generate new jobs and economic opportunity). The acceptance of this new view was symbolized by the 25th anniversary re-issue of Ron Sider’s Rich Christians in an Age of Hunger, which had been a bible of wealth redistribution and now also carried a ringing endorsement of wealth creation (through microenterprise assistance, for example) as a legitimate way to make a dent in poverty.
A prominent voice in this unfolding awareness has been James Halteman, a Mennonite economist who teaches at Wheaton College in Illinois. His writings have helped focus how Gospel teachings on materialism can be understood today.
Halteman points out that the ancient world understood three ways to use economic surplus: consumption in lavish living, hoarding for the future, and direct charity (wealth redistribution). The modern world has an additional use for surplus: productive investment (wealth creation). Halteman says accumulating resources as productive capital is a legitimate, even desirable, act of stewardship.
“This distinction between productive and consumption wealth has not been made carefully enough in Christian circles,” he says, “and the result has been that businesspersons with large productive assets have often been misunderstood and unappreciated.”
An example is the “bigger barns” story in Luke 12, Halteman says. The barns are a way to guarantee the owner’s future consumption, not as a vehicle for increased production that benefits others.
“The contemporary farm, factory or office building may well function, not as a store of existing resources, but rather as a vehicle for the production of future resources in greater and greater quantities.”
A culture of waste
While many Mennonites still do not allow their paper wealth to affect their lifestyle, Calvin Redekop fears that others are falling prey to a kind of consumptive competition that can be seen in the parking lots of some Mennonite churches – “You buy an SUV, I’ll buy a bigger one.”
“Mennonite population is reflecting the economist’s axiom that everyone lives at the top of their financial ability,” says Redekop. “You mortgage yourself to live at the highest consumptive level you can with the resources available.”
Many affluent Mennonites are too easily choosing a lifestyle “that mimics our North American culture’s wasteful and unfair taste for luxury,” he says.
Perhaps the emerging view of productive investment – wealth creation for the poor – will catch the imagination of a new generation of Mennonites who can distinguish between conspicuous consumption and using wealth in a creative Anabaptist way.
Multiply your blessings
The gift of capital to an entrepreneur in a less affluent society can be a double blessing. That’s the view of Mennonite Economic Development Associates (MEDA). It’s also the idea behind their microfinance programs, helping North Americans provide small loans to people in developing countries such as Haiti, Jamaica, Bolivia, Nicaragua, Tanzania, Russia, Mozambique, and Romania.
MEDA Trust – a unique online microfinance site – offers an interactive experience by allowing users to create a personal account, add money to their portfolio, and then choose a Third World entrepreneur they’d like to fund. The money added to the portfolio is a donation to MEDA and is used to finance the loan. When the initial investment is repaid – and repayment rates at many microfinance institutions, at 98 percent, rival those of large Western banks – the money returns to the portfolio so users can choose another investment.
Parents can pass along a tradition of giving to the next generation by encouraging their children to invest money from a paper route or allowance in a loan to an overseas entrepreneur, young or old. Kids can see how even a small contribution of $25 or $50 can make a difference in another person’s life.
Stories from Nicaragua
Nusly Alemán and her family operate a piñata business out of their home in Nicaragua. Because piñatas are so popular, Nusly has no problem selling her product. In fact, there were times when customer demand exceeded her supply. Thankfully, loans from MiCrédito, a microfinance institution, helped change that. Nusly used the loans to buy greater amounts of raw material, which enabled her to increase production. The Alemán family used their profits to invest in their business and for personal use. They’ve expanded and improved their facilities, and bought electronics for their home.
Ivinia started distributing her freshly baked bread by bicycle. Soon the demand grew and she dreamed of growing her business. She needed to produce more bread, but didn’t have the capital. When she heard about MiCrédito, she was excited and applied for a loan at a reasonable interest rate. Ivinia used the money to buy flour in bulk and quickly expanded her business. She no longer needs a bicycle – she now owns a car and a truck!
For the price of a few lattes, poor people can create their own wealth – which means a solid roof over their head, nutritious food, clothing, and an education for their children. These small business owners then reinvest their surplus and grow their companies, creating employment for others in the community and boosting the local economy. And that’s how a small blessing keeps multiplying.
—Linda Whitmore for MEDA