The short version: most terms in faith-based investing are marketing labels with no fixed meaning. A handful — fiduciary, Regulation Best Interest, qualified charitable distribution, shareholder proposal, 403(b)(9) — have precise legal definitions that determine your rights and your tax bill. This glossary marks which is which, because the difference costs money.
Terms marked ⚖ have a technical or legal definition you should not paraphrase loosely.
Screening and philosophy
Biblically responsible investing (BRI). Not a legal term. An industry label for applying scriptural moral criteria to security selection. Note that the major houses deliberately use different words: Timothy Plan says “filtering,” the US Conference of Catholic Bishops says “socially responsible investment,” and Faith Driven Investor says “faith driven investing” while arguing the concept is bigger than avoiding sin stocks.
Negative screening (also exclusionary screening). Removing companies by activity or revenue threshold. The thresholds are where the substance sits: the USCCB excludes companies deriving more than 10% of revenue from contraceptives, and MSCI’s Catholic screens use a 5% revenue test for adult entertainment. Inspire assigns negative points and always excludes any company scoring below zero.
Positive screening (also best-in-class). Actively selecting for good corporate conduct rather than merely excluding bad. Inspire scores 25 positive categories; the BRI Institute’s methodology rewards things like Christian employee groups and corporate chaplains.
Divestment. Selling an existing holding for moral reasons rather than valuation. Distinct from screening, which means never buying it.
Engagement (also shareholder advocacy). Staying invested and pressing management for change. This is the USCCB’s own second strategy, stated as “Actively Work for Change.” See our guide to Christian shareholder advocacy.
SRI (socially responsible investing). The older values-first umbrella term, predating ESG by decades.
ESG. ⚖ Environmental, Social, Governance — and the precision point that matters most in this glossary. As the two dominant raters define their own products, ESG measures financial risk to the company, not morality. Morningstar Sustainalytics rates unmanaged risk from 0 to 100 where higher is worse; MSCI rates industry-relative management quality from AAA to CCC. This is why a tobacco company can carry an AAA rating.
Single versus double materiality. Whether you are measuring the world’s effect on the company (single — what ESG ratings do) or the company’s effect on the world (double — what biblical screening cares about). This one distinction contains the entire argument between the two approaches.
Impact investing. Capital deployed with an intended, measurable positive outcome alongside financial return. The secular frameworks are IRIS+ and the GIIN; on the faith side, “Avoid, Embrace, Engage” is the common formulation.
Sin stocks. Conventional shorthand for alcohol, tobacco, gambling, adult entertainment, and weapons. Worth knowing that current biblical screens have moved well past this list into abortion, IVF, embryonic stem cells, cannabis, state-owned enterprises, and corporate policy positions. Our guide to sin stocks covers the history of the term.
Fund mechanics
Expense ratio. ⚖ Annual fund operating costs as a percentage of assets, deducted from net asset value rather than billed to you. Distinguish gross from net: a net ratio reflects contractual fee waivers, and waivers expire — GuideStone’s current waivers run through 30 April 2027. Also note unitary fee structures, where the adviser absorbs all other expenses; Praxis’s new ETFs are unitary at 0.36% and 0.54%.
12b-1 fee. ⚖ An ongoing distribution and marketing fee paid out of fund assets under Rule 12b-1 of the Investment Company Act of 1940, typically 0.25% to 0.75%. Timothy Plan’s Class I shares carry no 12b-1; its Class C shares carry a 1% contingent deferred sales charge. Praxis Class A shares carry a maximum load of 5.25%.
Load. A sales charge paid on purchase (front-end) or sale (back-end). Ave Maria’s funds are entirely no-load. Mutual fund loads across the industry generally run 3% to 8.5%, which is the single largest avoidable cost in retail investing.
Tracking error. How far a fund diverges from its benchmark. The screening-specific version: CATH deliberately matches S&P 500 sector weights to minimize it, and the MSCI USA Catholic Values Index holds 402 constituents with no Apple and no Amazon — yet returned 22.70% against 21.89% for MSCI USA over the year to 30 June 2026. Screening does not automatically cost return.
Volatility weighting. Weighting index holdings by price volatility rather than market capitalization. Timothy Plan’s four established ETFs track volatility-weighted BRI indexes, which is why their returns diverge from the S&P even in years when their screens exclude little.
Advisor and legal terms
Fiduciary. ⚖ For a registered investment adviser, the SEC’s own interpretation states the duty “comprises a duty of care and a duty of loyalty,” and that the adviser “must, at all times, serve the best interest of its client and not subordinate its client’s interest to its own.” That is the strongest standard available in this industry.
Suitability. ⚖ FINRA Rule 2111 requires a “reasonable basis to believe” a recommendation suits the customer’s profile — a materially lower bar than fiduciary duty. The detail most write-ups miss: the rule’s own supplementary material says it does not apply to recommendations subject to Regulation Best Interest. For retail customers, Reg BI displaced suitability in 2020.
Regulation Best Interest. ⚖ Effective 10 September 2019 with a compliance date of 30 June 2020, codified at 17 CFR 240.15l-1. Four obligations: Disclosure, Care, Conflict of Interest, and Compliance. It raised brokers to a “best interest” standard but did not make brokers fiduciaries, and did not import the ongoing monitoring duty that applies to advisers.
Form ADV. ⚖ An investment adviser’s public filing, in parts. Part 1A is the regulatory data — ownership, assets, clients, affiliations, discipline. Part 2A is the plain-English brochure covering services, fees and conflicts. Part 2B is the supplement describing the individuals actually advising you. Part 3 is Form CRS, a two-page relationship summary. Within Part 1A, Item 9 is custody and Item 11 is disciplinary history — a distinction commonly reported backwards.
CKA® (Certified Kingdom Advisor). ⚖ A registered designation of Kingdom Advisors, not a government credential. Requires an existing professional credential or ten years of experience, a 16-module program, a proctored exam, and three references including one pastoral. Full requirements in our guide to finding a Christian financial advisor.
CFP®. ⚖ A certification mark of the CFP Board. Four requirements — Education, Exam, Experience, Ethics — and CFP professionals commit to the Board to act as a fiduciary under standards effective 1 October 2019. There were 109,482 CFP professionals as of July 2026.
CFCA®. The credential of the National Association of Christian Financial Consultants. Note the letters — it is not “Christian Financial Consultant,” which is how it is usually miswritten.
Fee-only. ⚖ Per NAPFA, whose members are required to work only within this structure, “accepting no commissions for their work.” Compensation comes directly from clients — hourly, retainer, percentage of assets, or flat fee. Distinct from fee-based, which permits commissions alongside fees and is the source of most confusion in advisor marketing.
Shareholder proposal. ⚖ This one has hard numbers, set by SEC rule. To submit, you must have continuously held $2,000 for three years, $15,000 for two years, or $25,000 for one year, and you may not aggregate holdings with other shareholders. The proposal and supporting statement may not exceed 500 words. One proposal per person per meeting. It must arrive at least 120 calendar days before the anniversary of last year’s proxy statement. Since a February 2025 amendment you must also state in writing that you can meet with the company 10 to 30 days after submitting. Resubmission is barred if a substantially similar proposal drew under 5% once, under 15% twice, or under 25% three or more times.
Proxy voting. ⚖ Voting your shares on ballot items, governed by Regulation 14A; advisers voting client proxies are subject to Advisers Act Rule 206(4)-6. This is the mechanism behind engagement — see Christian shareholder engagement.
Accounts and giving
403(b)(9). ⚖ A retirement income account that is a church plan, exempt from ERISA, available to churches and organizations associated with them. Its distinctive feature — and the reason it matters enormously to clergy — is that it can support a housing allowance designation on distributions to retired ministers. No 401(k), 403(b)(7), or IRA can do this. See our guide to financial planning for ministry workers and pastors.
Donor-advised fund (DAF). ⚖ Defined in the tax code as a fund separately identified by reference to a donor’s contributions, owned and controlled by a sponsoring organization, over which the donor has or expects advisory privileges. You take the deduction on contribution; grants are recommended rather than directed. Fee models diverge wildly — Charityvest charges nothing on cash, Daffy charges a flat $3 to $40 a month, the National Christian Foundation charges 0.90% tiering down to 0.05%, and Fidelity charges 0.60%.
Qualified charitable distribution (QCD). ⚖ A direct IRA-to-charity transfer available from age 70½, excluded from gross income rather than deducted, and able to satisfy a required minimum distribution. The 2026 limit is $111,000 per person. Unavailable from an ongoing SEP or SIMPLE IRA, and DAFs do not qualify.
Required minimum distribution (RMD). ⚖ Begins at age 73 under current law, computed by dividing the prior 31 December balance by a life-expectancy factor. Roth IRAs are exempt. The penalty for missing one is a 25% excise tax, reduced to 10% if corrected promptly.
Tithe, offering, and firstfruits. No legal definitions, and the terms that actually need distinguishing are the base and the vehicle. Base: gross or net income, and whether unrealized capital gains count at all. Vehicle: cash, appreciated stock (which avoids the capital gains tax entirely), a DAF grant, or a QCD. Giving appreciated stock rather than cash is the most commonly missed opportunity in Christian giving — you deduct the full market value and never realize the gain. Our guide to tithing and giving works through the base question.
Why precision here is a spiritual matter
“The discerning heart seeks knowledge, but the mouth of a fool feeds on folly” (Proverbs 18:15). Seeking is active. The proverb contrasts someone who goes after information with someone who consumes whatever is placed in front of him — which is a fair description of the difference between reading a Form ADV and taking an advisor’s word for how he is paid.
“Test them all; hold on to what is good” (1 Thessalonians 5:21). Vocabulary is where testing begins. An industry that can call a commission-earning salesperson “fee-based” and a risk metric “responsible” is an industry where the words are doing work, and knowing which terms are legally defined tells you which promises are enforceable.
Two practical applications. Ask any prospective advisor whether he is a fiduciary at all times and get the answer in writing. And before buying any fund, look up its gross expense ratio, not its net — because the waiver has an expiry date printed in the prospectus.
Related reading
- How to Talk to Your Spouse About Christian Investing
- Christian Investment Calculator
- Christian Finance Conferences
- Best Christian Investment Funds, ETFs, and Platforms in 2026
- Christian Investing for Millennials and Gen Z
- Christian Investing Tools and Resources: Everything You Need
- Best Christian Investing Apps
- Christian Stock Screener Tools
- Best Christian Investing Books
- The Complete Guide for 2026
