Previous Months' Topics

Money and Morality

Knights of Columbus investment chief talks about handling money according to Catholic principles

Most Catholics know about the Knights of Columbus, but many are not aware that the Catholic fraternal organization operates a life insurance and annuity program that offers financial security to members and their families. With its international headquarters in New Haven, Connecticut, where the Order was founded in 1882 by the Venerable Father Michael McGivney, the Knights of Columbus has some $75 billion of life insurance in force covering its policyholders.

Anthony Minopoli keeps tabs on the market from the Knights of Columbus investments department.

Anthony Minopoli keeps tabs on the market from the Knights of Columbus investments department.

The man responsible for investing the Order’s money at the Supreme Council office is Anthony Minopoli, who became Chief Investment Officer in 2005. He has steered the Knights of Columbus through the turbulent recession and brought a healthy return while investing according to Catholic principles.

Minopoli, 41 years old, became a member of the Knights in 1994, and is past grand knight of two local councils in Connecticut. He is married and has two children. He spoke to Fathers for Good about money and morality.

Fathers for Good: In its life insurance and annuities, the Knights of Columbus avoided the worst effects of the recent economic meltdown. What did you do right?

Minopoli: One of the things that has long been a hallmark of the Knights of Columbus is our conservative investment strategy, and we make sure that we maintain that philosophy in good times and bad. We want to generate the highest rate of return that we can, but we want to do it while maintaining the greatest level of risk control in the portfolio. So there are places where we will take risk in the portfolio, but we do it after careful and thoughtful analysis.

But the vast majority of our investments, nearly 90 percent, is allocated to very high-quality bonds. We really focus on the basics, and work hard to understand the company we are investing in, to understand what they do, and their revenue model.

In addition, we live by the basic tenet that there’s no transaction that we have to make. There’s always another day, there’s always another opportunity. If something’s overly complex, if something doesn’t quite add up, we don’t get involved, even if everyone else is buying into it.

As Supreme Knight Carl Anderson has said many times, we didn’t get involved in the subprime market not because we didn’t understand it, but because we did understand it and saw the risks.

FFG: How do you invest according to Catholic principles?

Minopoli: One of the things that our membership should realize, and that they should be proud of, is that we run an ethically screened portfolio. Our portfolio is in compliance with the teachings of the Catholic Church. We basically screen companies for abortion, contraception, human cloning, human embryonic stem cell research, for-profit health care that pays for any of the aforementioned, and pornography.

Yet still our equity results have been competitive with the market as a whole, and that is something also our members can be very proud about.

Our equities have outperformed the Standard & Poor’s 500, which is the big equity index, over the past five years and over past 10 years. We’re a shade behind over three years, but over five and 10 years we’re well ahead. It may be that companies which operate in a moral manner perform better in aggregate, but the fact is that you don’t have to engage in unethical practices to make money. In fact, I can tell you that running our portfolio ethically has not forced us to offer less compelling results. We can feel good about that.

FFG: These ethical concerns must be unusual for the investment chief.

Minopoli: Yes, but they make our investments more meaningful.

I have a friend who works at a large brand-name investment firm in New York. When I took this job, she said to me that it was wonderful that I would work for a company where the goal each day was not simply to make more money for the sake of making more money. There’s a higher purpose to what we do.

One of the reasons I was thrilled to take this job was exactly that. Some of the return that we generate will be used for supporting the charitable and religious causes of the Knights of Columbus. I get to do something I love, for a company I love, and to do it for a higher cause that helps better the lives of so many of our members and those whom we help through charity.

FFG: Talk about the moral nature of handling other people’s money.

Minopoli: There’s a moral obligation I have to the company, to our membership, and by extension to their families who are covered under our policies.

I explain it this way. At the Knights of Columbus, we don’t have customers, we have members. As a longtime Knight myself, I know what this means, and it guides everything I do.

We really do take seriously, each and every day, the fact that we are managing this money for our members, for brother Knights and their families. They are counting on us to give them the financial security and return that they deserve.

When I go to my council meeting each month, as Grand Knight and now as Past Grand Knight, I have to look those guys in the eyes and know in my heart that I have done the best possible job for them and their families. They work hard to put food on the table, and their kids through school, to pay the mortgage each month, and save for retirement – and we have to work hard on our end to see that they get the full return on what they are investing in us as the Knights of Columbus.

We are a Catholic organization, and managing money ethically is a central part of who we are and what we are trying to accomplish in the long term.

For more information on the Knights of Columbus, visit www.kofc.org.