When retail giant Wal-Mart rejected a request by the Timothy Plan to remove copies of Cosmopolitan magazine from racks in its checkout lines, the mutual fund group, which invests based on biblical principles, showed its displeasure by selling 9,200 shares of the store's stock.
When Kimberly Clark, which makes Huggies diapers and Kleenex tissue, began matching employee contributions in Planned Parenthood, the Ave Maria Mutual Funds, which manages its money according to Catholic principles, promptly sold 30,000 shares.
Increasingly, the growing number of mutual funds that invest according to religious principles have also become vocal advocates on a host of social issues, say industry watchers.
Such religious funds have increased dramatically in the United States. From just 34 such funds in 1999, the sector has increased to 75 funds in 2002, according to MMA Praxis Mutual Funds, a group of funds run by the Mennonite Church. That 121 percent jump compares to a mere 16 percent rise in the number of new mutual funds overall.
And they're not shy about their activism. This year has so far been the most active ever for religious shareholder advocates. Members of the Interfaith Center on Corporate Responsibility, a New York-based coalition of faith-based institutional investors, have filed 140 shareholder resolutions with 92 companies this year.
"They file the lion's share of social [shareholder] resolutions in the United States," said Tracy Rembert, director of shareholder programs for the Social Investment Forum, a Washington-based nonprofit group dedicated to promoting socially responsible investing.
The Timothy Fund crusade to get Cosmopolitan taken out of Wal-Mart's checkout aisles started last year after the fund's president, Arthur Ally, visited a store and was taken aback by the magazine cover's headlines.
"I handed [the magazine] to a supervisor and asked her if she would please read the cover to me and she turned beet-red and said, 'No,' " said Ally. "If it's too embarrassing to read, why would you have it there?"
Ally said he is just one of a group of ministries pressuring Wal-Mart to move "sexually explicit magazines" from the checkout lines to the magazine racks, not to quit selling them.
But Wal-Mart spokesman Tom Williams said each individual store decides how to stock its checkout aisles. "There are organizations that do approach us, and we try to listen to everybody," said Williams. "But our decisions are based on our customers."
As for the magazine itself, it responded to the campaign by saying, "American women have made Cosmopolitan the No. 1-selling women's title on newsstands in the U.S. because of its empowering information about relationships and careers, health and beauty, and other issues important to them. It's a magazine written by women and for women, and its editors believe in the First Amendment right to freely publish and display the magazine."
Similarly, the dispute with Kimberly Clark stock began late last year when the Ave Maria mutual fund, managed by the Schwartz Investment Counsel of Bloomfield Hills, Mich., heard the tissue paper producer had starting contributing to Planned Parenthood.
Schwartz Investment Counsel President George P. Schwartz says selling the shares was in line with the fund's beliefs. "If it's in our portfolio, we sell the stock and write a letter to them telling them why we sold it," he said. "If they're a known violator of our Catholic principles, we don't buy the stock to start with."
Kimberly Clark says it was merely matching contributions its employees were making to different charities, which could include Planned Parenthood if the employee chose.
Company spokesman Dave Dickson said the firm communicated that to Ave Maria, but the fund group sold its shares anyway. He noted the sale of 30,000 shares did not significantly affect Kimberly Clark's performance since the company had some 510 million shares outstanding at the end of 2002.
"We believe employees should have the opportunity to support their communities in a way that they feel benefits their communities," said Dickson.
The overall clout of the religious funds is less than clear. Run by smaller firms and with little or no marketing budgets, they manage a lot less money than more mainstream funds.
Assets in religious mutual funds totaled around $4.42 billion in 2002, a drop in the bucket of the $4.8 trillion currently under management by all mutual funds in the United States.
But fund watchers say investing according to one's religious principles is gaining popularity, especially as more funds pop up catering to different belief systems.
"People are putting their money where their beliefs are and I think that's a pretty strong glue," says Robert Gynn, an analyst at Chicago-based mutual fund tracker Morningstar.
Success in the quest to change companies whose shares they own varies. Shareholder proposals are often difficult to pass, especially if there is a religious bent to them.
MMA Praxis, for example, launched an unsuccessful fight two years ago to try to get AT&T's cable systems to reconsider its more explicit adult cable programming, such as "The Hot Network."
AT&T's cable unit, which was taken over by Comcast while the fund company was pursuing the issue, did not drop the network. Neither AT&T nor Comcast would comment on the matter.
"It wasn't so much as an attempt to stop people's choices," said Mark Regire, MMA Praxis' stewardship investing services manager. "It was to get them to look at where is this taking us as a culture, where is this taking them as a company?"
MMA Praxis also recently led a shareholder resolution that called on soft-drink giant PepsiCo to report on how it plans to deal with the business and employee impact of AIDS in Africa. The resolution received 7.5 percent shareholder support, an amount Regire says he considers good for a social resolution.
The kind of response funds get "all depends on the company," said Morningstar's Gynn. "I've heard some companies say, in a tactful manner, 'We acknowledge your concerns, but we're proceeding.' … If it's something they can do without affecting their bottom line too much, they're very receptive to it."
Not surprisingly, reaction to religious shareholder advocacy is mixed among the public in general. While more secular causes such as promoting human rights and better working conditions in factories overseas have proven popular, other causes that involve controlling content are more controversial.
"This is chilling and frightening to anybody who loves free exchange of ideas," said pop culture commentary Richard Walter, a UCLA film school professor.
Others note that the free flow of ideas is exactly what will keep religious funds continuing their activism with corporate America.
"Using economic clout to influence sellers or retailers is a very effective and productive mechanism," said Mercer Bullard, founder of Oxford, Miss.-based mutual fund shareholder advocacy group Fund Democracy.
"It's the same mechanism that [consumer advocate Ralph] Nader has used and other causes have used, and it's taking advantage of the freedom of the act of expression itself."