Faith-Based Investing Needs a New Definition, Says Founder of Investing with Purpose

For decades, faith-based investing has primarily functioned as a filter: avoid tobacco, avoid adult entertainment, avoid alcohol. But Steven Libman, founder of Investing with Purpose, argues this approach is a failure. “The definition that the industry has been operating under for the last 30 years is a lazy one,” says Libman, who recently built a multifamily real estate investment platform structured around faith-driven principles. “Screening is the floor. Building intentionally would be the ceiling.”

The distinction matters as capital allocation increasingly reflects values, and the gap between genuine alignment and surface-level compliance is widening. Libman warns that investors who cannot tell the difference are outsourcing their conscience to people who may not share their priorities.

“Every dollar is a vote,” Libman says. He poses a simple question: if your grandchildren inherited your portfolio, what would they know about what you believed in? He challenges investors to consider whether their portfolios reflect their values, noting that the financial industry has taught people to separate returns from values and then deploy returns philanthropically. This creates an unnecessary bifurcation, funding misaligned investments to generate returns for donation.

Libman points to the ESG sector as a cautionary tale. ESG funds marketed impact but delivered weak returns. “ESG put a dagger in the heart of values-aligned investing,” he says. “They were saying you are going to get lower returns, but we will make an impact. In fact, they were not making an impact, and they were not making a return either.” A recent study tracking ESG fund performance put total average returns well behind conventional benchmarks. The lesson is that values and returns are not incompatible; rather, using impact as a marketing hook rather than an operational framework fails.

Investing with Purpose incorporates ministry directly into its multifamily properties, providing free apartments to on-site ministry staff who run tenant engagement programming. This approach has a business logic: tenants with social connections are 45 percent less likely to move out, lowering turnover and vacancy costs. “Ministry is the moat around the investment,” Libman says. “When people say impact is going to decrease returns, we think the opposite is true. Caring is a durable business advantage.”

Transparency is another differentiator. The firm sends investors standard financial KPIs along with a ministry impact report tracking community engagement, pastoral support, and acts of service. Investors are also invited on-site quarterly for serve days. “Unlike your Wall Street investments, you can drive by it, touch it, feel it, actually see the impact that we are making, and actually be a part of that impact as well,” Libman says. This stands in contrast to the opacity of much of the ESG sector.

For investors, Libman’s framing is non-threatening. The entry point is appreciation of real estate as an asset class. The faith-based label signals operational philosophy and long-term relationships, not a constraint on returns. “Every dollar that you invest is a vote for something,” Libman says. “So when you deploy your capital, it is either going to build something you are aligned with or something that might be in conflict with your own values.”