Faith-Based Investing Redefined: Beyond Screening to Intentional Capital Allocation
Steven Libman, founder of Investing with Purpose, argues that the traditional screening approach to faith-based investing is insufficient, advocating for intentional capital deployment that aligns with values and generates both community impact and strong returns.
For decades, faith-based investing has been defined largely by what it excludes: tobacco, alcohol, and adult entertainment. But Steven Libman, founder of Investing with Purpose, argues this approach is a lazy shortcut that fails to align capital with genuine values. Libman, a 15-year industry veteran, has built a multifamily real estate platform explicitly structured around faith-driven principles, and he believes the industry needs a new definition.
"The definition that the industry has been operating under for the last 30 years is a lazy one," Libman says. "Screening is the floor. Building intentionally would be the ceiling." The distinction matters because in an investment landscape where capital allocation increasingly reflects values, the gap between genuine alignment and surface-level compliance is widening. Investors who cannot tell the difference, Libman argues, are outsourcing their conscience to people who may not share their priorities.
The core premise behind intentional faith-based investing is straightforward: capital goes somewhere, and where it goes signals something. Libman poses a simple but disorienting question to prospective investors: if your grandchildren inherited your portfolio, what would they know about what you believed in? He also asks whether there is anything in a portfolio that might embarrass an investor if shown to their pastor. "It is not to convict anyone," he says. "It is to get people thinking in a different way, because we have not been taught to think this way."
Libman cautions against the ESG sector, which he says "put a dagger in the heart of values-aligned investing." ESG funds marketed themselves on impact but often delivered weak returns and questionable impact. "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," he notes. A recent study tracking ESG fund performance put total average returns well behind conventional benchmarks. For Libman, the lesson is that funds using impact as a marketing hook rather than an operational framework tend to deliver on neither.
Investing with Purpose's approach embeds ministry directly into its multifamily properties. On-site staff run tenant engagement programming—movie nights, farmers markets, and hospital visits—and receive free apartments. The business logic is clear: tenants with six or seven friends within the same complex are 45 percent less likely to move out, reducing vacancy and unit-refresh 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, not a disadvantage."
Transparency is a key differentiator. Libman's firm sends investors not only financial KPIs but also a ministry impact report tracking community connections, pastoral support, and acts of care. 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.
For investors, the entry point is often real estate as an asset class. From there, the question becomes what kind of operator and structure best reflects your principles. "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."