For decades, faith-based investing has been defined largely by what it excludes: tobacco, adult entertainment, and alcohol. But according to Steven Libman, founder of Investing with Purpose, this narrow definition has failed investors who seek genuine alignment between their portfolios and their beliefs.
“The definition that the industry has been operating under for the last 30 years is a lazy one,” said Libman, who built a multifamily real estate investment platform structured around faith-driven principles. “Screening is the floor. Building intentionally would be the ceiling.”
The distinction is critical in an investment landscape where capital allocation increasingly reflects values. Libman warns that investors who cannot differentiate between surface-level compliance and genuine alignment may be outsourcing their conscience to fund managers who do not share their priorities.
Libman’s core premise is straightforward: every dollar invested is a vote for something. He challenges investors to consider what their portfolio would reveal about their beliefs if inherited by their grandchildren. “A question I asked at an event recently was, if you turned your portfolio over to your pastor, is there anything in there you might feel embarrassed about?” he said.
The conventional wisdom of separating investment returns from values and deploying returns philanthropically creates an unnecessary bifurcation, Libman argues. “Why fund something misaligned with your values in order to generate returns you then donate to causes that reflect them?”
The cautionary tale, according to Libman, is the ESG sector. “ESG put a dagger in the heart of values-aligned investing,” he said. “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 found total average returns well behind conventional benchmarks.
Libman’s firm integrates ministry into its operations, providing free apartments to on-site ministry staff who organize community events and offer support to residents. The business logic is clear: tenants with strong social connections are 45 percent less likely to move out, reducing turnover and vacancy costs. “Ministry is the moat around the investment,” Libman said. “When people say impact is going to decrease returns, we think the opposite is true.”
Transparency is a key differentiator. Libman’s firm sends investors both financial KPIs and a ministry impact report tracking community engagement and pastoral support. Investors are also invited on-site 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,” he said.
For investors considering values-aligned portfolios, Libman’s message is non-threatening. Real estate is a familiar asset class, and the question becomes what kind of operator best reflects one’s principles. “Every dollar that you invest is a vote for something,” he said. “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.”
