November 30, 2025 | Sydney England
Faith communities were impact investors long before the term existed. As early as the 1700s, Quakers refused to profit from the slave trade and weapons, and John Wesley’s Methodist teaching warned against “harmful” gain—early versions of ethical screens. In the modern era, faith investors organized formally in 1971 with the founding of the Interfaith Center on Corporate Responsibility, which used shareholder advocacy to press companies on apartheid, labor, and environmental harms. That same year, two Methodist ministers launched Pax World, the first widely available socially responsible mutual fund. Through the 1980s–90s, denominations refined guidelines (e.g., U.S. Catholic bishops) and expanded tools, from screened public funds to community development lending and early microfinance. Mennonite, Jewish, and Islamic investors likewise built robust traditions shaped by stewardship, justice, and prohibitions against harmful finance.
In the 2000s–2010s, faith institutions helped mainstream ESG while accelerating place-based investing through deposits in CDFIs, affordable-housing funds, and green bonds. During this time, faith institutions accelerated divestment from fossil fuels, with 36% of the nearly 1,600 institutions committed to divestment representing faith-based organizations.[i] Major denominations, including the Episcopal Church, Church of England, and Presbyterian Church (USA), completed full fossil fuel divestment between 2022-2024. Many paired fossil-fuel divestment with financing for renewable energy and efficiency at congregational facilities.
While the means and manner of faith-based impact investing have changed over the years, the through-line is consistent: align money with mission, leverage ownership to drive change, and direct capital to people and places historically left out. Faith-based institutions have shaped impact investing’s past and are essential for its future. That’s why on October 23, 2025, Sydney England, GSIC’s Executive Director, leapt at the chance to present at the Georgia Interfaith Public Policy Center’s (GIPPC) 2025 Legislative Summit. This gathering invited the faith-based, nonprofit, community development, and municipal leaders in attendance to consider how impact investing can be a tool for community wealth-building.
The Faith-Based Impact Investing Landscape:
A Growing Field with Two Distinct Pathways
Major religious groups globally are estimated to control approximately $5 trillion of total assets. Faith-based impact investing grew within a broader impact investing boom that saw the amount of AUM invested for impact increase from an estimated $502 billion to $ 1.571 trillion between 2019-2024. Today, religious institutions currently invest between $200 billion and $400 billion in impact investments across the United States. This impressive figure actually represents just 11% of what they could potentially invest.
It’s important to note that not all faith-based impact investing looks the same. Further examination of this market data reveals two distinct approaches — public markets ESG/SRI and private markets place-based impact investing (often through a community development lens). While distinct, these approaches function not as mutually exclusive options but as complementary strategies along a spectrum of capital deployment, each with distinct risk-return profiles, liquidity characteristics, and institutional capacity requirements. Understanding these differences helps faith institutions select approaches that match their specific circumstances, values, and goals.
Risk-Return Profiles
ESG investing targets market-rate returns while managing risk through screening and engagement. Faith institutions implementing ESG strategies expect the same 7-10% annual returns from equities and 2-5% from bonds as conventional portfolios, with the added benefit of avoiding companies whose practices create long-term financial risks. Morgan Stanley research shows ESG funds achieved median returns of 1.7% versus 1.1% for traditional funds in H1 2024, while Houston Christian University found “no clear performance benefit or penalty” compared to conventional funds. The risk management comes from avoiding companies with poor environmental practices, weak governance, or social controversies that could damage long-term value.
Place-based impact investing through a community development lens explicitly accepts different risk-return combinations to achieve local social impact. Returns typically range from 0-4% for loan fund investments, though some structured products achieve market rates through tax credits or blended finance. Calvert Community Investment Notes offer 0-3% over 1-10 year terms, with investors choosing their rate. Notably, one-sixth voluntarily select 0% returns to maximize local impact. While this suggests that impact-first and impact-centered investors are willing to tolerate lower financial returns and greater risk, decades of data demonstrate the strong financial merits of these investments. Opportunity Finance Network reports less than 0.001% loss rate across its entire historical portfolio, while community CDFI banks averaged 0.37% net charge-offs from 1984-2024 versus 0.89% for larger banks. The trade-off isn’t higher risk but lower returns in exchange for direct, measurable benefit to specific communities.
Liquidity Characteristics
ESG strategies maintain the same liquidity as conventional investments. Faith institutions can buy or sell ESG mutual funds and ETFs daily, with settlement in 1-2 business days. Individual ESG-screened stocks and bonds trade on public exchanges with instant pricing and standard settlement periods. This liquidity allows institutions to rebalance portfolios, meet unexpected cash needs, or respond to market conditions without restriction. A church needing funds for emergency repairs can liquidate ESG holdings as easily as conventional investments.
Place-based investments require longer commitment periods to enable community development work. CDFI certificates of deposit lock funds for terms ranging from 3 months to 10 years, providing the patient capital that local financial institutions need to make long-term community loans. Investments in local loan funds typically require a minimum one-year commitment, often 3-5 years, with limited or no early redemption options. Direct loans to neighborhood affordable housing projects or local small businesses may extend 5-10 years with quarterly or annual interest payments but no principal repayment until maturity. GIIN survey data shows 19% of faith-based investors cite “concerns about exit options and liquidity” as a significant challenge. This illiquidity isn’t a flaw but a feature. Patient, impact-centered capital enables CDFIs to make transformative investments in communities that conventional lenders consider too risky.
Institutional Capacity Requirements
ESG investing requires minimal additional capacity beyond conventional investing. A small church with volunteer trustees can implement ESG through a single mutual fund selection, relying on the fund manager’s expertise for screening and engagement. Products like Inspire’s PTL ETF at 0.09% expense ratio or Timothy Plan funds with no minimums on qualifying plans make implementation as simple as choosing any index fund. Financial advisors increasingly offer ESG options, though only 37% of Christians with advisors have heard about values-based investing from them. Reporting involves standard financial statements with optional impact metrics provided by fund companies.
In some cases, place-based impact investing can create new or additional work for institutional staff. Let’s take a simple investment in a CDFI for illustrative purposes. For a faith-based institution to practice good governance and satisfy fiduciary duties, information gathering and analysis are needed for pre- and post-investment decision-making. Due diligence requires evaluating local CDFIs’ financial strength, understanding their role in specific neighborhoods, assessing their relationships with community partners, and verifying their track record of local impact. Ongoing relationship management includes site visits to funded projects, meetings with local borrowers and community members, and verification of neighborhood-level outcomes. Custom reporting must track both financial performance and community development metrics, such as jobs created in specific zip codes, affordable housing units preserved in particular neighborhoods, and small businesses supported in targeted commercial corridors. 41% of faith-based investors struggle to find investment opportunities that align with their faith tenets and values, partly because identifying and evaluating place-based investments requires deep local knowledge and community relationships. Smaller institutions often need consultants, specialized advisors, or partnerships with intermediaries, such as denominational foundations, to effectively access place-based or local impact investing.
The Uniform Prudent Management of Institutional Funds Act, adopted by Georgia and 48 other states, establishes three core duties for religious institutions managing any invested funds.¹⁶ The duty of care requires acting as a prudent investor would, conducting thorough due diligence, and considering the organization’s purpose, return objectives, distribution needs, and overall portfolio composition. The duty of loyalty demands avoiding personal conflicts. The duty of obedience requires using resources to further the organizational mission.
Faith institutions benefit from essential protections. The church plan exemption from ERISA recognizes the separation of church and state by exempting religious pension plans from most federal requirements. First Amendment protections guarantee the right to invest in accordance with religious beliefs. As the Interfaith Center on Corporate Responsibility affirms, “faith-consistent investing is a fundamental right protected under the First Amendment.”
Most successful implementations establish Investment Committees separate from boards, including CPAs, bankers, and financial planners from the congregation. These committees conduct due diligence, monitor performance, and meet quarterly. Some also create Ethics Committees to evaluate alignment with faith values, a governance innovation unique to religious investing.
How Faith-Based Institutions Build Impact Investing Programs
Many faith communities are drawn to impact investing because it lets their money reflect what they preach. It honors stewardship and justice and – in the case of local investing – shows up in places people can see, financing a neighborhood business, preserving affordable homes, or installing solar on a fellowship hall that lowers the church’s utility bill. Just as important, this is not charity dressed up as investing. There are vehicles that offer competitive, predictable returns and can be matched to a church’s cash needs and risk limits. When leaders connect the theology to visible local outcomes and sound financial practice, the case becomes compelling for boards and congregations alike.
While compelling, these motivating factors are often not enough to help faith-based institutions overcome common obstacles. Trustees worry about fiduciary duty and financial returns. Limited staff resources are already stretched thin. Investment policies and advisor relationships maintain the status quo. The path through is practical and incremental.
The Faith Impact Project has developed an eight-phase journey refined through work with Catholic, Protestant, Jewish, Buddhist, and Islamic organizations.¹¹ The timeline varies dramatically based on size and complexity. Small churches often complete initial investments within 12 to 18 months, while large denominational bodies might take several years to fully transition portfolios. Understanding each phase in detail helps organizations avoid common pitfalls and accelerate implementation.
Beyond Traditional Investments: Stories from Georgia & Beyond
Here in Georgia, faith communities are pioneering creative capital deployment beyond conventional investment vehicles:
- Real Estate Development Partnerships: Following Enterprise Community Partners’ national models, several Atlanta churches are exploring property development. Unlike simple land sales, these partnerships structure ground leases or joint ventures where churches retain ownership while developers create affordable housing. Churches receive steady lease income, discounted units for members, and community spaces within developments. Moreover, Mayor Dickens’ Faith-Based Development Initiative, launched February 2022, aims to create or preserve 20,000 affordable homes by 2030, with 2,000 units (10% of total) targeted for church-owned land. Over 200 faith leaders expressed interest, with approximately 15 actively developing projects representing 1,000 planned affordable homes. The initiative provides up to $25,000 in seed money per institution, technical assistance covering zoning and entitlements, 1-2 visioning sessions, technical workshops on housing development, peer mentoring from successful faith developers, connections to predevelopment capital, and subject-matter expert networks. Partners include the Office of Housing and Community Development, Invest Atlanta, Atlanta Housing, and Enterprise Community Partners (which received a $1.3 million Wells Fargo grant supporting 15 faith organizations).
- Business Incubation and Acceleration: Faith Driven Entrepreneurs’ Atlanta chapter connects Christian entrepreneurs with church-based investors. Programs like Ocean Accelerator provide 16-week intensive training with $25,000-$100,000 in seed funding. Several Atlanta churches have created informal investment clubs where members pool $5,000-$25,000 each to invest in Christian-owned startups, combining financial returns with discipleship and mentorship.
- Green and Social Bonds: Larger Georgia churches increasingly purchase municipal green bonds that fund local infrastructure. Fulton County’s recent $200 million green bond for energy efficiency improvements offered tax-free returns while supporting community infrastructure. Several churches are exploring social bonds that fund affordable housing, with the Atlanta Housing Authority considering faith-based investment tranches for future issuances.
Takeaways & Action Steps for Georgia’s Faith-Based Institutions
Movement builds momentum. Each congregation that begins this journey strengthens the entire ecosystem, creating more opportunities, better products, and clearer pathways for those who follow. Georgia congregations ready to begin have distinct pathways that match their capacity and comfort level.
- Start where the friction is lowest: your idle cash. That $50,000 sitting in a traditional bank earning minimal interest could be moved tomorrow to Hope Credit Union’s Transformational Deposit program, which helps finance Black-owned businesses and affordable housing across the Deep South while earning competitive returns. The process takes one phone call and basic paperwork. These deposits are federally insured up to $250,000 through the National Credit Union Administration, making them as secure as any traditional bank account.²²
- For congregations nervous about the leap, CDFIs offer the perfect bridge. These aren’t exotic instruments but federally insured deposits that happen to build communities. For instance, when congregations move funds to Carver State Bank, founded in 1927 and currently Georgia’s sole Black-owned bank, those deposits help finance mortgages and small business loans in underserved communities. The bank operates as a certified CDFI, meaning it specifically serves populations and communities that traditional banks often overlook.²³
- Fixed income opens surprising doors for smaller congregations. Through Calvert Impact Capital’s Community Investment Note, you can start with just $20 when purchasing online, though brokerage purchases require $1,000 minimum.²⁴ Your investment joins a portfolio that has made over 1,000 loans in more than 100 countries since 1995, financing everything from affordable housing in Georgia to microfinance globally.²⁵ The notes offer terms from one to ten years with returns currently ranging from 1 to 4 percent, and investors have historically received 100 percent repayment of principal and interest.²⁶
- Several denominational fund families screen investments based on faith values. New Covenant Funds, sponsored by the Presbyterian Foundation, exclude companies deriving significant revenue from tobacco, alcohol, gambling, and military contracts while actively engaging corporations through shareholder advocacy.²⁷ Praxis Mutual Funds, rooted in Mennonite traditions and managed by Everence, takes what they call a “third way” approach, combining exclusionary screens with proactive engagement on issues like climate change and worker justice.²⁸
- Networks amplify individual efforts exponentially. The Interfaith Center on Corporate Responsibility brings together over 300 institutional investors representing more than $4 trillion in managed assets. Founded in 1971 to oppose apartheid in South Africa through shareholder activism, ICCR now coordinates engagement on climate change, human rights, and corporate governance.³⁰ Members file approximately 300 shareholder resolutions annually at major corporations. While specific membership costs weren’t publicly available, ICCR offers different membership levels for faith-based organizations, with services varying by tier.³⁰
- The most powerful catalyst remains peer testimony. Connect with Georgia congregations already investing for impact. Visit their investment committees. Review actual performance data. Learn from their governance structures and policy documents. Most importantly, understand how they navigated the same fiduciary concerns keeping your board awake at night.
- Begin with an amount that wouldn’t devastate your mission if it disappeared tomorrow. For most Georgia congregations, that falls between $10,000 and $100,000. The Faith Impact Project’s research shows the full journey to an optimized impact portfolio can take anywhere from six months to ten years, depending on the starting point and organizational complexity.³¹ Yet many institutions report that their initial hesitation proved unfounded once they made their first investment and saw actual results rather than projected fears.