The role of religion in social welfare provision, and more broadly in shaping the development of state social policy in the UK, has become an issue of increasing prominence in the last decade raising both new challenges and opportunities. This article brings together new and existing research in the field of religion and social action/welfare in the British context to present a preliminary discussion of how and why religion, as a source of social identity and moral values, matters for social policy. The key argument is that religious welfare provision goes beyond the mixed economy of welfare paradigm and has the capacity to challenge the Utilitarian underpinnings of mainstream social policy thinking by giving more relative importance to ethical issues such as self-knowledge and morality, in addition to the more conventional concepts of wellbeing or happiness. The article proposes the concept of ways of being in order to bring together these moral ideational factors that underpin social welfare.