Judaism teaches that people have a responsibility to help create a better world. The Talmud tells a story of a man who planted a carob tree that would not bear fruit for 70 years. When asked why he planted a tree whose fruits he would not live to enjoy, he replied that previous generations had planted trees for him, and that it was now his turn to plant trees for the generations to come.
Today, investors can apply Jewish values to create portfolios that, like the carob tree, will benefit others and lead to a better future. A new Morgan Stanley report on faith-based investing explores how Jewish values can guide impact investors. Here is a closer look at three of them.
1. Tzedakah: Charity
Tzedakah is related to the Hebrew word for justice, tzedek, which is another value highlighted in the Morgan Stanley report. The close linguistic connection between the two terms reflects the Jewish belief that the purpose of charity is to create a more just world.
Although tzedakah may at first seem more relevant to grantmaking, classical Jewish theology’s conception of the ideal form of charity is highly applicable to impact investing. As expressed by the Jewish philosopher Maimonides, this view of charity comprises eight levels of tzedakah, with the highest level being empowering the recipients to become self-sufficient. Examples of tzedakah in action include providing financing to entrepreneurs or to businesses to employ disadvantaged people, or funding training and job placement programs, as the Massachusetts Pathways to Economic Advancement impact bond did for Boston’s Jewish Vocational Service.
Some Jews have a practice of dedicating a set percentage, often 10%, of their income to tzedakah. Impact investors may embrace a similar idea by allocating a portion of their portfolios to impact investments. For example, the Max M. & Marjorie S. Fisher Foundation first devoted 1.8% of its portfolio to mission-aligned investments, then increased the target to 3.6% after its first forays into impact investing were successful.
2. Tikkun Olam: Repairing the World
Tikkun olam is the belief that the world is not perfect, but that people have the responsibility to improve it. Actualizing this value depends on tikva (or hope) in the ability for people to make a difference—a concept also highlighted in the Morgan Stanley report.
Investors who are committed to tikkun olam may focus on themes with the goal of repairing the natural world, including conserving natural resources, developing renewable energy, or mitigating climate change.
Repairing damaged relationships between communities and addressing conflict are other themes that fit well with tikkun olam. For example, impact investors like Sir Ronald Cohen have invested in enterprises that promote economic cooperation and mutual understanding between Israelis and Palestinians. Jewish impact investors may identify what they believe to be problematic actions by companies and use shareholder advocacy to help right the wrongs they perceive. For example, in partnership with JLens, the Jewish Community Foundation of San Diego joined with other shareholders to urge Teva to make disclosures about its oversight of opioid sales, which the pharmaceutical company agreed to.
3. G’milut Chasadim: Acts of Kindness
G’milut chasadim is the Jewish mandate to care for people who need help, such as providing medical care to those who are sick or offering food to hungry people.
One way impact investors can practice g’milut chasadim through their portfolios is supporting initiatives that promote food security, like the Max M. & Marjorie S. Fisher Foundation’s investments in the Michigan Good Food Fund.
Investors may also seek opportunities to increase healthcare access through funds like the Medical Credit Fund, which provides financing to health clinics and pharmacies in sub-Saharan Africa, or healthcare-focused impact bonds like the Utkrisht Bond in India.