What’s Jewish about Impact Investing?
By Avi Deutsch
Contrary to popular belief, eating is not inherently Jewish. In fact, nearly every Western religion employs this basic human need in the service of religious practice. It is not the eating that is Jewish, it is how we eat that makes it meaningful.
The same is true of investing – it is definitely not inherently Jewish, but that doesn’t mean we can’t make it a meaningful Jewish experience.
The idea that investing can be a meaningful experience has grown in popularity in recent years. More and more individuals and institutions see their capital as way of furthering their values. If in the past we only expected financial returns on our investments, today impact investors also seek measurable social or environmental returns. Not instead of, but at the same time. However, impact investing is an agnostic tool; it doesn’t tell your values ought to be. That is where Judaism comes in.
The vastness of the Jewish corpus makes it possible to claim many behaviors and practices as Jewish. However, this type of cherry-picking adds little value. The question is not what makes something Jewish, but rather how do we draw on thematic Jewish principles and values to enrich our lives and infuse meaning into a variety of practices. Here’s how we can apply some of our most significant values to investing.
To Love God with all your Money
Unlike other religions, Judaism does not seek to separate the spiritual from the physical. Abstinence is not a quintessential Jewish value, and Jewish leaders build families and live within the community. Instead, Judaism seeks to bring all aspects of life under the umbrella of holiness, even the physical and the mundane.
One of the clearest and least-known iterations of this unity comes from the most famous Jewish prayer, the Shema. Many Jews know to recite V’ahav’ta eit Adonai Elohekha b’khol l’vav’kha uv’khol naf’sh’kha uv’khol m’odekha, but few know the meaning of uv’khol m’odekha, often translated as ‘to love God with all your might/very-ness.’ The Talmud interprets me’od as money or possessions. Our earthly possessions are not exempt from our responsibility towards something greater than ourselves.
The notion of loving God with all our possessions poses multiple questions. What does it mean to love God with your money? What are the implications on personal property and wealth distribution?
Stewardship vs. Dominion
The origins of the Jewish notion of property and wealth can be found in the two different stories of creation found in the book of Genesis. In the story that unfolds in Genesis 1, man is made in the ‘Image of God,’ and is commanded to ‘subdue’ the earth, and have ‘dominion’ over all other living creatures. This would seem to imply that the earth and all that in it are ours to do with as we please.
In the second story depicted in Genesis 2, man is made ‘from dust,’ to which he shall return, and he is commanded to ‘guard’ the Garden of Eden. This story evokes a notion of stewardship: the earth is not ours, we are merely charged with safeguarding and improving it. While the term stewardship is commonly used today in reference to environmentalism, the notion has much broader implications on questions of wealth distribution, income inequality, and fiduciary responsibility.
These conflicting accounts are not reconciled in the scripture, leaving us with a deep tension that is more relevant today than ever. Later essential commentary (ha’Tora sh’bealpeh) tended to reconcile the two by associating ‘dominion’ with just ruling for the benefit of one’s subjects, and thus in the ‘Image of God’ (see Bereishit Rabbah 8:12).
If we accept the concept of stewardship, we must at a minimum strive to do no harm to our planet and society. To love God with all our money thus becomes an obligation to safeguard his creation. In practical terms, we could employ investment strategies that screen companies based on social and environmental performance. But is not harming enough?
A Commitment to Repairing our Planet
While stewardship requires that we don’t harm the planet, other Jewish values may require that we do more than that, that we actively work to repair it.
The obligation to improve the world we live in runs deep in the Jewish tradition. Modern Jewish movements often cite Tikkun Olam (repairing the world) as a core Jewish value, though in reality this term appears for the first time only in the Mishnah, which was compiled after the destruction of the second temple, and is used to justify only a handful of rabbinical decrees. The modern interpretation of Tikkun Olam draws heavily on Kabbalistic teachings. Other related values such as Gemilut Chasadim (acts of kindness) and Tzedakah (justice or charity) are deeply grounded in mainstream Orthodox Judaism, but historically their focus has been on helping the Jewish community.
A contemporary account of this moral imperative to repair our plant can be found in the teachings of Rabbi Irving (Yitz) Greenberg. According to Rabbi Greenberg, the ideal of a perfect and just world lays at the heart of Judaism. However, due to the forces of inertia, this perfection cannot be achieved overnight. Instead, it is a step by step process made possible through a covenant between God and Jewish people. In return for God’s protection and assistance, each Jewish generation must do its best to move the world towards this ideal. The process thus becomes an ongoing, gradual task, regulated and administered by the Halacha (Jewish law). Dietary laws, to return to our earlier example, are intended to minimize the suffering of animals, and make us more conscious of the food we are putting in our mouth.
A similar approach should therefore guide our investment decisions. To love God with our money implies not only that we do no harm, but that we use our money as a tool in the pursuit of making the planet better.
An Active Approach
What then does Jewish law have to say about the use of capital for improving our world? As it turns out, very little. This is hardly surprising; the financial tools and legal frameworks used today are a recent phenomenon. Jewish law does however address the most ancient financial tool – lending.
Jewish law explicitly forbids predatory lending. However, it goes one step further and explicitly commands that we use our capital to help those in need. In Deuteronomy 15, we are commanded to not ‘harden thy heart’ and to lend money to the poor, to the unbankable and to the un-credit-worthy. Not to give, but to lend.
This obligation serves as the basis for Maimonides’s famous assertion that the highest form of charity is to provide a poor person with a job, enter into a partnership with him, loan him money, or as a last resort, give him a gift. The goal is to help the poor in the most respectful manner and to ‘strengthen his hand until he does not any longer need to ask others for help’ (Mishneh Torah, Gifts to the Poor 10:7). One can’t help but think of the slogan of the Acumen Fund, one of the pioneers of the impact investing industry: ‘A bold new way of tackling poverty that’s about dignity, not dependence, and choice, not charity.’
Don’t Fight Them, Embrace Them
In the final decades of the 19th century, Orthodox Judaism was confronted with a mass defection of young Jews attracted by the budding ideological movements, including Zionism. The mainstream Orthodox institutions viewed these individuals as lost souls, and blamed their desertion on poor education and the temptations of modern society. However, one Rabbi stood apart in his view of these secular ideologists – Rabbi Abraham Isaac Kook.
Rabbi Kook, who later served as first Ashkenazi chief rabbi of British Mandatory Palestine, believed that the problem was not in the defectors, but in the shortcomings of modern Judaism. A mass defection towards ideological alternatives revealed a lack of moral leadership within modern Judaism. The atrophied religious institutions were unable to provide their young constituents with relevant forms of Jewish practice. Within the competing ideologies he saw sparks of Divinity which were the key to restoring Judaism and reengaging the young idealists.
The need for fresh moral leadership and Jewish practices that resonates with a contemporary audience remains acute today. Impact investing offer us a unique opportunity to inspire and engage. Let us embrace the growing interest among young Jews in using business as a tool for good, and infuse it with meaning by starting a dialogue that draws on Jewish sources, debates Jewish values, and connects us with the State of Israel.
Avi Deutsch is Co-founder and CEO at LAVAN.