This Too Is for the Good1 Giving and Investing in Alignment with Jewish Values A collaboration between Investing with Impact and Philanthropy Management “ Charity outweighs all other commandments.” — Talmud, Bava Batra 2 MORGAN STANLEY | 2019 THIS TOO IS FOR THE GOOD Perhaps the central questions for all people TABLE OF CONTENTS of faith are: How do we live in the world as Five Mitzvoth � � � � � � � � � � � � � � � � � � � � � � � � 4 good and moral people? What are the values Initiating a Meaningful Conversation � � � 7 that have been imparted to us through the A Brief History of Jewish Philanthropy � � 8 The Mission-Aligned Jewish Investor � � 10 teachings of our religion, and how do we A Hypothetical Case in Point � � � � � � � � � �11 pass those values down to our children and Approaches to Mission-Aligned Investing � � � � � � � � � � � � 12 grandchildren? How should those values Jewish Values-Aligned Financial and Philanthropic Capital Approaches � � � � � 13 inform the way we interact with our families, Approaches to Mission-Aligned our communities and the world around us? Philanthropy � � � � � � � � � � � � � � � � � � � � � � � � 16 Advancing Mission Through And, how might those values guide our family Shareholder Action and Engagement � � 16 Jewish Values in Action, and foundation investing and giving decisions? Now and in the Future � � � � � � � � � � � � � � � 17 Those raised in the Jewish faith, or observing it by choice, may first ask a more fundamental question: Is there a set of common values that spans the extraordinary diversity of the Jewish people and, if so, what are they? MORGAN STANLEY | 2019 3 THIS TOO IS FOR THE GOOD Two Jews, Three Opinions To paraphrase the Midrash Tanchuma, of Jewish religious identity — Haredi Other Christian denominations, such an ancient, three-volume commentary, (ultra-Orthodox), Dati (religious), Masorti as Baptist, and leaders of Muslim “All Jews are brothers and sisters.” But as (traditional) and Hiloni (secular).2 sects have released their own sets of we well know, brothers, sisters, mothers Some religions have governing bodies guidelines based on their interpretations and fathers sometimes disagree. Judaism that periodically issue faith-based of Sharia4 and faith-based responsible is a religion of laws, scholarly inquiry and investing and philanthropic guidelines. investing.5 While many rabbis and robust debate over how the teachings For example, the principles for the United Jewish scholars have opined on of the ancestors are to be interpreted in States Conference of Catholic Bishops the subject, Judaism has no direct the modern world. These interpretations Investment Guidelines, established equivalent that we can identify. may vary across Orthodox, Conservative, in 2003,3 provide a set of guidelines Of course, that does not mean Reform and Reconstructionist for Catholic values-oriented investors, that Jews who wish to practice faith- followers, and there are even likely to be including dioceses, religious schools, based philanthropy and investing are disagreements among different members of hospitals, families and individuals. without guidance. While discussions the same synagogue. In fact, according to The guidelines include specific of Jewish values may proceed down a 2016 Pew Research Center survey, about exclusionary screens and targeted, different paths, they all start at the 4 in 10 Israeli Jews do not identify with positive environmental and social impact same wellhead: the Torah. So, it is safe any of these streams or denominations of recommendations, but leave room for to suggest that a discussion of Jewish Judaism. Israeli Jews are more typically the interpretations and preferences of values in giving and investing should grouped into four informal categories specific organizations and individuals. begin with the word of God. 5 Mitzvoth TZEDAKAH Literally translated as “righteousness,” Tzedakah speaks Looking to the Torah for guidance, to the imperative to give to charity. any number of commandments TIKKUN OLAM and parables might add to the Defined as “repair the world,” Tikkun Olam evokes discussion of giving and investing the duty to serve those in need. according to Jewish values. While TZEDEK many volumes could be written Having the same root as Tzedakah, Tzedek emphasizes the call to justice and fairness. on the subject, the following five mitzvoth, the Hebrew word G’MILUT CHASADIM for “good or praiseworthy deeds,” Translated as “loving kindness,” G’milut Chasadim calls for caring and compassion. serve as a useful basis for the conversation:6 TIKVA Translated as “hope,” Tikva reminds us to remain optimistic for the future. TZEDAKAH LEVEL 4 : The recipient knows the donor, but the donor does not “ The greatest good you know the recipient. LEVEL 3: The donor knows the can do for another is recipient, but the recipient does not not just share your know the donor. LEVEL 2 : Neither the donor nor the riches, but to reveal recipient knows the other. LEVEL 1 : The donor gives the to him his own.” recipient the wherewithal to become self-supporting. — Benjamin Disraeli Note that the seven lower levels of charity Any discussion of Jewish philanthropy refer exclusively to giving, while the might properly begin with the mitzvah highest level aligns giving with investing, of Tzedakah, which speaks to the particularly concerning investments that responsibility of all Jews to give to charity. seek to generate more scalable financial, The biblical origin of Tzedakah is quite social and environmental returns. For specific: It states the obligation to donate example, which might we consider to be the 10% of one’s crops to members of the higher level of charity: an anonymous gift community in need. Many Jews still to a hunger relief program, or a low-interest follow these precepts, donating 10% of loan that enables a village to build an their earnings to good works, as do many irrigation system, which then gets repaid by Christians who tithe a portion of their the community and loaned out to the next earnings and Muslims who follow the village and the next in a virtuous cycle? practice of Zakat. Most of the world’s other major religions also have prescribed practices for the giving of alms. TIKKUN OLAM Importantly, Tzedakah not only refers to the act of giving, but also the intention “ When we are no of the gift and the manner in which it is longer able to change given. While no act of charity is considered bad, Tzedakah commands that gifts be a situation, we given willingly, proactively and, preferably, anonymously. The great philosopher and are challenged to rabbi Maimonides codified this hierarchy change ourselves.” into eight distinctive levels of righteous charity. In descending order, these are: — Viktor Frankl LEVEL 8 : The donor is pained by the act of giving. Introduced in the Lurianic Kabbalah LEVEL 7: The donor gives less than account of creation, Tikkun Olam is he should but does so cheerfully. generally translated as either repairing LEVEL 6 : The donor gives after or healing the world. The original being solicited. text referred to the separation of the LEVEL 5 : The donor gives without spiritual from the physical world, and being solicited. the “healing” was a sort of return to the MORGAN STANLEY | 2019 5 THIS TOO IS FOR THE GOOD spiritual realm. By the 1950s, the term and just court systems around the world, gentiles alike. The hundreds of Jewish was being adopted in Jewish circles as protecting the rights of the underprivileged. medical centers around the country a call to social action, and was likely an Tzedek not only calls upon Jews to might be seen as a tangible monument inspiration to many American Jews who oppose injustice, but to be conscientious of this compassion. participated in the Civil Rights Movement of their own biases and to be fair in Our consideration of G’milut Chasadim of the early 1960s. More recently, Jewish their own dealings. From the investment might also inform decision-making around environmental advocates have embraced perspective, this may suggest a how to commit intellectual capital, as well a more literal version of “repairing the commitment to understanding the as financial capital, to the organizations world,” believing that Tikkun Olam governance policies and social impact of we support. How might your empathies suggests a responsibility to mitigate the the companies we may support with our instruct how and where you commit your worst effects of a warming planet.7 Such investment capital, and to evaluate the time to effect the change we would like notions might guide investment policy composition of boards and staff seeking to see in the world? as well as grant-making policy for Jewish diversity by race, age and gender. philanthropists, perhaps by employing TIKVA social or environmental criteria in the G’MILUT CHASADIM construction of investment portfolios “ Judaism’s profound to avoid the most serious emitters of “ Whoever gives the carbon — a known cause of weather conviction is that many changes and climate-related disasters, poor money is blessed 8 of the tragic elements of including rising sea levels — and by sixfold; whoever does investing in climate solutions, including the everyday world are resilient infrastructure, energy-efficient it with a kind word is building and technology, sustainable not immutable, that little agriculture and more. blessed sevenfold.” by little the world can — Talmud, Bava Batra TZEDEK and must be improved.” If Tzedakah dictates that the “ Care of the poor is — David Arnow9 intentionality