We have the right as individuals to give away as much of our own money as we please in charity; but as members of Congress, we have no right to appropriate a dollar of the public money. – Davy Crockett
“I’d really like to give more to charity.”
I’ve heard that sentence hundreds of times over the years. Usually, it comes near the end of a financial planning meeting. After we’ve spent an hour discussing retirement projections, investment allocations, tax strategies, insurance coverage, estate planning, and playing Jewish geography.
Every dollar has been carefully accounted for. Then, after I ask if philanthropy or giving will play a role in their legacy planning, almost as an afterthought, I get the response, “We really should be giving more.” I’ll ask how much they currently give, and often, there is an awkward silence. Then they’ll say that we’d love to give but nothing is left at the end of the month.
The intention is there. But there is no line item in the budget. Giving is expected to happen if there’s money left over at the end of the month. The problem is that there almost never is.
There is always another home repair, another family celebration, another vacation, another tuition payment, another unexpected expense. If charity depends on what’s left over, it often becomes whatever is left over – which isn’t much.
In this week’s Torah portion, we read Parshat Re’eh: “If there is among you a needy person... do not harden your heart and do not close your hand against your needy brother. Rather, you shall surely open your hand to him” (Devarim 15:7-8).
A few verses later comes an equally powerful statement: “For the poor will never cease from the land; therefore I command you, saying: You shall surely open your hand to your brother, to your poor and to your needy in your land” (Devarim 15:11).
Why does the Torah tell us that poverty will never disappear?
The question arises: if the Torah envisions a society built on justice and compassion, why does it tell us that poverty will never disappear?
Rabbi Jonathan Sacks, zt”l, explains that the Torah is teaching something profound about the human condition. While we strive to reduce poverty, there will always be people facing hardship.
The mitzvah of tzedakah (giving to charity) is therefore not an emergency response to unusual circumstances; it is a permanent feature of Jewish life. A compassionate society is not one in which need never exists, but one in which no one ignores that need.
As Rabbi Sacks writes, “Poverty may never be eliminated, but the existence of poverty must never become an excuse for indifference.”
That idea should reshape how we think about financial planning. Many people assume that charitable giving begins after they’ve achieved financial security. First, save for retirement. Then build an emergency fund. Then pay off the mortgage and invest. Then, if everything works out, start giving more.
The Torah turns that sequence upside down. Giving is not what comes after financial planning. Giving is part of financial planning.
One of my favorite insights from Rav Aharon Lichtenstein zt”l is that Judaism measures not only what we accomplish, but who we become in the process. Discussing mitzvot such as tzedakah, he explains that the Torah seeks to cultivate a personality of responsibility and generosity. The mitzvah is not merely a mechanism for transferring wealth from one person to another. It shapes the moral character of the giver.
A budget is a reflection of values and responsibility
We often think budgeting is about numbers. The Torah suggests budgeting is also about character. Every budget reflects our priorities. You don’t need to ask someone what they value most. Just look at where their money goes. As election season nears, you hear that refrain all the time. The government’s budget reflects its priorities. It’s no different for individuals.
Richard Thaler, Nobel Prize winner in Economics, introduced the concept of “mental accounting.” People naturally assign different purposes to different pools of money.
When savings are automated and assigned a purpose, people are dramatically more likely to stick with their goals. The same principle explains the success of automatic retirement plans and payroll deductions.
Why shouldn’t we use the same strategy for giving? Instead of hoping generosity will happen, schedule it. Automate giving. Treat it exactly the way you treat your mortgage payment, water bill, or your retirement contribution.
I’ve noticed something interesting over the years. The clients who budget for charity rarely complain that they “can’t afford” to give. The clients who don’t budget for it almost always feel they should be giving more. The difference isn’t necessarily income. It’s intentionality.
Clients who establish a charitable giving line in their budget frequently become better overall financial managers. When every shekel or dollar has a designated purpose, impulse spending naturally declines. Before making an unnecessary purchase, they instinctively compare it to the goals they’ve already committed to.
As financial advisors, we spend a great deal of time helping clients prepare for the future. We discuss investment returns, inflation, taxes, healthcare costs, and retirement income. But perhaps one of the most important questions belongs much earlier in the planning process. “What values should this financial plan express?”
The next time you sit down to prepare your household budget, don’t just ask whether you’re saving enough for retirement. Ask whether your budget reflects your values. If tzedakah truly occupies an important place in our Jewish lives, it shouldn’t be treated as an afterthought. It deserves its own line item. And that may be the most meaningful investment you’ll ever make.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI.
For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.