Morgan Stanley
  • Wealth Management
  • Mar 4, 2024

Aligning Jewish Values with Philanthropy and Investing

Those seeking to align all of their pools of capital with their faith traditions, including Jewish values, can potentially have a greater positive impact on global challenges.

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Many people look to their faith for guidance when navigating global challenges and seeking ways to make a positive impact. For example, a key concept in Judaism, Tikkun Olam, translates from Hebrew to “repair the world.” While followers of Judaism may interpret the idea differently, for many, Tikkun Olam evokes the duty to serve those in need – from alleviating poverty to protecting the environment for future generations. One approach to Tikkun Olam is to use your capital to advance causes aligned with both your financial and faith-based goals. Working in partnership with your Financial Advisor, your capital can be deployed both through charitable giving and through investing – following an approach known as sustainable and impact investing.

Jewish values will translate into different objectives for each individual, family or organization. To facilitate this flexibility, the Investing with Impact team developed a spectrum of investment approaches to activate financial strategies that align with the individual objectives of each investor. Before we dive into investing, we will take a look at Jewish values-aligned philanthropy.

A Tradition of Philanthropy

As with many faiths, embedded in Jewish custom and law is the tradition of philanthropy, from the practice of pushke—a small, blue and white tin box used to collect coins for charity—to the robust giving by Jewish individuals, federations, foundations and nonprofits across the world today. Giving can take many forms and financing methods, such as grant and donations, loan guarantees, lines of credit and equity investments to achieve each individual’s or institution’s philanthropic mission. Morgan Stanley’s Philanthropy Management team supports clients by offering a suite of services to help define and realize their charitable missions.

A donor advised fund account is another way to align philanthropy with your religious values. In 2021, Morgan Stanley announced a partnership between Morgan Stanley Global Impact Fund Trust (Morgan Stanley GIFT), our donor advised fund, and the Jewish Future Pledge. Together, we’re working to educate both clients and advisors about opportunities to ensure that their values are reflected in financial, estate, and charitable planning. Speak with a Morgan Stanley Financial Advisor to start a conversation about aligning your religious values with your philanthropic and investment capital.  

Applying a Jewish Values Lens to Investing

While faith-based philanthropy may seem more familiar given its prevalence in Judaism and other faith traditions, faith-based investing can require more explanation.

The first step is to identify which values are most important to you and to articulate them to your financial advisor. The Torah offers guidance on aligning capital with Jewish values through a number of commandments and mitzvot, the Hebrew word for good deeds. Below are four ways investors can bring their faith to investing: 

  • Climate Change: Tikkun Olam, or repairing the world, could be interpreted as a call to address one of the most pressing global challenges of today: climate change. This can be achieved by excluding companies that are among the worst environmental performers, or by proactively investing in innovative companies that are developing products and services to accelerate the transition to a low carbon economy.
  • Social Justice: Another Jewish mitzvah, Tzedek, is a call for justice. It can evoke an obligation to fight for justice for the poor by investing in companies working toward the eradication of poverty, for gender and multicultural equality, or for a fair court system around the world.
  • Local or Global Issues: Some investors may want to align their portfolio to their world view by focusing on specific groups or geographies to generate impact. Individuals and institutions can invest in exchange-traded funds (ETFs) that track the Indexes from specific geographic markets. Qualified investors can choose private equity investments that are making an impact in specific communities locally or globally.
  • Influence: The mitzvah of Tzedakah dictates the responsibility of Jews to give to charity, but also emphasizes the intentionality of giving as equally important to the amount. This could mean allocating some of your capital to asset managers who actively engage with their portfolio companies to improve, or influence, corporate practices and ensure that your money goes a long way to create impact. 

Integrating Jewish Values into Your Portfolio

The next step is to work with your Financial Advisor to integrate your values into your portfolio. Your Financial Advisor can help construct a portfolio that leverages Morgan Stanley’s Investing with Impact platform. When evaluating investment strategies for the Investing with Impact Platform, we seek intentionality in the investment process, influence through shareholder engagement and inclusion through diverse perspectives. We refer to this as the “Three I’s of Impact.”

There are several approaches to intentionality that investors can take to align Jewish values to investing. One is to apply restriction screening. For example, a family reflecting on Tikkun Olam might interpret this to mean excluding companies with poor environmental or human rights records. Another approach is environmental, social and governance (ESG) integration. ESG integration tends to generate broad-based positive impact versus creating targeted impact in a defined or thematic issue area. The final approach to intentionality is thematic solutions investing, or the intentional allocation of capital to sectors or geographies addressing specific impact objectives. Investments can be made across asset classes and align with a wide range of themes — such as climate solutions, including water and energy solutions, diversity and inclusion, community economic development and more.

In additional to intentionality in the investment process, we developed a framework to evaluate influence and inclusion. In an investment context, we define influence as engaging with companies’ management, voting proxies and filing shareholder resolutions based on broad environmental, social and governance practices and/or defined Jewish values. Inclusion is defined as investing in strategies managed by firms that are diverse owned* and/or have diverse representation across investment professionals. Many values-aligned investors, in partnership with their Financial Advisors, are deliberately investing capital with diverse-owned firms to support the advancement of representation in the field of asset management.

The final step is measuring your progress. In order to measure alignment to impact goals over-time, including faith-driven goals, Morgan Stanley offers an award-winning and patented impact reporting application – Morgan Stanley Impact Quotient® (Morgan Stanley IQ®). With this application, Financial Advisors can work with their clients to identify their unique Jewish values-aligned impact goals and report on the portfolio’s alignment to these goals. If misalignment is identified, your financial advisor can use Morgan Stanley IQ® to adjust portfolio holdings to help improve alignment.

What’s Next?

The journey of aligning your investment and philanthropic capital with your values can be a deeply satisfying one, and it can start with a conversation with your Financial Advisor on what Jewish values mean to you. 

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