Monday, January 3, 2011

Planning Your Tzedakah/Charity for the 2011 Tax Year

It's that time of year! The new tax year! Yay! (Spoken like a true tax law student!)

Jews are encouraged to plan their tzedakah  for the year during the 10 Days of Repentance between Rosh HaShanah and Yom Kippur. (Tzedakah is usually translated to English as "charity," but the two concepts have a completely different justification.) However, most people probably don't think about it until the new tax year is actually here. Especially after the 482 emails and 58 letters asking for your money before the last tax year ends!

I sincerely believe that regular giving is more important than the amount you give. One of the lessons that has been most influential in my life is that we should give every single day in order to get into the habit of giving, which will then turn into the actual emotional desire to give. I've found that to be true in my life, even from putting one coin a day in my tzedakah box. 

This is probably the only time you'll see anything about my personal finances, but I thought this was an interesting discussion of problems shared by many, especially those just beginning to give tzedakah in a planned way while being low-income.

As you should all know, I'm a grad student. I live by the grace of student loans. Law school has become famously expensive in the last 15-20 years. Even with approximately 40% of my tuition covered by scholarships, I'm going to graduate with about $150k in debt between grad school and undergrad. Add to that I'm about to move to the notoriously expensive NYC without a job lined up and be unemployed for several months anyway while I prepare for the NY and NJ Bar exams. That's more than a little frightening, as you might imagine! This also means I'm trying to save money from my jobs like a fiend.

I've been giving tzedakah haphazardly (aka, without any kind of plan) until now. Thanks to a clever suggestion from friend/commenter Leah Sarah, I've decided to make my own giving plan. Tzedakah has been more than a little confusing to me simply because my primary source of income is loans, though I always work more than one job at any given time (some paid, some not). This leaves a lot of doubt as to what I should consider as my "income." For example, my student loans are not considered income for tax purposes, so I'll pay income tax on the amounts I pay towards the principal of that loan in the future. That brings up questions for my future income since that really won't be my "income" since it'll already be earmarked, and it will not be an insignificant amount (aka over $1k/month). For some reason, the shiurim I've heard on tzedakah do not address these questions, though I've heard some people say tzedakah should not be paid out of loan funds, but then again, the needy are required to give tzedakah from the tzedakah they receive!

I came to a compromise to continue giving without putting me (or the future self bankrolling my current lifestyle) into the poorhouse. I'm going to give regularly to one organization each month, a different group each month. As many of you know, Jews like to give money in multiples of $18 because 18 represents the numerical value of the word chai, life. So I'm going to give some amount along those lines, while separately giving from windfalls I might receive during the year. Hopefully, this plan will have to undergo a major renovation in November, when I will, G-d willing, be a licensed attorney with a job! (Bar exams are held twice each year in February and July, and the July test results are released in November.)

I encourage each of you to renovate your own tzedakah plan or create one!


  1. converts like you are usually very brave and steadfast in your congrats on that, because, after paying for Hebrew school for the past 6 years, I'm beginning to feel sad that I can no longer afford tzedakah, as the schools have pushed beyond our 10% income, and a kosher life is much higher than our 90% remaining income. So good for you, that you're still holding your head up high on this matter!!

  2. The best of luck to you! I just heard a joke this week that orthodox birth control is known as dayschool tuition!

    Being serious, whenever I meet people who are trying to stretch their dollar, I always suggest the Simple Dollar (! It's the first blog I followed, and I've been following it for years now. Trent is very creative and practical, while focusing on not sacrificing your quality of life.

  3. My company allows direct payroll deposit into several different bank accounts. I have 10% of my (net) salary going into a separate bank account. That is my tzedakah fund. That way the money is separate from the beginning. Before I did this I would get to the end of the month and have to choose whether I would save some money, pay a bill, or give to tzedakah. Somehow the last would lose out much to regularly.

  4. Anonymous -

    If you have two pennies, you can afford tzedkah, because you have one penny to give. Maybe you can't give a lot, but you can give something, even if it's just clothes too small for your kids that you give to a charity, or herbs or vegetables you grow that you give to a soup kitchen.

  5. Its a tricky issue. Although the needy are required to pay tsedakah with the tsedakah they receive, they also are not required to pay that money back, or to add interest on top of that. The law also says "A debtor who has insufficient means to pay back his debts should not donate more than one third of a shekel (per year) to charity until he completed the repayment of his debts." However, most of us are living with (some) degree of comfort off student loans. I would definitely consult your rabbi, because the law is not clear, and the interpretation of the law will give very different answers in different communities.

    Personally, for me, I am not paying tzedakah while I'm in school, and I don't believe any of my orthodox friends are, because doing so would increase debt. I am, however, making a specific time allocation for charitable volunteer work, especially during school breaks.