We all know the old adage, give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. The basic principle at the heart of this saying is that every man who is reliant on charity is at the mercy of the charitable giver, whereas a better way to help people find freedom is to give them the tools they need to put food on the table, to bring forth bread from the earth by themselves, for themselves. That is a fundamental fact of living in dignity.
Parashat Vayigash details the way Joseph employs financial and philanthropic instruments to strip the people of Egypt of their freedom. One question that comes up in this context is why does the parasha even bother to tell us of the way Joseph handled the Egyptians. One interpretation is that it is for the sake of negating Egyptian law with the later socioeconomic laws of the Torah.* What’s interesting here for us is the fact that what’s good for the goose is good for the gander; the laws that the Torah applies to freedom are the same laws we apply to impact investing, and in that sense Joseph’s rulings negate the principles of impact investing just as well.
Using philanthropy to enslave people
As you would recall, during the years of plenty, Joseph wisely stores food in Egypt’s great vaults. When the years of famine hit, he sells the food to the Egyptian people, but their money soon runs out:
Now the money was depleted from the land of Egypt and from the land of Canaan, and all the Egyptians came to Joseph, saying, “Give us food; why should we die in your presence, since the money has been used up?”
Just last week we were complementing Joseph for his brilliant strategic move to make Egypt into a regional power. Given this, we’d expect to see a strong business sector and a rich population. But instead, Joseph has created a monopoly market – and if there’s one thing the State knows how to do well it’s being a monopoly – while everyone in Egypt is starving, the sovereign is the only one who has access to bread.
In the second year of the famine, after they’ve sold all their property, the Egyptians beg Joseph to buy up their lands and bodies in exchange for seed, so they can sow the land. Joseph agrees, then continues to nationalize all private property, uproot the people of Egypt from their homes and establish a 20% tax rate:
That year ended, and they came to him in the second year, and they said to him, “We will not hide from my lord, for insofar as the money and the property in animals have been forfeited to my lord, nothing remains before my lord, except our bodies and our farmland. Why should we die before your eyes, both we and our farmland? Buy us and our farmland for food, so that we and our farmland will be slaves to Pharaoh, and give [us] seed, so that we live and not die, and the soil will not lie fallow.” […] And he transferred the populace to the cities, from [one] end of the boundary of Egypt to its [other] end […] And it shall be concerning the crops, that you shall give a fifth to Pharaoh, and the [remaining] four parts shall be yours: for seed for [your] field[s], for your food, for those in your houses, and for your young children to eat.”
At first, Joseph comes across as a charitable donor, someone who feeds the hungry in their hour of need. But when you really get into it you see that the parasha begs the question: Why did Joseph sell them bread in the first year, and the seed only in the second year? The reason for that has to do with the difference between fish and rods. The fish, much like bread, is consumed on the spot. It can sustain a person in the short term, but does not give them the chance to achieve long-term independence. The rod, much like the seed, enables a person to be independent and stand on their own two feet in the long run. Rather than encourage the people of Egypt to be independent and support themselves, Joseph desecrates the sacred institute of philanthropy by using it to enslave them.
How impact replaced the socialist state
As the socialist state grew weaker, basic human rights have lost their grip on the law. In such a situation where the state fails to fulfill its duty to its citizens, as we see in Joseph’s Egypt, the tendency to promote those rights grows stronger within the civil society. It is then that we see social enterprises spring up like mushrooms after the rain.
At its core, the philanthropic institute is a sacred one for it is founded on the love of Man and the pure desire to feed hungry souls. While the socialist state is founded on the state’s duty to give and the citizens’ right to receive, philanthropy is founded on grace, and there lies its weakness. Privilege rather than grace, or justice rather than charity, if you will. For that, we must keep philanthropy to the bare minimum, and save it only for those challenges that cannot be resolved any other way. And since the need for philanthropy continues to grow, doing so is doubly important.
One of the ways to solve social issues through privilege rather than charity is by employing a business model. A business model will always be preferable to a philanthropical model, because it does not create hierarchy between the giver and the receiver, and one is not dependent on the other. Investing in business models whose flagship is solving a social issue is at the heart of impact investing.
As an example, I’ll refer to my own investments in Takwin Labs and 12 Angels. Takwin Labs is a venture capital firm and accelerator for Arab-Israeli entrepreneurs, founded by Imad Telhami and proudly led by Itzik Frid. 12 Angels, founded by Avremi Vingot and Moshe Friedman, invests in Haredi entrepreneurs. In both cases, I didn’t invest out of grace, but out of a pure financial interest. In both I see tremendous business potential that makes a stronger and stronger case for itself as the years go by. I have no doubt that both Takwin and 12 Angels will produce the next big unicorn, which will certainly benefit the Arab and Haredi population, as much as its investors.
Alongside Takwin and 12 Angels are countless important Israeli initiatives that sanctify the principle of rods and nott fish. Ampersand, for example (also founded by Moshe and Avremi), helps integrate Haredis into the hi-tech industry, which could prove crucial to the next stage in the development of the Startup Nation. The Non for Profit organization Yozmot Atid, led by Batsheva Moshe and CEO Tsofit Gordon, is one of the more inspiring initiatives I’ve had the privilege to be a co-founder of. The organization is a spin-off of Latet, Israel’s largest NGO combating poverty and food insecurity, whereas Yozmot Atid tackles the problem from its root by empowering women and giving them tools to assist them in starting their own business. Much like these, Jika is another startup I invested in, founded by Nadav Avrahami and Shabtai Dvir, which can potentially be one of the more successful startups to come out of Israel. Jika has developed a platform that gives investors – regardless of their level of knowledge or experience – practical tools to make it in the stock market.
The story of Egypt’s enslavement teaches us of the importance of giving rods rather than fish. From the perspective of my 10 years as an impact investor, I feel it is a great privilege to take part (alongside many other fine impact investors whose numbers are growing strong) in shaping the socioeconomic space by making investments that help close social gaps, strengthen the weaker strata, and promote the freedom of the citizens of Israel. Let it be that impact investing becomes the beating heart of Israel’s business activity.
*For a comparison between Egyptian law in Joseph’s time with the socioeconomic laws of the Torah refer to Beni Porat’s article titled “The Economic Characteristics of Egypt During the Years of Famine” (available in Hebrew).