Creating a Personal Chesed Fund

Based on Ahavas Chesed vol. 2 chapter 13

At this point, the Chofetz Chaim discusses the importance of establishing a household fund for the purpose of chesed. He suggests 100 or 200 silver rubles – everything based on what one’s budget can afford. (For context, a silver ruble in 1860 was worth about eighty US cents. In terms of purchasing power, that’s about $30 US in 2026. That would make 100 or 200 rubles around $3,000 to $6,000. I don’t know that the Chofetz Chaim would necessarily expect someone to earmark quite that much, but we see that he’s discussing a not insignificant amount.)

Why should one do this? As we previously discussed, the yetzer hara gives a person numerous excuses not to perform acts of chesed. And even if a person is favorably inclined, his family might impede him by casting doubt on those who could use their assistance. But if one has money designated for this purpose, he’s not quite so susceptible to this tactic of the yetzer hara.

One might question why he should give multiple small loans to a needy person rather than a single large loan to a successful businessman. After all, it’s also a mitzvah to lend to the prosperous! Putting aside the reality that, when it comes to loans, the needy take priority over the financially secure (Baba Metzia 71a), if you lend a whopping amount to a rich person as a business loan, you won’t have the resources left to help the truly needy when they ask for it.

Additionally, there’s an aspect of diversification in this. After all, lending $1,000 to the businessman is indeed a mitzvah, but lending $100 each to ten needy people is ten mitzvos right off the bat. And as those funds are repaid, he can then lend them to others – literally hundreds over the course of the year – greatly compounding his interest, spiritually speaking. It’s simply a much better use of his funds!

The Mishna in Avos (3:15) says that “the world is judged in goodness” (i.e., according to the percentage of good deeds). The Rambam points out that this doesn’t say the greatness of one’s deeds. It’s much more important that the majority of a person’s deeds be good than for him to perform one spectacular deed. Accordingly, if Joe gives a dollar to each of fifty needy recipients and Bob gives fifty dollars to one needy recipient, Bob’s action may have more “wow factor,” but Joe has brought many more mitzvos into the world.

We see from all this that it’s better to use one’s personal chesed funds to assist more people modestly than to assist one recipient spectacularly.

Another advantage to having a personal chesed fund is the ability of one’s family members to administer it in one’s absence. Whether one is on a business trip or simply taking a nap, he can continue to perform this important mitzvah vicariously through the members of his household. This also sets a good example for others, who will hopefully follow his lead, since this person will earn a stellar reputation.

At this point, the Chofetz Chaim discusses the importance of a good reputation; I’ll cite just one of his numerous sources. Mishlei 22:1 says, “A good name is better than riches.” And why might a person not have a good name? Quite possibly because he didn’t use his resources charitably! But as we all know, wealth won’t help a person when it comes time to “settle his account” with God!

Remember, anything we have been given over what’s necessary for our basic needs has merely been entrusted to us by God for the purpose of using it charitably. The Alshich on Shemos 22:24 likens the situation to a man who entrusts his son with managing his money on behalf of all of his children. Surely his intention isn’t that this one son should enjoy all his wealth and the other children go destitute! No, the son has been entrusted with carrying out his father's wishes. It’s the same with the money that God has given each of us.

Now, it’s entirely possible that one’s personal chesed fund may suffer the occasional loss. But don’t let this upset you! This is simply “the price of doing business,” as one would find in any commercial enterprise. (Anything that is free from the possibility of losses inevitably generates only moderate profits. It takes risk to get reward!) So don’t focus on the individual transactions; look at the big picture. Plan each year to reinvest in your chesed fund in order to make up any losses that one might incur from defaulted loans. One shouldn’t look at this as any different from spending money on tefillin or any other mitzvah.

Remember, a person’s income is determined each year on Rosh Hashana (Baba Basra 10a); this includes both profits and losses. With this in mind, consider the story of Rabbi Yochanan ben Zakkai’s sister. He had a dream that her family was going to lose 700 dinar during the course of the year, so he encouraged them to donate lots of money to tzedakah. This they did, donating a total of 683 dinar. Right before Yom Kippur, Roman soldiers came and confiscated seventeen dinar (making a total of 700 dinar). Rabbi Yochanan told his sister not to worry. The Romans weren’t going to take anything else, he said, because he foresaw in a dream that her annual loss would be 700 dinar total.

“Why didn’t you tell me?” she asked. “I would have donated the entire sum to tzedakah!”

“I wanted you to do it not to avoid a loss,” he said, “but in order to fulfill the mitzvah.”

None of us is perfect, and we all deserve to suffer a financial setback now and then. If we’re worthy, we’ll be able to suffer these losses through performing a mitzvah, such as by giving money to tzedakah, rather than through business losses or tax bills.

Losses are a part of life we all experience – which is a good thing, because they help to atone for our misdeeds. (It’s certainly preferable to any additional time in Gehinnom!) So, getting involved in tzedakah and chesed, which costs us money, will hopefully forestall the possibility of financial ruin or medical crisis. As the Midrash says (Shir HaShirim Rabbah 6:11), if a house isn’t open to the poor, it will eventually be open to doctors.

We see from all this that designating money for a personal chesed fund is simply a smart thing to do from many angles.

Get handy, colorful chesed "cheat sheets" in A Universe of Chesed!