How Generosity Creates Wealth

Studies conducted at Harvard Business School have identified a striking correlation between charitable giving and increased personal income. Economist Arthur Brooks describes generosity as creating a “virtuous cycle,” in which giving money away often precedes higher subsequent earnings.

The research proves that charity is not merely an expense; it is actually an investment in one’s own wealth.

Data from the Social Capital Community Benchmark Survey, conducted through Harvard’s Kennedy School, found that individuals who gave more than their peers were more likely to see income growth in the following year. In some analyses, giving just $100 more than a neighbor correlated with approximately $375 in additional income the next year.

Why Would Giving Increase Wealth?

Researchers point to several psychological and social mechanisms:

An Abundance Mindset
Giving shifts a person from scarcity thinking to abundance thinking. Instead of operating from fear of loss, generous individuals tend to recognize opportunity, take thoughtful risks, and pursue growth.

Social Capital
Generosity builds trust and reputation. People are more likely to partner with, promote, and recommend those they perceive as principled, generous and community-minded. Over time, these strengthened networks open doors to advancement.

Enhanced Problem-Solving
Charitable giving is, in essence, applied problem-solving. That orientation toward impact and solutions often carries over into business and professional life.

Financial Discipline
Regular giving frequently requires budgeting and intentional financial planning—habits that themselves contribute to long-term stability and growth.

Neuroscience offers additional insight. When a person gives, brain regions associated with reward, happiness and motivation become active. Giving does not only feel meaningful; it reinforces behaviors associated with persistence and success.

The Ultimate Factor in Wealth- Faith

Long before economists identified patterns linking generosity and prosperity, the Torah articulated the principle succinctly: “Asser ta’aser”—“You shall surely tithe” (Deuteronomy 14:22). From this verse, Jewish law derives the obligation to give at least ten percent of one’s income to tzedakah.

The Talmud notes the Torah’s unusual repetition—asser ta’aser—and offers a homiletical reading: “Aser bishvil she’titasher”—“Take a tithe so that you will become wealthy.” The Hebrew word for tithing (asser) shares the same root as wealth (osher), expressing a linguistic and spiritual connection between the two.

The Torah’s instruction to give ten percent of one’s income is not framed as loss, but as alignment with Divine blessing. G-d promises wealth for those who give their share of charity. Giving is not merely what we do after becoming wealthy; it is part of how we grow into wealth.

While there are many philosophical and social explanations for how giving leads to greater wealth, ultimately generosity—especially in uncertain economic times, or when one stretches beyond one’s comfort level—requires faith. It requires faith that the money we possess is entrusted to us by G-d to use responsibly and to share with those in need. And it requires trust that our giving will not diminish our resources, but instead that we will receive even more in return.

The $30,000 Leap of Faith

I remember from my childhood in New Haven one individual who truly embodied this principle: R’ Dovid Deitsch. Though he lived with remarkable modesty, his generosity was legendary, leaving a lasting impression on everyone who knew him.

During a 1957 public appeal for the building of Kfar Chabad village in Israel, the Rebbe, M.M. Schneerson, reviewed R’ Dovid’s pledge, which was already much more than he could afford, and gave him a startling instruction: "Give ten times as much".

The Rebbe quoted the Torah's teaching that one who gives generously to charity is blessed with wealth in return.

R’ Dovid didn’t hesitate. He immediately mortgaged both his home and his business to secure a $30,000 loan—a staggering sum at the time—and delivered the check the very next day.

The reward was almost instantaneous. Shortly after, R’ Dovid was offered a truckload of fabric from a factory fire for pennies. While others saw ruined goods, R’ Dovid discovered that only the outer layers were singed; the core was high-quality, expensive material.

The profit from that one deal was so great that he was able to repay his loan and attempt to give a $60,000 profit check to the Rebbe. The Rebbe told him to keep it, blessing him with even greater success. R’ Dovid went on to become an exceptionally wealthy philanthropist. Yet he remained as humble as ever, seeing his fortune not as personal gain but as entrusted responsibility.

Rethinking Wealth

In many cultures, wealth is treated with suspicion—as a source of ego or spiritual compromise. Asceticism is often equated with holiness.

Judaism presents a different model.

In Parshat Terumah, the Jewish people are commanded to contribute money and materials for the building of the Mishkan:

“Speak to the children of Israel and have them take for Me an offering… gold, silver, and copper… And they shall make Me a sanctuary, and I will dwell in their midst.”

Every individual was encouraged to participate. Strikingly, the list begins with gold.

Why begin with the most precious material? Would it not have made more sense to begin with something more accessible?

The Torah teaches that generosity should emerge not from limitation, but from expansiveness. When a person stretches beyond comfort for a sacred purpose, capacity often follows commitment.

The verse does not say “give,” but rather, “take for Me an offering.” Kli Yakar (Rabbi Shlomo Ephraim of Luntschitz 1550-1619) explains that the Torah deliberately uses the language of “taking” (וְיִקְחוּ־לִי) instead of “giving” to teach that one who donates is, in truth, receiving more than he gives. The Midrash explains: “More than the rich person does for the poor person, the poor person does for the rich person.” In giving, the giver becomes the primary beneficiary.

Maimonides teaches that anything done for the sake of Heaven should be done with beauty and excellence. “If one builds a house of prayer, it should surpass his own home in splendor. If one feeds the hungry, he should offer the finest food from his table.” Material abundance, properly channeled, elevates spiritual life.

The Talmud goes further, explaining that true wealth and poverty exist primarily in the realm of consciousness—da’at. Wealth is not merely a figure in a bank account; it’s a mindset. It is an awareness that whatever resources we possess are tools for mission.

For centuries, Jewish communities endured crushing poverty imposed by restriction and discrimination. Today, many live with a level of prosperity unprecedented in our history.

That prosperity is both a blessing and a test.

Will wealth inflate ego—or expand generosity? Will it distract—or empower?

A Generation of Abundance

In a landmark address in 1992, the Rebbe declared that our generation—the last generation of exile and the first of Redemption—is worthy of abundant material blessing. Wealth, he explained, enables greater charity, deeper Torah study, broader acts of kindness, and more complete fulfillment of mitzvot. The Rebbe’s message was not merely that wealth is permissible. It was that wealth is purposeful.

Material abundance, properly channeled, becomes a foretaste of Redemption itself. As Maimonides describes the Messianic era:

“In that era, there will be neither famine nor war, neither envy nor competition, for good will flow in abundance, and all delights will be as freely available as dust.” 

Let us begin to live with this mindset by increasing our giving and performing random acts of goodness and kindness. Together, we will merit the coming of Moshiach today!