Would using funds to invest in a start up business of someone who is struggling financially qualify for Ma’aser Kesafim?
Would it make a difference if we have it set up so that any eventual profit sharing would go back into the organization to be used for addition chesed projects?
Answer:
Using money to help start up a struggling business (or a business for somebody struggling) is certainly a valid use for maaser kesafim. As the Rambam writes, the highest form of tzedakah is giving the poor individual a parnassah — such as by starting up a business for him.
However, maaser kesafim must be given as a donation, and therefore a clause must be made that the money is not refundable, but is given as an outright gift, or, as the question suggests, that it (and profits thereof) should go to some other charity after returns are given.
Best wishes.
So I am confirming, that if my organization gives a grant to a start up business, the owner can in turn give a share of profits, or in fact his Ma’aser K’safim back to my organization to be used for other ma’aserable chesed projects, such as mentioned in my previous email and or to be used as a grant to a different start-up business.
Do I understand this correctly?
Could an honorarium be paid to these advisory panel members for their time? Can these honorarium and other operating expense of the organization be paid from funds raised ‘out of ma’aser money’? Or would the ‘operating expenses need to be covered from other funds?
Your understanding is correct.
Maaser money can be used for setting up the business, because this is helping somebody needy to stand on his own feet. Once he stands on his own feet, no more maaser money can be given, but while he requires it, maaser money can be used.
Hope this is clear, and best wishes.
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