**Special High Holidays Announcement**
Join Rabbi Eli Mansour and Cong. Bet Yaakob in Brooklyn for High Holiday Services. This year, we will be housed in a large Luxury Tent on Ocean Parkway between Ave. S & T, giving us the ability to accommodate a large crowd. For detailed information, and on-line seat reservations, go to www.dailyhalacha.com.
Today’s Halacha….
Is it permissible to give a gift of money on condition that the recipient must, at some later point, pay the giver a higher amount of money? A person might seek to circumvent the Torah prohibition of Ri'bitt (interest) by giving his fellow money as a gift, and appending to the gift the condition that the recipient will later pay a higher amount. For example, if somebody needs $5,000, the "lender" may give him this amount as a gift on condition that he later pays $8,000. Does this arrangement succeed in circumventing the Torah laws of Ri'bitt, or is this, too, forbidden?
Rabbi Moshe Halevi (Israel, 1961-2001), in his work Milveh Hashem (p. 325), rules that this change in semantics is entirely inconsequential as far as the Torah prohibition of Ri'bitt is concerned, and such an arrangement thus constitutes a Torah violation. Regardless of whether one refers to this deal as a "gift" or a "loan," in the end, a person receives money in exchange for which he must pay a higher amount, which is precisely the Torah prohibition of Ri'bitt.
It is permissible, however, to give a sum of money on condition that the recipient pays a much smaller amount at regular intervals (e.g. monthly, annually) for the rest of his life. In this arrangement, the lender is not necessarily guaranteed to receive more than he gave; it is possible that the recipient will die before the repayments accumulate to the original sum. Therefore, as Rabbi Moshe Halevi writes, Halacha deems such an arrangement as a legitimate business venture, and does not transgress the laws of Ri'bitt.
If a person pledges to give a certain sum of money to another person or an institution, may he stipulate that he will give a higher amount if he fails to fulfill the pledge by a certain date? For example, one might pledge $5,000 to a synagogue and promise to add an additional $1,000 if he does not pay by the time the pledges are due. Is this permissible, or does this violate the prohibition of Ri'bitt, insofar as one pays an additional amount for the time in which the promised sum of money was retained?
Rabbi Moshe Halevi writes that such a stipulation is permissible provided that it was stated at the time when the pledge was made. Since the donor initiated this stipulation voluntarily, the extra payment does not constitute Ri'bitt. Essentially, the donor pledges to give either $5,000 at a certain date, or $6,000 at another date. A person reserves the right to apply whatever conditions he wishes to a voluntary pledge, and hence no prohibition is entailed. If, however, no such stipulation was made at the time of the pledge, and then later the donor wishes to add the extra amount to compensate for his late payment, this extra payment is forbidden by force of Rabbinic enactment. Although this does not violate the Torah prohibition of Ri'bitt, insofar as no loan is involved, it nevertheless resembles an interest payment and is thus forbidden by the Sages.
Summary: One cannot circumvent the Torah prohibition against taking interest by referring to the loan as a gift and then stipulating that the gift is contingent upon the recipient's payment of a higher amount at a later date. One may, however, give a gift of money on condition that the recipient makes small payments at regular periods for the rest of his life, until he dies. If one pledges to give money to a person or institution, he may stipulate that he will give a higher amount if he pays later than a certain date, provided that this stipulation was mentioned at the time when the pledge was made.
