Living in a New Era of Jewish Philanthropy

In recent memory, Jewish philanthropy has been alive and well. The Jewish people in general are very generous and give in large quantities to Jewish and secular causes. According to Gary A. Tobin and Aryeh K. Weinberg in their study of Mega-Gifts in Jewish Philanthropy, "As a community, Jews give disproportionately more than their numbers would indicate and even more so when it comes to America's largest gifts." The Jewish community should feel proud of their accomplishments in aiding in the growth of non-profit organizations by donating funds to sustain them. However, we are now living in a new reality. The economy has taken a turn for the worse and people are feeling its effect from the lowest socio-economic level to the highest. Everyone is feeling a tightening of the wallet when the need for charitable giving is increasing as the realities of the current recession take effect. Congregations are facing the need to cut costs by eliminating programming, reducing staff expenses, and putting construction and renovation projects on hold. The current economic situation has shifted the paradigm and consequently caused the need for a change in thinking about philanthropic opportunities.

Aside from the stock market, there is another inescapable factor that has blighted the Jewish philanthropic world. The Bernard Madoff scandal has claimed billions of dollars from public and family foundations. The Talmud teaches that when giving money, you should not just hand your money to one person. Collecting money requires two people and distribution of communal funds requires three. Our tradition also stipulates that the two people collecting cannot be related in order to avoid a conflict of interest (Bava Batra 8a). Unfortunately, the Jewish community is re-learning the lesson that our sages taught so many years ago. Family foundations trusted Madoff with significant portions of their endowments, whether t was a small sum of money or a multi-million dollar operation. In addition to billions of dollars lost, the ability to trust those who manage our investments has been irreparably damaged through this unfortunate turn of events.

Philanthropy has changed a great deal over the past few generations. Jewish philanthropy used to revolve around giving money to the local Federation and paying dues to a congregation. Karmi Monsher, the Valley Alliance Women's Department President of the Federation of Los Angeles, tells the story of her grandfather who used to give money to the Federation volunteers who came to their door twice a year, not necessarily because he wanted to, but because he felt obligated. He felt it was up to him to hold up the Jewish community. Karmi's passion for Federation was fostered from a young age by hearing about her grandfather's giving. When asked if this kind of philanthropy is still dominant today, she reported no. Just because she supports her Federation and home congregation on the basis of it is "what Jews do," she thinks that others in her generation and the upcoming generations will need some other impetus. She thinks Federations and congregations need to work on new ways of attracting younger donors to give.

Giving because 'it is what Jews do' is not as common as it used to be, and Federations are not spending resources cultivating small donations like. According to Marla Abraham, the Director of Premier Philanthropy at the Federation in Los Angeles, Federations found that it cost just as much to cultivate a small gift donor as a large gift donor. Large gifts sustain programs for a long period of time and they provide a benchmark for other donors to match. Jonathan Sarna of Brandeis University said in a personal interview that, "Federations used to measure their success not only the amount of money they collected on a Super Sunday, but by indentifying numbers of donors." He goes on to say, "They felt a success if they had a great number of new donors in addition to a large amount of money because that meant that people who gave were indentifying with the Jewish people."

There has been a progression away from this type of giving to communal philanthropy. People now more than ever want to know that their money is being used to fight hunger or provide clothing for the poor in the community. They are not as inclined to give to an annual fund because it pays for maintenance and administration costs which are seen as less glamorous. The idea of giving to a synagogue or organization whose function is to serve the Jewish people rather than whose sole purpose is to help starving children is difficult for some to understand. The current generation wants to know where their money is going and have direct control over how it is being used. Furthermore, giving tzedakah to a local Jewish organization does not identify one as Jewish as it may have in the past.

Until now, this new wave of high level individual philanthropy has worked well because size creates leverage in the financial world and individuals have been able to utilize this power to have a greater impact. However, we are now seeing that have a system where there is a central authority that controls the community funds of many of the wealthy philanthropists may too have its drawbacks. The Madoff scandal has shown the Jewish world that even though large organization can generate revenue more quickly, that there is an inherent risk in having 'all of your eggs in one basket.' This reality might actually bring us back to our Federation model roots, where it might be advantageous to invest in cultivating donors in the lower brackets in order to reduce exposure to future collapses. We may be coming into an age of philanthropy where donating a small amount will make an impact. Federations were not as widely damaged by this scandal because they have stricter rules as to where and how the money is invested. In our new reality, the Jewish community might have to give up some autonomy for donating money and leave it up to big organizations that have rules and follow them.

Some organizations are already cultivating smaller scale donors because they, too, can make an impact. Dr. Jonathan Sarna reported that we are living in an interesting time for the smaller donor. The Barack Obama presidential campaign showed the world that collecting small online donations in huge numbers could make an impact. This campaign of small online donors allowed the candidate to buy a 30-minute spot in primetime television among other effective campaigning mechanisms to express his goals for his presidency and subsequently win.

Yeshivat Hadar, a Jewish organization comprised of young Jews in New York, is taking lessons learned from the Obama campaign by starting online fundraising for the small gift donor. In a different way than the Federation model, this technological change may bring some focus back to the small gift donor. Dr. Sarna points out that "if every Jewish person could give 100 dollars it would not equal nearly as much as was lost in the Madoff scandal but it would be 120 million dollars closer."

The old Federation model of collecting funds on a small scale and helping people indentify as Jewish by doing the Jewish act of giving tzedakah to the community may be an invaluable lesson for the current economic situation. With the advancement of technology this will look different from a phone-a-thon but in essence it will be the same. Philanthropy grows and changes, moves with the ups and downs of the economy. Right now we are in a downturn, but it will rise again. It is important that we learn from the generations that came before us to know how to best handle these difficult times.

(Developed By: Lisa Delson, HUC-JIR, Cincinnati)

Abraham, Marla. Personal Interview. 5 October 2008., Yeshivat Hadar, New York City
Monsher, Karmi. Personal Interview. 6 October 2008.
Sarna, Dr. Jonathan. Personal Interview. 31 December 2008.
Tobin, Gary A. and Aryeh K. Weinberg. Mega-Gifts in Jewish Philanthropy: Giving
Patterns 2001-2003. Institute for Jewish & Community Research. San Francisco, California.