The History of Jewish Philanthropy in America
by Evan Mendelson
The American
Jewish communal
enterprise is a unique blending of Jewish
religious traditions and the democratic pluralistic
traditions of the United States. Out of biblical
injunctions to protect the poor, orphans,
widows and strangers, a vast institutional
infrastructure, supported by voluntary philanthropy,
has developed. It has helped shape, and been
shaped by, the uniquely American nonprofit
sector — a phenomenon which often astonished
foreign observers like Alexis de Tocqueville.
He was fascinated by the large number of
voluntary organizations that existed in the
1830's. This “third sector” continues
to be unequaled in the world in its size
and scope. The yearly budget of the American
nonprofit sector exceeds the budgets of all
but seven nations in the world, and nonprofits
employ more civilians than the federal and
state governments combined.
The American Jewish philanthropic
tradition has a parallel history. From Torah and Maimonides through the establishment
of the institution of the charitable trust
in 1601 in England (companion legislation
to the Elizabethan Poor Law), the American
Jewish way of giving is influenced by a strong
religious imperative for individualized tzedakah and
by the development of modern American legal
mechanisms that encourage private philanthropy.
The modern foundation is
a recent invention, created at the beginning
of the twentieth century by the great industrialists “for
the good of mankind.” Foundations “professionalized” the
practice of charity, bringing modern notions
of management, efficiency and scientific
thought to the enterprise of ameliorating
human problems. As John Gardner, founder
of Independent Sector, described it, “Wealth
is not new. Neither is charity. But the idea
of using private wealth imaginatively, constructively,
and systematically to attack the fundamental
problems of mankind is new.”
American Jews developed
a unique model of philanthropy, which has
greatly influenced the general community's
philanthropic structure as well. The Jewish
cultural tradition of “taking care of
one's own” shaped the giving mechanisms
and institutions created to address immigrant
needs at the turn of the century. Individual
support for synagogues and welfare agencies
grew into a Jewish federated philanthropy
of pooled individual contributions that supports
a defined institutional infrastructure. Begun
in 1895 with the Boston Federation, the federation
movement has grown to 178 federated communities.
Few independent Jewish
foundations existed before the 1970's. But
as American Jewish wealth grew, opportunities
for philanthropy in the general community
increased, and interest in “hands on” giving
developed, the number of Jewish foundations
grew. Jewish foundations of substantial size
began to form. In the last decade there has
been an explosion. Dr. Gary Tobin, of Brandeis
University's Institute for Community and
Religion, estimates that there are 7,000
Jewish foundations, with assets totaling
$10-15 billion. Some are private foundations
without family connections to the original
donor but with some mandate of Jewish giving.
Most of these are family foundations where
either the founder or his/her descendants
control the funding process.
Funder Rather Than Foundation
The term “foundation” may
be misleading. As a legal term it refers
to a specific set of privileges and responsibilities
as defined in the tax and corporation laws
of the country and the states. The Foundation
Center, a nonprofit organization that collects
information on foundations, defines several
different kinds of foundations, some within
the legal definition and some considered “public
charities” by the IRS. The private foundation
is what we think of when we use the term “foundation”.
But many of the “family foundations” are
actually donor-advised funds or supporting
foundations of a public charity, such as
a community foundation or a federation. Federations
are actually grant-making public charities,
or what is commonly called public foundations,
which raise the funds that they allocate
annually from a large number of donors. This
new, growing phenomenon of independent foundations
is, therefore, quite diverse and relates
more to the attitude of the giver, than the
structural form it takes.
Today's Jewish Funder
Of the 39,000 private foundations
in the United States identified by the Foundation
Center (1994 information), two-thirds are
managed by families. While individually they
tend to be small (assets under $5 million),
as a group they hold assets worth more than
$86 billion and make grants totaling over
$5 billion. According to a study by Dr. Gary
Tobin of Brandeis University, only 24% of
Jewish family foundations give away more
than $250,000 per year. Sixty-four percent
give $50,000 to $250,000 per year. However,
these figures probably are not an accurate
reflection of the total giving of the philanthropists,
because many of them give individually as
well as through their foundations. The most
recent philanthropic model is the growing
number of independent donor-advised funds
and supporting foundations associated with
Jewish Federations. The estimates are that
they total well over $3 billion and are the
fastest growing philanthropic mechanism today.
According to Dr. Tobin, “While billions
of dollars have flowed into foundations over
the past few years, it is but a trickle of
what is expected to take place over the next
decade.”
An enormous transfer of
wealth is expected in this country during
the next several decades. Eight to ten trillion
dollars will be passed down from Americans
over the age of 50 to their children and
their grandchildren, creating the largest
transfer of wealth in the nation's history.
This windfall from the WWII generation that
scraped and saved to build businesses, and
acquire stocks, bonds, and real estate will
transform 5 million average Americans into
millionaires.
Particular vs. Universal
Philanthropy
A majority of American
Jews support both Jewish and general causes.
Even the largest and most well known “Jewish
foundations” fund within the general
community as well. Some older, more established
foundations have focused on general community
funding through the foundation, and dispersed
their Jewish philanthropy through a lump
sum given to the local Federation, and/or
discretionary contributions by the individual
family members. This model is changing, however,
as a growing number of foundations are beginning
to evaluate their Jewish funding in the same
way they assess their general funding—as
a program area with focused funding priorities.
In this milieu, private
Jewish foundations are emerging as one of
the most critical elements in the changing
face of Jewish communal life in America.
Foundations provide a catalyst for change
by funding new and creative approaches to
old problems. They can promote inter-organizational
collaboration and non-bureaucratic structures
to address the growing complexity of human
needs. Collaboration among several funders
can focus attention and provide the necessary
funds to see a project through to its conclusion.
Working to expand the impact of local Jewish
Federations, foundations can complement the
allocation process, providing the experimentation
that can lead to institutionalized change.
Independent Jewish philanthropy
(whether through private foundations, donor-advised
funds or supporting foundations) represents
a uniquely American form of the philanthropic
imperative. As a new century dawns, its impact
will be felt both in the Jewish community
and American society.
Sources: Jewish Funders
Network |