Philantropy^©

Philanthropy in America

In visiting France - or most of Europe for that matter - it is striking that most institutions, most hospitals, museums, schools or similar public facilities are either public or private. Few "not-for-profit" institutions are established by French citizens. Unlike most of our Ivy League schools, the Sorbonne is run by the Ministry of Education. Unlike New York's St. Patrick's cathedral, Notre Dame and Chartres cathedral are supported by French taxes. Unlike the Metropolitan Museum of Art, the Louvre is an organ of the Ministry of Culture.

In October, 2001, Daniel Boorstin wrote an essay "From Charity to Philanthropy." It drew on an earlier essay of the same name from his book Hidden History. Boorstin's essays make the point that, dating back to the Mayflower Compact, America's history has consistently generated independent, vigorous individuals who, upon seeing need for a new institution or service, established a voluntary organization to plan, fund, and run it. America has no hereditary monarchy that might see meeting such needs as its duty; nor is there a government or monarch that might find such independent acts threatening.

Boorstin thought of non-Jew, Ben Franklin, as America's "patron saint of philanthropy." Franklin saw the need for, and helped establish, the Philadelphia police. He promoted paving, cleaning and lighting of city streets. He organized the circulating library and arranged an Academy for the Education of Youth ' later to became the University of Pennsylvania. He also helped set up the volunteer fire department. Citizen activism, seeing a need, organizing for it and getting it funded, is a peculiarly American phenomenon. It may arise from our revolutionary history, the lack of government on the frontier, or the independent spirit and self reliance we think of as part of the American character. Alex de Tocqueville saw and commented on it in the 1830s when he visited the United States. He was fascinated by the remarkable number of voluntary associations he found in the United States. But, no matter the source, voluntary non-profit organizations to meet society's needs are an American reality.

Daniel Gross, in reviewing the new book: The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism by Claire Gaudiani, noted that "In the U.S., where 89 percent of Americans made voluntary contributions in 2001, and more citizens give than vote, we collectively give about 2 percent of our Gross Domestic Product (GDP) to charity; the parsimonious Brits give just 0.7 percent." Jonathan Freedland, a British Citizen, made a similar point in his July 3, 1998 article for the New Statesman, "Lessons from America (Citizen Power in the U.S.)." In it he cited comparable donation statistics from 1993 ($880 per average American family, versus $300 for the Brits) and then went on to note that "more than half of all Americans ' 54 percent ' volunteer for charitable or social service activities involving the poor, the sick or the elderly. The average volunteer gives up four hours per week."

Since 1928 when $2.5 billion was donated to U.S. charities, charitable giving has grown one hundred fold. Over the last four years, despite a recession, donations have averaged nearly $250 billion a year. Of that, more than three-fourths came from individuals, (supplemented with 7.5 percent from bequests, 11.2 percent from foundations and 5.1 percent from corporations).

Counterpart data from the American Association of Fundraising Councils puts the 2002 overall U.S. rate of charitable giving at 2.06 percent. It also indicates that over a 40 year period from 1963 to 2002, the rate has ranged from a high of 2.3 percent in 1963 to a low of 1.5 percent in 1995.

It was Andrew Carnegie who coined the phrase, "He who dies wealthy, dies disgraced." Americans have generally taken that message to heart and with the maturing of the "baby boomers," the wealth and attendant philanthropy will only grow.

Tzedakah, Kuppah, and Tikkun Olam

"Tzedakah" and "kuppah" are unfamiliar words to most non-Jews. And those that have heard them sometimes incorrectly think of them as meaning "charity." It is true that charity has a relationship to tzedakah and kuppah, but they are cousins, not siblings. The distinction is at the core of the Jewish approach to helping those in need. Tzedakah, derives not from "being magnanimous," or "helping out" but, as Rabbi Joseph Telushkin points out in his book, Jewish Literacy, tzedakah comes from the Hebrew root of a word that means "justice." Others tie it to the Hebrew "tzade-dalet-Qof," meaning "righteous," "justice," or "fairness." These are not matters of the kind heart, the discretionary choice, nor of the privileged few, willing to help the less fortunate. No, tzedakah is a duty, a form of self-taxation. One simply must do this. It is a "mitzvah," a commandment rather than a good deed or a voluntary act of kindness. The idea is manifested in the way some Jewish friends budget for charity just as they do for food or housing. It is also demonstrated in paying dues to synagogues and buying tickets for services on religious holidays, rather than relying on the collection plate or pledges. Tzedakah may also be a kindness, but it is first an obligation. Not doing so would be unfair, unjust, even unrighteous.

In his History of the Jews, Paul Johnson writes of the "kuppah"

"From Temple times, the kuppah or collecting box was a pivot around which the Jewish welfare-community revolved, Maimonides stated: 'We have never seen or heard of a Jewish community which does not have a kuppah'. There were three trustees, solid citizens for each kuppah and, charity being mandatory in Jewish law, they had the power to seize goods from non-contributors. . . . The notion of 'from each according to his ability, to each according to his need' was one the Jews adopted before the birth of Christ and practiced even when the community as a whole was distressed. A solvent Jew had to give to the kuppah once he had resided in the community a month; to the soup-kitchen fund after three, the clothing fund after six, and the burial fund after nine."

Johnson went on to note that the duty to give also involved a reciprocal duty of the recipient.

"The Jews hated welfare dependence. They quoted the Bible: 'You must help the poor man in proportion to his needs' but added, 'you are not obligated to make him rich.' The Bible, Mishnah, Talmud, and the commentaries were full of injunctions to work, to achieve independence."

The Jewish Web site "Judaism 101" makes the point:

"We have an obligation to avoid becoming in need of tzedakah. A person should take any work that is available, even if he thinks it is beneath his dignity, to avoid becoming a public charge. However, if a person is truly in need and has no way to obtain money on his own he should not feel embarrassed to accept tzedakah."

The spirit of tzedakah is the subject of a ranking system created by Maimonides nearly 800 years ago which survives today in the Talmud. The hierarchy identifies eight levels of tzedakah extending from the least meritorious to the most. They are:

1. Giving begrudgingly
2. Giving less than you should, but cheerfully
3. Giving after being asked
4. Giving before being asked
5. Giving when you do not know the recipient's identity, but the recipient knows yours
6. Giving when you know the recipient's identify but the recipient does not know yours
7. Giving when neither party knows the other's identity
8. Giving in a way that enables the recipient to become self reliant. This may involve making a loan rather than a gift, providing a job or training, or similar acts that engender self reliance and self-respect

For Jews, whether their spirit of giving arises from level one or level eight, the point is to give. The Jewish community will serve to reinforce the duty. Telushkin also comments on the notion inherent in the public listing of donors.

"the Jewish community regards publicizing donors' gifts in the same spirit as the American practice of asking political candidates to release their tax returns. In both cases, public scrutiny causes people to act more justly."

"Tikkun Olam" is another vital Jewish notion. Generally considered to mean the "repair or mending of a broken world," for some, it draws on concepts relating to removal from the Garden of Eden and a response to original sin. For others it involves the mystical view that in making the world, vessels of light, into which God was pouring Divine Light, were catastrophically shattered. This left countless shards, which entrapped sparks of Divine Light. Humanity must help free and re-unite this light to restore a broken world. For some, this is the role of "the Chosen." Namely, Jews are "Chosen" not in the sense of being favored by God, but chosen for the duty of Tikkun olam. And in this sense, their duty is to all of humanity, not just to their fellow Jews. While Jews have a long tradition of taking care of their own, they have a duty to others as well. Historically, Jewish loan societies, and other works of charity and philanthropy, focused not solely on Jews, but in benefiting all of humanity. As pointed out by Gary Tobin in his 2001 study: The Transition of Communal Values and Behavior in Jewish Philanthropy:

"Tzedakah is also dedicated to serving the world-at-large, non-Jews as well as Jews. The need to "repair a broken world" (Tikkun Olam), is deeply embedded in community values and norms. A strong universalistic component characterizes Jewish philanthropy. The interest in social justice and volunteering evolves constantly. It continues to take new forms, such as the Jewish Service Corps, which is designed to serve the secular rather than Jewish World."

Pinning Down Rates of Jewish Philanthropy

There appear to be no definitive estimates for overall Jewish giving and the available data are contradictory. Nonetheless, a solid case can be made for disproportionate Jewish philanthropy with rates of giving that are at least two to three times the national averages.

As background it is useful to know that the January 2004 National Jewish Population Survey 2000-01 estimated the U.S. Jewish population at 5.3 million residing in 2.9 million households. Annual Jewish income averaged $54,000 per household making total Jewish household income $156.6 billion.

In terms of the low estimates for Jewish giving, Julia Duin's Philanthropy magazine cites Gary Tobin, of the Institute for Jewish and Community Research, as indicating Jewish charitable donations range between 1.5 percent 2.9 percent of annual income - with absolute dollars proportionately higher because, as a group, Jews have higher than average incomes. The mid-point of Tobin's estimate (2.2 percent) would place total Jewish philanthropy at $3.4 billion annually, or $650 per person.

Four experts who research rates of charitable giving by denomination (Hoge, Zech, McNamara and Donohue), estimate higher Jewish philanthropy. They say it rivals Mormon donations which approaches 7.5 percent. At 6 percent, Jewish giving would total $9.4 billion, or $1,775 per person. Moreover, in 1997 Jack Wertheimer, provost of the Jewish Theological Seminary of New York, implied total annual U.S. Jewish philanthropy of $8 to $9 billion. These higher figures appear credible. This is made evident when donations to Jewish causes are looked at separately from donations to secular causes.

In the 1997 American Jewish Year Book, Jack Westheimer indicated "American Jews . . . raised as much as $4.5 billion (annually) for Jewish causes." Of that:

• $1.6 billion went to Jewish Federations,
• $1.4 billion as direct contributions to religious institutions, not including synagogue capital campaigns,
• $700 million to other Jewish charities.
• $250 to $300 million to Jewish cultural, educational, religious and community relations institutions, and
• $425 million more through United Way, other government funding of agencies under Jewish auspices, or as direct funding of Jewish community centers.

Interestingly, by itself, Westheimer's $4.5 billion contributions to Jewish causes is 2.9 percent of Jewish household income and is thus at the high end of Tobin's estimate for total giving.

Some data suggest even larger donations to Jewish causes than cited by Wertheimer. In a 2001 Study, The Transition of Communal Values and Behavior in Jewish Philanthropy, Tobin indicated: "The annual campaign of federations . . . probably accounts for no more than 10% to 15% of all funds raised by Jews for Jewish causes (including synagogue dues and contributions.)" Tobin and Tikkun magazine estimated federation budgets at $1.5 to $2.0 billion per year, suggesting annual funding for Jewish causes totals $10 to $20 billion. Because these are most likely global figures, and U.S. Jews are roughly half the world's total, they suggest annual U.S. Jewish philanthropy to Jewish causes of $5 to $10 billion. This is even more than Westheimer's estimates and neither set of numbers considers the large and growing Jewish philanthropy directed towards secular causes.

In the June 14, 2002 issue of "Jewish Week", Tobin estimated that Jewish family foundations total $30 billion. Because each year, such foundations must spend at least five percent of their endowment just to retain their tax status, these family foundations must make at least $1.5 billion in annual payments to charitable causes. Tobin goes on to say that "Many Jewish foundations give little or nothing to Jewish causes, and most give a minority of their dollars to Jewish causes." In his 2003 study, Mega Gifts in American Philanthropy, Tobin studied 865 philanthropic gifts of $10 million or more made between 1995 and 2000. Of those, the 188 made by Jews totaled $5.3 billion and of that amount, only 6 percent went to Jewish organizations or institutions. Most of the money went to education (49 percent), arts/culture and humanities (21 percent) and health (6 percent).

Couple those data with the roughly $2 billion a year the given by the nineteen largest American Jewish philanthropists to mostly secular causes (See Business Week material below), and The National Population Survey which estimated 62 percent of U.S. Jews give to non-Jewish causes, and a basis is formed to support the Hoge, Zech, McNamara and Donohue estimate, cited earlier, that Jews probably make charitable donations approaching 7.5 percent of their annual income. This is roughly three times the national average.

Declines in Giving to Israel and to Jewish Causes

Recent decades have seen declining Jewish philanthropy (as a percent of total giving) directed to Israel and Jewish causes.

Exhibit 24a shows total funds raised by the Jewish Federation, United Jewish Appeal and the United Israel Appeal, and of that, the amount allocated to Israel. While these are not the only sources of U.S. Jewish financial support to Israel, they are a significant part. The Exhibit shows the large early support when Israel's survival was in question ($147 million of the $200 million raised in 1948), a second spike at the time of the 1967 Six Day War ($237 million of the $302 million raised) and a third spike when the Yom Kippur War spurred donations of $488 million from the $684 million raised. Since then, the dollars allocated to Israel have stayed in the $300 to $375 million range, while the percentage allocated to Israel has dropped from 73 percent in 1948 to 36 percent in 1999.

Mirroring this is the ever growing support for secular causes, the subject of many articles in the Jewish press. Tobin's 2003 publication analyzing gifts larger than $10 million (see above) made the case in stark terms. His review of 188 Jewish philanthropic gifts of $10 million or more between 1995 and 2000 showed that 94 percent of the money went to non-Jewish causes. Tobin suggested some of the reasons saying "tzedakah has taken more of a character of American philanthropy, and will continue to do so, representing less the religious tradition of Jews and more the civil tradition of philanthropy in the United States." (p. 9) Some of this he attributes to assimilation, some to an ecumenical view of "tikkun olam," some to the need to give back to the country that afforded the opportunity to earn such wealth, some to the desire to be a positive ambassador of the Jewish community, and some because the non-Jewish causes are "more compelling."

In the press coverage of Tobin's data, concern was expressed about ever present, perhaps growing, assimilation and the alienation of some Reform and Conservative Jews by the increasingly Orthodox orientation of the Israeli government which may be "turning off" their less orthodox American brethren.

Mega

If there is one group working hard, albeit quietly, to sustain philanthropy directed to Israel and Jewish causes, it is Mega.

On December 21, 2001, Forward, a leading Jewish publication, did a story titled "Moneyed 'Study Group' Is Engine for Charity Revolution" It provided historical background and an inside look at the goals of "mega-group," more commonly called Mega. It followed by more than two years, a May 4, 1998 Wall Street Journal story, "Titans of Industry Join Forces To Work for Jewish Philanthropy," the first significant mainstream press reporting on Mega.

Mega is probably the single most powerful and influential group of philanthropists to support Jewish causes and Israel. As described in the Forward story, Rabbi Brian Lurie, former chief executive of the United Jewish Appeal (UJA), first assembled what would become the original Mega group in 1991. His purpose was to arrange financial support for Operation Exodus, the UJA program to bring Jews from the Soviet Union to Israel as the Soviet Union collapsed. Rabbi Lurie arranged for a small group ("a dozen or so") very wealthy Jews to provide the needed support, operating under the leadership of Charles Bronfman and Leslie Wexler. The group soon took on the flavor of a "911" service, ready to organize and fund efforts required to respond to any major crises threatening Jews.

Over time, Mega's scope broadened. The "study group" has since become a forum for discussing perspectives on philanthropy and Jewishness. As assimilation, marriages outside the faith, and other forces have weaned Jews from their religion and culture, Mega has attempted to respond by encouraging a certain pride and commitment to retaining Jewish heritage. Edgar Bronfman is quoted saying "We want it to be cool to be Jewish." Steven Speilberg spoke about his "personal religious journey" when he attended the April 1998 meeting. Members share their perspectives on philanthropy and how to have the greatest impact from their sometimes entrepreneurial approaches to practicing it.

They also promote their own high priority projects and attempt to enlist support from fellow members. Thus, in Mega, the talk is not about funding a new hospital or library, unless it is one needed in Israel, or in some part of the world where Jews are poorly served. There is also a commitment to helping Israel in a wide ranging series of projects.

Among major projects that members have singly, or jointly pursued are:

• Hillel - support of its on-campus Jewish chaplaincy
• STAR - Synagogue Transformation and Renewal
• Partnership for Jewish Education - an $18 million project to provide matching grants for Jewish day schools.
• Birthright Israel - helping to send any young Jew, who wishes to go, to Israel; as of December 2001, 22,000 young people had already gone.
• Jewish Campus Service Corps - allowing recent college graduates to provide at least a year's service supporting "Jewish life" on college campuses.
• Partnership for Excellence in Jewish Education
• Bronfman Curriculum Initiative - intended to help private high schools teach Jewish ethics and philosophy (an early program not considered particularly successful)
• Foundation for Jewish camping (and summer camps)
• Foundation for the Defense of Democracies (FDD) - formerly called Emet and occasionally called "Truth," a controversial "think tank" intended to provide education about terrorism and to better communicate Israeli perspective to the American public. One project brought 52 undergraduates, 19 professors and a journalist to Israel to see, first hand, the effects of terrorists. Another organized a conference for Iraqi women in conjunction with the U.S. Agency for International Development.

Mega reportedly meets twice a year, typically over dinner the night before with a session the next day. Often there are presentations by non-members and sometimes spouses attend. Members pay annual dues ($30,000 per year in 1998) to cover costs of "research, speakers and incidentals."

Mega does not release a membership list, but among those who are or have been members are some of America's wealthiest and most prominent Jews: Charles and Edward Bronfman, Leslie Wexner, Michael Steinhardt, Howard "Bud" Meyerhoff, Leonard Abramson, Lester Crown, Marvin Lender, and John Goldman. Charles Schusterman, Laurence Tisch, and Max Fisher (all now deceased), were early members of Mega. At the time of the May 1998 meeting, Steven Spielberg was reportedly considering membership.

Mega's initial success led to formation of other mega like groups whose members reportedly include Bernard Marcus and Peter May. An international group may include the Arison family, the Bronfmans, and others, including members of the Rothschild family.

Mega's members work to keep the group private and low profile. Should one wonder why, a Google search of the word "mega" together with the name of any prominent member will yield a case study of Web based suspicion, hate, and anti-Semitism. In any group of one hundred such Google links, two-thirds will likely be negative screeds. Among them, the Neo-Nazis and right wing kooks allege:

• Mega is (or was) a tool of Massad, the Israeli Intelligence Service, perhaps functioning as a mole in the Clinton Whitehouse.
• No, not a tool of Massad, Mega actually gives orders to Israel's prime minister, since its members' wealth makes Mega more powerful than anyone in Israel,
• No, it is tied to the Israeli's who were behind 9/11.
• No, it is an Israeli lobbying organization, doing Israel's dirty work in Washington, (perhaps they blackmailed George W. Bush, threatening to get John McCain elected if Bush had not towed the line and avoided criticizing Sharon.)
• No, Mega wants to keep Israel from reaching any peace deal with the Palestinians because Mega members would lose money, or peace would somehow dissipate the commitment of Jews to being Jewish.
• No, most members have family histories in organized crime; they are just perpetuating the family business.
• And, Mega member Michael Steinhart, "son of a Mafia don" is the key figure behind the Clinton pardon of Marc Rich.

Mega also comes in for criticism from Israeli liberals. They generally see Mega's concentration of powerful people as threatening and feel that instead of supporting Jews and Jewishness, Mega should be supporting internationalism and the Palestinian cause. In this way, Mega should support humanity, "as Lenin did", rather than Jewishness. Mega should head up a non-exclusionist movement for brotherhood within Palestine.

Finaly, despite the role of the UJA in its formation, and the major role Mega members have played in UJA and similar organizations, there are some Jews who express concern that Mega is diluting the efforts of the Federation and UJA.

Business Week's "50 Most Generous Philanthropists"

A Business Week December 1, 2004 feature article "Philanthropy 2004" provided a table of "The 50 Most Generous Philanthropists." Some of the names were no surprise. Non-Jews Bill and Melinda Gates top the list having pledged or given away nearly $28 billion. Other prominent non-Jews included Warren and Susan Buffet, Gordon and Betty Moore, the Waltons, and Ted Turner.

But perhaps the most astonishing aspect of the list is that at least nineteen of the fifty philanthropists are Jewish. As such, Jews represent 38 percent of America's 50 most generous philanthropists in a country where they are only 2.2 percent of the population. This is nineteen times more than their numbers would suggest.

The names are highlighted on Exhibit 24b. They donated a nearly $10 billion over a period of five years - $2 billion a year to philanthropic causes.

This disproportionate level of Jewish philanthropy is corroborated by data from several other sources. Tobin's study of Mega-gifts showed that 22 percent of gifts larger than $10 million given between 1995 and 2000 (representing 18 percent of the dollars) were given by Jews. Tobin also cited another study, "Charity Begins at Home: Generosity and Self-Interest Among the Philanthropic Elite." In that study, the author noted that 28.5 percent of the sample of philanthropists they interviewed were Jews.