American Jewish Year Book Examines Current Trends In American Jewish Philanthropy

American Jewish Committee
Wednesday, 3 September 1997

Over the past few decades, two significant shifts have occurred in American Jewish philanthropy: "One is a hemorrhaging of money out of the Jewish community to non-Jewish causes….Equally significant…is the turn to designated giving….Big givers are insisting on the right to designate how their money is spent - an approach which directly contravenes a basic assumption of Jewish federations, namely that setting priorities and planning for the needs of the Jewish community should be done by a central body."

These challenges and potential dangers in Jewish giving patterns are explored in a major new study - "Current Trends in American Jewish Philanthropy" - written by Jack Wertheimer, provost and professor of Jewish History at the Jewish Theological Seminary. The article is found in the just-released 1997 American Jewish Year Book, published annually by the American Jewish Committee.

Prof. Wertheimer notes that American Jewish philanthropy, long hailed for its blockbuster successes in time of emergency - "war and rescue" -- today confronts a new agenda, one aimed as much at strengthening Jewish identity and Jewish communities as at helping Jews in need. Although this is happening at a time of significant change in both Jewish demographics and the philanthropic environment, says the author, "considerable resources continue to be funneled to Jewish causes."

According to Prof. Wertheimer, in 1995, Jewish philanthropic giving to domestic and international causes totaled approximately $4.2 to $4.4 billion. This includes $1.5 billion to federations (including allocations to United Jewish Appeal), revenues of over $2 billion in the religious sector, some $700 million sent to Israel outside the UJA channel, and $250-300 million earmarked for cultural, educational, religious, and community relations institutions and agencies.

The above sums do not include United Way and government funding for agencies under Jewish auspices, which would nearly double this total, nor Jewish community centers and some other institutions, whose combined budgets exceeded $425 million.

"Contrary to the fears of some observers," asserts the author, "these amounts represent a steady increase in Jewish giving - even when inflation is taken into account."

What has changed in recent years is the way the funds are both contributed and distributed within the Jewish community. Prof. Wertheimer identifies four major patterns that have emerged: (1) Government funding accounts for approximately half of all revenues of domestic Jewish agencies, particularly in the human-services area; (2) the religious sector - synagogues, day schools, denominational institutions - is absorbing an ever larger share of Jewish resources - roughly twenty-five percent; (3) the proportion of funds going to federation-sponsored endowments and foundations, as opposed to the annual campaign, is increasing dramatically; and (4) the amount of money flowing to Israel outside UJA and federation channels is now more than twice the amount that travels the "traditional" route.

For Prof. Wertheimer, the state of Jewish giving has always served as a gauge to "measure the vitality of the wider Jewish communal enterprise." Historically, Jewish philanthropy served a dual purpose: it financed a broad range of local programs, national institutions, and international efforts. It also served as a means of building communities, through which it developed a cadre of lay leaders and strengthened Jewish political influence.

In his report, Prof. Wertheimer examines several broad questions in terms of what they suggest about the state of Jewish philanthropy and the condition of American Jewish life. Namely, What are the major institutional structures created by American Jewry to raise, allocate, and disburse philanthropic dollars? What do we know about different populations of donors? How have patterns of giving changed among the wealthiest and traditionally most supportive donors?

The study traces the development of federations as the central fund-raising bodies in local Jewish communities, and their growth in scope and influence. According to Prof. Wertheimer, although annual campaigns have been declining in inflation-adjusted dollars, federations have developed broader, more sophisticated fund-raising strategies that include endowments and foundations under federation control. As a result, "the overall growth of assets controlled by federations outside the campaign structure is quite impressive," jumping from less than a quarter of a billion dollars in 1975 to nearly $4 billion in 1995-96.

Turning to the religious sector, the author views the growth in its funding as "unacknowledged," in part because it is difficult to track revenues in this area, and in part because some of the funding - chiefly tuition fees - is not viewed as philanthropy. Tuition aside, he notes, "the religious sector takes in huge amounts of Jewish giving." This in turn affects other sectors of Jewish life, as families paying synagogue dues and school tuition are hard-pressed to contribute to other Jewish causes.

"The revenues of other domestic Jewish organizations outside the federation network and the religious sector pale by comparison," writes Prof. Wertheimer, with national "community relations" organizations and cultural and educational concerns (such as museums and libraries) dependent upon their own sources of fund-raising.

When it comes to Jewish international needs, the evidence points to a decline in the share of federation campaign dollars going to the United Jewish Appeal - from 50 percent to 42 percent nationally over the course of the 1980's. By 1994, UJA and other overseas agencies received slightly under 40 percent of funds raised by federations in their annual campaigns.

One reason for this decline is the desire "to keep larger amounts for domestic needs - especially as concern grows in the American Jewish community about the prospects for 'Jewish continuity' in the face of rising rates of intermarriage and indifference among younger Jews."

Another is the doubt that has arisen about the State of Israel's actual need for American Jewish philanthropy, given its growing economic self-sufficiency, the declining importance of Jewish philanthropic dollars relative to the Israeli gross national product, and the declining attachment to Israel of many American Jews. "These new circumstances will undoubtedly shape Jewish philanthropic giving to Israel in the future," states Prof. Wertheimer.

Meanwhile, he points out, "one of the more intriguing questions…centers on money that is transferred outside of the UJA channel," through the proliferation of "friends of" organizations, founded to direct money to specific institutions in Israel. In 1994 such groups raised $690 million, almost double the amount raised by UJA. And this may not, states the author, "include all the giving to smaller charities, such as yeshivas, let alone contributions to Israeli political parties."

Creating a profile of "rank and file" donors, Prof. Wertheimer notes that the percentage of Jews who give to charity is roughly the same as all Americans, but that it is a relatively small population of big givers that donate most of the money that goes to Jewish causes. The most pertinent question is whether Jews continue to give generously to Jewish causes.

Among some findings of philanthropic patterns: 1) While it has been found that the size of a Jewish community is not a major factor in determining either the absolute numbers of Jews who contribute or the sums they contribute, the "culture of giving" or "culture of generosity" in particular localities does affect philanthropic patterns. 2) Jews "on the move," with limited attachment to their places of residence, continue to give at relatively high rates to non-Jewish causes. 3) Professionals (physicians, etc.) are less susceptible to the forms of peer pressure and persuasion that once elicited large donations from entrepreneurs. Others, such as academics, pride themselves on their independence from institutional life. 4) Larger percentages of younger Jews tend not to donate to Jewish causes. The issue here is not that lower dollar sums are donated, since younger people have not yet reached their peak earning years or accumulated assets, but rather the smaller numbers of young people who contribute at all to federated campaigns. 5) A family's longevity in the United States profoundly affects its Jewish involvements, with the families here the longest (at least four generations) least likely to contribute. 6) The change in family structure has also had an impact on Jewish giving. With more younger Jews never marrying or having children, and rising divorce and intermarriage rates, rates of Jewish philanthropy are adversely affected. 7) The rise of gender equality means that women today have a far greater role in deciding on family contributions to philanthropy. 8) Jewish religious identification, including regular synagogue attendance, ritual observance, travel to Israel, friendship and association patterns and voluntary activities for Jewish causes all correlate strongly with Jewish giving.

Turning specifically to the relatively small group of big givers, Prof. Wertheimer stresses that "trends within this population have prompted the greatest worry among observers of Jewish philanthropy."

By 1990, half of all funds raised through federated campaigns in North America came from one-half of 1 percent of Jewish households. A few years earlier, 1 percent of givers contributed 60 percent of federation funds. "If anything, then, Jewish philanthropy is even more dependent upon large givers than are general charities," where commonly 80 percent of the gifts are given by 20 percent of the membership of any organization.

Prof. Wertheimer observes that family foundations are now the major vehicle for philanthropic giving by big donors, with over 3,000 such foundations currently maintained by Jewish families.

"The overall picture," he writes, "is of family foundations that are channeling the majority of their wealth into non-Jewish causes….In part this is occurring because either the original donors of foundation assets or their

heirs are disconnected from the Jewish community….With spiraling rates of intermarriage spurring disaffiliation from the Jewish community, some heirs of major donors to Jewish causes have severed their ties to Jewish philanthropy….Equally important, wealthy Jews are earmarking ever larger percentages of their giving to non-Jewish causes because they are no longer excluded from the inner circles of those philanthropies….In addition, as American corporations and universities have opened their once closed doors to Jews and hired them in executive positions, successful Jews have begun to give generously to the causes favored by their non-Jewish counterparts."

The final aspect of Jewish philanthropy Prof. Wertheimer explores is that of designated giving, which he contends often creates "overlap and waste" and "destroys any hope for coherent planning in the Jewish community. Jewish resources are allocated by hundreds of separate boards, some knowledgeable, many not,

about the needs of the larger Jewish communal enterprise….As wealthy Jews assimilate to the norms of their class, they will give decreasingly to Jewish umbrella organizations."

In conclusion, he states: "A balance sheet of contemporary trends in Jewish philanthropy requires an accounting of the considerable resources that continue to be funneled to Jewish causes, as well as a recognition of some of the significant shifts in giving that are potentially deleterious. On the positive side, there is great wealth in the Jewish community and still much generosity. The sums donated to Jewish causes continue to grow at a robust pace….Somewhat more worrisome, perhaps, is the increasing dependence upon a shrinking base of donors….From the perspective of those concerned with drawing Jews into further engagement through the federation model, this matters a great deal….As the donor base shrinks and as donors insist on designated giving, the model of communal partnership and planning will weaken.

"Jewish philanthropy [today] enriches the quality of Jewish life through its support of institutions that Jews require to live well-rounded Jewish lives - synagogues, educational institutions, community centers, cultural institutions, and the like. While it is far from certain that these types of programs can generate the same excitement and engagement as stirring campaigns in times of war and rescue, there is reason to believe that for the foreseeable future, enough Jews will heed the call to participate in and enhance the quality of Jewish life - for themselves and for all Jews."

The 1997 American Jewish Year Book contains two other feature articles: "Israeli Literature and the American Reader," by Alan Mintz; and "Jewish Denominational Preferences," by Bernard Lazerwitz, J. Alan Winter, Arnold Dashefsky, and Ephraim Tabory. Also of interest is "The Rebirth of Jewish Scholarship in Russia," by David E. Fishman. The volume also offers reports on Jewish communities around the world, and articles on Jewish life in the United States, including updates on politics, intergroup relations, church-state issues, anti-Semitism, religion, and communal affairs.

The Year Book also provides directories of national Jewish organizations, periodicals, schools, and federations and welfare funds, as well as religious calendars and obituaries of prominent Jews, including an obituary article on historian Jacob Rader Marcus, by Jonathan Sarna.

Dr. David Singer is the editor of the 1997 American Jewish Year Book. Ruth R. Seldin is executive editor.

For more information, or to contact American Jewish Committee, see their website at: www.ajc.org