The Second American Jewish Revolution
A second American Jewish revolution is now underway. If the first “revolution” launched the current Jewish federation model over 100 years ago, the second is now seeking to construct an alternative enterprise, drawn in part from the core values of American business and entertainment. Mega donors, individuals and family foundations that have garnered or inherited significant wealth are engaged today in creating new initiatives designed to reinvent aspects of Jewish religious and communal life and to impact through their giving the larger society. Acknowledging that the current federation system accounts for only 15% of Jewish charitable giving today makes it possible to better understand the scope of these counter-establishment trends.
This new economic reality can be measured in part by examining the various initiatives inspired and supported by the mega donors, including Birthright Israel, Project STAR (Synagogue Transformation and Renewal), Partnership for Excellence in Jewish Education, and more recently, a collaborative initiative to establish REBOOT1. Similar initiatives such as Joshua Venture, which recently collapsed, represent other expressions of this entrepreneurial approach to organizing and managing communal change by creating seed funding for new and innovative programs to serve generation x’ers and y’ers. As part of this thrust to reconstruct community, “Michael Steinhardt estimates that he has donated $100-million in the past decade to such projects because, he says, ‘I felt the Jewish institutional world was growing weaker and was structurally archaic.’” 2
But this second revolution is also about the successful engagement of Jews into the nonprofit enterprise, as this changing investment pattern of charitable dollars reflects the comfort level and degree of integration experienced by Jews within the larger society. Mega donors are leading the way in repositioning the Jewish partnership with the generic social networks and philanthropic systems of American society.
The Context for Change:
Over the course of this past decade and continuing into the foreseeable future, it is estimated that more than a trillion dollars will pass from one generation of Americans to another. A significant portion of that generational transfer of wealth involving billions of dollars will impact Jewish families and their giving patterns.3 The nature of these changes now contributing to this new revolution is driven by a host of demographic factors. In the first instance, the centerpiece of traditional Jewish philanthropy, the federation system, emerged as an effective crisis-management model designed to raise needed funds and to distribute essential services. The institutional model was capable of effectively responding to critical events in the 20th century where funding focused on rescue and relief. This system was constructed to serve a generation of donors who were committed to shared values and defined sets of interests and who identified with a centralized, single campaign approach. The federated system had developed in response to the world-wide priorities of the Jewish people an international partnership with the Jewish Agency and the JDC that served its global mission and vision.
Yet, increasingly new generations of Jewish philanthropists have begun to identify with a narrower range of Jewish interests, often locally-based and institutionally-focused. Similarly, an array of social indicators are impacting patterns of giving including the increased mobility of American Jews, who move on average every five years and often maintain second homes,4 along with the growing options for philanthropic giving available both from within and outside of the Jewish community. Some of this is borne out by the findings of the 2001 National Jewish Population Survey found where “9 percent of people age 35-49 gave $100 or more to a local Jewish federation, and only 2 percent of those ages 18 to 34 made gifts of that amount. What’s more, Jews said they were directing more of their gifts to other Jewish causes and to secular charities. For instance, people age 35 to 49 gave an average of $73 to local Jewish federations, $279 to other Jewish causes, and $481 to non-Jewish institutions.”5
The New Communal Infra-Structure:
This must be understood as a revolution of generations, as x’ers and y’ers are defining “community” around a different set of parameters. “Sovereign self” has replaced the “collective good”, just as an entrepreneurial approach to institution building has supplanted the federation’s traditional crisis-based model and the umbrella framework for charitable giving. This revolution encompasses new uses of language, advanced technologies, and different modalities of organizing. If the established communal model was understood to be an integrated, multi-agenda approach to collective problem-solving, the emerging framework is highly diffuse and driven by single-issue constituencies, with a market approach that can be described as segmented rather than holistic. Today, the emergence of many new institutional models is reflective of these social changes, in part driven by the new philanthropic impetus to reconfigure the communal enterprise. Some of these new institutional initiatives continue to thrive, while others have already collapsed or have been folded into other organizational structures. In response to these new challenges, federations and other traditional fundraising models have shed their historical approach to crisis-based campaigning in an effort to reflect these generational and social shifts. In turn, these established communal structures have begun to experiment with various innovative and donor-directed initiatives, as discussed elsewhere in this paper.
Both the number of new national organizations, estimated to be in the several hundreds, and new Jewish periodicals and newspapers that have been created over the past 20 year cycle suggest the breath and significance of this revolutionary trend. The emergence of these organizations represents the single largest growth of new Jewish institutions, since the initial communal revolution covering the late 1800’s and early decades of the twentieth century. While some of these newly formed entities have emerged directly as a result of the involvement of the mega-donors, such as Birthright Israel, others have responded to the generational and cultural shifts that have defined this timeframe. Among the other institutions that have been created in this time sequence are political groups with highly-directed agendas, such as the Republican Jewish Coalition (1985), the National Jewish Democratic Council (1990), Coalition on the Environment and Jewish Life (1993), Pro-Israel (1990), and UN Watch (1993). In addition to the formation of the Jewish Funders Network (1990), Jewish Fund for Justice (1985), the Abraham Fund (1989) and Joshua Venture (2002-2005) were established to serve innovative and specialized philanthropic interests. Institutions focusing on hunger, Mazon (1985), international service, American Jewish World Service (1985), literacy ( National Jewish Coalition on Literacy), and outreach and identity, Jewish Outreach Institute (1987) represented other examples of single-issue concerns heavily reflected in this revolutionary model. During this era one can identity as well a wide array of specialized cultural, educational, and Israel-based organizations. One of the more interesting phenomena of this period has been the emergence of specialized membership groupings, such as World Congress of Gay, Lesbian, Bisexual, and Transgender Jews (1985), Jewish Children’s Adoption Network (1990), International Association of Genealogical Societies (1988) and Jewish Genetic Disease Consortium (2000).
A distinguishing feature for many of these new enterprises is that they are operated as primarily “virtual” services or resources, providing specialized information and programs on a global scale. A corollary factor is the growing number of entrepreneurial partnerships between the world of business and communal organizations. Travel agencies working in cooperation with synagogues and other institutions in the promotion of study programs to Eastern Europe, FSU, Spain, and Israel have generated a whole new learning industry. Similarly, the recently created partnership between Office Max and the Union for Reform Judaism provides reduced pricing to participating congregations and their members on a wide array of merchandise, with cash rebates in turn benefiting synagogues.
Placing this Revolution in Context:
This emerging new Jewish model of engagement and giving is drawing heavily upon business and entertainment principles extracted from the very culture in which many of these mega-donors secured their wealth. Just as this generation of new wealth is contributing to the reshaping of American and Jewish philanthropy in the 21st century, their earlier predecessors likewise contributed to the first revolution in American Jewish philanthropy, extracting principles and best practices from the general culture and social norms of an earlier period within American history. “Jewish philanthropists are credited for many innovations including: the matching gift, developed by Jacob Henry Schiff, a leading Jewish philanthropist in the mid-1880’s; and the practice of ‘calling cards,’ an aggressive manner of fundraising…”6
The mega-donors of that era were primarily European Jewish bankers, as represented by the Rothschild family. The late nineteenth century would see the emergence of a Jewish bourgeois class. This element began to assume control over Jewish institutions and in turn sought out the services of the first Jewish professionals to manage the affairs of the community. The “Jewish problem” then centered on the socialization process involving masses of poor Jews seeking to discover their American Jewish identity. “Now we are concerned with affluent Jews seemingly in movement away from Judaism. Then anti-Semitism was a major factor in Jewish life. Now acceptance seems to be our major challenge.”7
When did this revolution begin? This is phenomenon created as a result of several key factors. The first relates to the transfer of significant wealth from one generation to the next. Secondly, during the 1990’s technology boom, scores of young entrepreneurs were successful in acquiring significant wealth. Unlike their parents and grandparents, these new philanthropists tended to adopt a more hands-on approach to giving, which helped to fuel the creation of philanthropic funds and foundations as well as lead to the creation of new community institutional models.
The center piece issues that framed federation’s agenda in building a Jewish national state, in assisting survivors of the Shoah, and in rescuing and resettling Jews residing hostile societies, no longer required the same level of attention and engagement, and in turn many Jews looked elsewhere to pursue personal interests and new institutional and philanthropic priorities.
This revolution also features a different set of social values. While the earlier model sought to combine traditional Jewish organizational practices and communal values along with a 19th century emphasis on American progressivism, this second encounter reflects the themes and values of 21st century globalism and the individualistic impulses associated with Generation Y’ers. Now individuals rather than organizations or governments are the agents of change, empowered by computers, teleconferencing, and production networks, all drawing upon the energy and creativity of people operating as entrepreneurs are recasting and challenging traditional relationships and networks. As Thomas Friedman suggests in his latest book, The World is Flat, A Brief History of the 21st Century that “meaning” today is constructed by the individual, no longer framed by institutions or the general culture. Traditional social and religious boundaries and specific ideologies are seen today as permeable, enabling individuals and groups to integrate previously separated cultural practices and religious rituals into something that provides personal expression for this globalist generation.
In part, these new communal and philanthropic expressions are reflections of a growing new religious phenomenon that was found initially within Christianity and now within American Judaism. “Emergent religious communities” seek to empower their members around “transition, exploration, creativity, challenge, collaboration, faith, danger, and opportunity”.8 In part this alternative religious expression must be understood as a counter-cultural revolution where leaders are committed to the “establishment of transformative sacred communities unbound by conventional expectations about what a synagogue is ‘supposed’ to be”.9
Examining Other Institutional Responses:
To assist both these new financial players and the older families of wealth in defining their agenda, the Jewish Funders Network, as referenced above, has emerged in part as a counter-force to the United Jewish Communities, the umbrella structure of the federation system, and to other established communal and religious institutions in defining and shaping the future communal agenda.10 Yet, what is strikingly significant is a growing body of evidence that suggests while these emerging Jewish power players are increasingly shaping Jewish philanthropy, their real wealth is being directed elsewhere. Gary Tobin writes “…the Americanization of Jewish giving has also included a growing propensity to give to philanthropies outside of the Jewish community. American Jews have become an integral part of the philanthropic mainstream, donating large sums to a variety of institutions and organizations in the realms of education, health, human services, culture, politics, and others.”11
In 1998, there some 3,000 private foundations with a combined value of $6.2 billion that gave to Jewish causes, by 2001 that number had already reached today 5,000 that doesn’t even count the supporting foundations and donor-advised funds that are run by individual Federations and community foundations.12 Over the past number of years, according to Tobin and others, the growth in family and community foundations and the increase in donor-directed giving options continue to accelerate.
Over the past five years, partly in response to this philanthropic revolution, Jewish venture and philanthropic funds have been created by federations in such communities as New York, Los Angeles, Washington, D.C., and Denver. “‘Their appearance reflects a growing demand among donors that charitable organizations become more responsive to their desires’, said Mary Joyce, Gianneschi Professor of Nonprofit Marketing at California State University, Fullerton.” Several additional elements would seem to have contributed to this trend toward directed giving, according to Joyce. In the wake of corporate meltdowns involving Enron, Global Crossing and Arthur Andersen and in reaction to other scandals found within the religious sector and from within government itself, many donors have lost trust in major charities and “‘no longer want to give to generic causes, where they’re not even sure their money is going to be used for something they even support.’”13
“Not surprisingly, a growing number of banks, brokerages and other financial services companies are setting up plans that allow donors to deposit money into special charitable accounts, get a tax deduction and then recommend which charities should receive the money. Even such button-downed firms as Fidelity Investments and Vanguard Group now have so-called donor-advised funds, said Stacy Palmer, editor of the Chronicle of Philanthropy.”14
Unpacking the Mega Donor Revolution:
In their study entitled Mega-Gifts in American Philanthropy (2003), Tobin and his colleagues offer some compelling data on assessing the patterns of giving related to this new class of American Jewish wealth. Of the 502 mega-donors in the United States, according to their study, 123 or nearly 25% of this total category of philanthropists were Jewish. They reported that between 1995 and 2000 this group of funders made a large number of significant gifts in excess of $10 million dollars each, accounting for some $29 million in total contributions. “…Jewish donors made 188 or 21.7% of the 865 total gifts, contributing $5,260,700,000 (18%) of the mega gift dollars.”15 This study also noted the Jewish mega donors directed the bulk of their giving to higher education (49%), followed by arts, culture and humanities (21%), public society benefit (14%), public/primary education (9%), health (6%), and all other categories (1%).16 But of all of these dollars expended, according to Tobin’s initial study, only $318 million — 6 percent — went to Jewish institutions.17
From among the mega-donors, subset of major givers directed significant portions of their wealth to Jewish causes. This group included the Bronfman family foundations; the Richard and Rhoda Goldman Fund, the Koret Foundation, Michael and Judy Steinhardt’s Jewish Life Network, the Charles and Lynn Schusterman Family Foundation and the Wexner Foundation.18
Defining this New Culture of Giving and Engagement:
According to Richard Marker, a philanthropy advisor who teaches at New York University, mega donors are directing their giving to general social and educational needs in light of the general acceptance of Jews within the mainstream of American society. Marker views this phenomenon “‘to some degree … a reflection of a larger societal reality. He further noted: “‘you can view this as a very positive situation… If the only way we look at it is [with] hand wringing, then I think we don’t get the full picture.’” If there is in fact a problem, Marker believes it has more to do with leadership than finances. “I think many of those [donors to secular causes] have not found it as gratifying to become involved in leadership of Jewish causes.”19
He further notes that among younger Jews there appears to be less of an “‘automatic obligation’” to support Jewish activities. “‘The next generation will be supporting Jewish causes that they feel speak directly to their own interests, and that’s the characteristic change of philanthropy, Jewish or otherwise.’” 20 In that age group, he said, donors are “very heavily motivated by personal involvement and the feeling their dollars are making a difference. They’re less committed to general kinds of charitable giving, such as United Way and the federation, [but] it doesn’t mean they’re less generous.”
But mainstream donors reflect the same giving patterns of mega contributors. In the Jewish Community Study of New York (2002), this factor is clearly borne out. 65% of those surveyed indicated that they had made gifts to non-Jewish causes while 58% reported giving to Jewish charities21. These findings confirm that all Jewish donors are more likely to give to general causes than to Jewish ones. While the percentage of giving to Jewish-based charities remains higher among mainstream contributors than mega donors, both groups today are providing more of their resources to generic philanthropic interests than to specifically Jewish institutions.
Gary Tobin suggested that Jewish philanthropy mirrors the state of the Jewish community. Jewish giving is a reflection of the level of security enjoyed by American Jews, and the more integrated Jews feel within this society the greater their propensity to give to generic causes.22 He has also noted that an “Americanization” of Jewish philanthropy has occurred with “Jewish mega-donors spearheading the trend. Tzedukah has been transformed from the religious tradition of Jews to the civil tradition of American giving.”23
Marvin Schotland, President of the Jewish Community Foundation in Los Angeles, identified three characteristics that in his opinion define the behavioral characteristics of this new donor class. He reported that “the wealthy are interested in the big picture. They want to make a difference on a macro level. …The wealthy have no patience with institutional bureaucracy. They abhor inefficiency, lack of cooperation and lack of coordination among organizations. …Finally, the wealthy donate to particular causes with which they identify. This is particularly relevant in reaching younger adults who may not necessarily relate to traditional appeals.”24
Trends in American Jewish Philanthropy:
Commenting on the giving trends of major donors, Jack Wertheimer, Provost of the Jewish Theological Seminary, noted that many of the original benefactors have stipulated that inheritors give a certain percentage to Jewish causes. “Why? They don’t trust their offspring to share their emotional attachment to the Jewish world. But 65 percent to 75 percent of the money donated from Jewish family foundations already is going to non-Jewish causes. ‘You can say that’s their commitment to America in general, but on the other hand it’s a hemorrhaging of dollars to Jewish community,’ Wertheimer said, noting that Jews of past generations gave a greater percentage of their wealth to Jewish causes than today.” 25
“‘In the coming years,’” Wertheimer said, “‘nearly twice as much money is going to Israel outside the UJA/Federation structure rather than through it.’ That’s because large donations are going to hospitals, museums, yeshivot and organizations known as “Friends Of…” as in Friends of Hebrew University.”26
The annual Federation campaigns in the United States over the past decade have averaged about $850 million, but when one adds in contributions to the Federation endowment funds and special campaigns, this total exceeds $1.6 billion annually. Overall, it is estimated that the 159 federations have accumulated some $8 billion in non-campaign assets.27
If one considers contributions being made to religious institutions annually, not including synagogue capital campaigns, an additional $1.4 billion is being raised. In addition, other Jewish charities will probably raise a minimum of $700 million, not including support for Jewish education, a $1 billion economic sector with prospects for continued expansion. Collectively, Jewish philanthropic support is approaching $5 billion dollars.
But while overall Jewish giving is growing, annual donations to Federation-United Jewish Appeal campaigns, when adjusted for inflation, have been on the decline since 1989, if not earlier, along with the number of contributors to these campaigns and the percentage of their charitable giving directed to Jewish causes.
In turn, there is increasing competition for the charitable dollar and for donors’ attention, interest, and time. But possibly more significant has been the “‘rising tide of engaged philanthropy’” where funders seek out ways through their contributions to express their values and realize their goals through their personal engagement.28 Some have suggested that as a result of the emergence of the mega-donor that “‘the communal Jewish agenda in this country is being decided by separate philanthropic entities, rather than by one united federated system.29’”
“…Given the extraordinary growth in contemporary society of myriad forms of individualism,” the special influence and roles played today by the Jewish mega-donors “reverberate throughout the Jewish philanthropic world”.30
Facing New Challenges:
The long term challenges for the new philanthropists are in part summarized in an article by Jeffrey Solomon. In responding to critical social and communal needs, mega-giving can lead to a disjointed response. “As private philanthropy becomes an increasingly powerful force, it must act less like a group of competing candy stores, whether fulfilling the sweet tooths of the benefactors or of favored grantees. Instead, envision a philanthropic landscape where donors, small and large, share information and learning, resources and insights, where challenges are undertaken on a systemic basis, where philanthropic partnerships are the norm and synergy among beneficiaries is the expectation. Serious funders must take the lead in creating an environment of serious reflection, recognizing that the inherent power of the accumulated wealth of the field…suggests a range of questions for consideration…”31
Federations and mainstream charities are seeking to counter some of these trends as well. Jewish Toronto Tomorrow (JTT) initiative represents one such creative approach by the federation world in “trying to capture the imagination of new philanthropists,” according to Ted Sokolsky, President of the UJA Federation of Greater Toronto. This funding proposal involves “the development of three major Jewish “campuses”: the Wolfond Centre for Jewish Campus Life and the Nadal JCC downtown, the Bathurst Jewish Centre/Lipa Green Building complex in the north part of the city, and a new multi-purpose campus in Richmond Hill, scheduled to open in 2006 when its first building, the Community Hebrew Academy of Toronto, is expected to be finished.32” One can now identify across the North American landscape a variety of venture funds and innovative campaign models designed to attract a new and younger donor base as well as to offer traditional federation supporters alternative ways to direct their giving.
Facts, figures and trends demonstrate that the second American Jewish revolution is now underway. Mega-donors both through their investment in Jewish causes and their broad participation within American philanthropy have effectively unleashed a set of institutional and social forces. This transformation is driven in part by how American Jews see themselves as a part of the larger society. As a result, a fundamental reconfiguration of institutional life is taking place in American Jewish life. The impact of this revolution involves a shift from a centralized system of giving and a shared communal agenda to a competitive and individualized marketplace, and in the process unleashed the largest and most innovative growth of new Jewish institutions since the days of the first American Jewish revolution. As donors and others create their own personalized Jewish philanthropic roadmaps and alternative new institutional expressions generated by a new generation of Jewish activists directed at responding to the impulse of the sovereign self.
This is a revolution of both product and process, as religious and communal infrastructures are seeking to be responsive to new economic factors, cultural trends, and social and demographic forces. The challenge ahead involves an understanding of the impact of these external and internal transformational realities on Jewish identity and engagement. As the chart below suggests this revolution is creating a fundamental reconfiguration of the communal model, resulting in the formation of a new American Jewish paradigm.