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JewishJournal.com

January 27, 2005

IDT’s CEO Jonas: Not a Typical Millionaire

http://www.jewishjournal.com/philanthropy/article/idts_ceo_jonas_not_a_typical_millionaire_20050128

 

Don't be alarmed if you visit the Newark headquarters of telecommunications giant IDT, open the coat closet and stumble upon a lanky man in jeans, a wrinkled work shirt and running shoes.

That's just Howard Jonas, the company's 48-year-old founder, chairman and controlling shareholder, the one whose boyish enthusiasm, slightly awkward mannerisms and excitement about the little perks he enjoys as head honcho -- like sushi delivered to his office for lunch every day and the opportunity to get the company swimming pool to himself -- bring to mind Tom Hanks in "Big."

By the way, in addition to running this Forbes 1000 corporation, he is among the world's leading Jewish philanthropists.

Did we mention that while IDT is in the telecommunications, high-tech and entertainment industries, Jonas has no answering machine at home, dislikes and almost never uses a computer and hates television?

That is only the beginning of the many contradictions he embodies.

Jonas is worth hundreds of millions of dollars, yet largely maintains a quiet, middle-class lifestyle, residing in a relatively modest home in Riverdale with his wife and nine children. He flies coach, drives a Ford station wagon, buys used furniture for the office and eschews most luxuries.

Jonas, who was not raised as Orthodox, funds a range of Orthodox causes across the ideological spectrum, and he estimates that 25 percent to 40 percent of the 5,000 employees at IDT are Orthodox.

Yet he sympathizes with the ultra-secular Israeli party, Shinui, particularly its efforts to reduce government subsidies for the ultra-Orthodox. And he lashed out recently at Yeshiva University in a blunt speech, accusing the school of shifting too far to the right.

Entrepreneurial, hard working and visionary, Jonas has started several successful businesses since his first venture opening a hot dog stand as a teenager. Yet he has been all but paralyzed by two major episodes of clinical depression and lives in constant fear that the illness will strike again.

Jonas and his wife give away more than 20 percent of their income to charity, favoring causes that help the impoverished. Yet he is an ardent supporter of President George W. Bush and the Republican Party, whose tax cuts and other policies often are seen as favoring the wealthiest Americans and widening the gap between rich and poor.

In his book, "I'm Not the Boss: I Just Work Here" (Leviathan Press, 2004) Jonas himself acknowledges, "I look at life differently than most people I know."

Quietly, Jonas and his high school sweetheart wife Debbie -- the two graduated from Bronx High School of Science and Harvard University -- have joined the ranks of American Jewry's largest philanthropists.

Between their family foundation and IDT's foundation, they donate approximately $20 million a year, roughly 70 percent to Jewish causes, a whopping sum considering that most wealthy American Jews allocate the vast majority of their charity to secular causes.

But you won't find any buildings or programs named for the couple, and it is only recently that Jonas reluctantly agreed to be honored at fundraising dinners in hopes that it would encourage other people to donate. For Jonas, having something named for him "seems show-offy."

The top five recipients of the Jonas largess are Yeshivat Chovevei Torah, the liberal Orthodox alternative to YU's rabbinical school; SAR Academy High School in Riverdale; the Yatzkan Center a Jewish drug rehabilitation center in Long Island; Columbia-Presbyterian Hospital; and Shaare Zedek Medical Center in Jerusalem.

Jonas also is a JTA board member.

He said he is interested in making a major gift to bring the Jews still in Ethiopia to Israel, and is in discussion with a major outreach yeshiva in Jerusalem to fund a chesder yeshiva, or joint army-yeshiva program.

Jonas and IDT also give to a variety of non-Jewish groups, particularly ones that benefit Latinos.

"We sell a billion dollars worth of products a year to that community, so we have an obligation to give back to them," he said.

In addition to their institutional giving -- the Jonases support scores of causes -- they give to a seemingly limitless number of individuals in crisis, often referred through their rabbi, Avi Weiss, and leaders of other Jewish institutions.

"I'm privy to several things he's given to where there was no publicity attached," said Rabbi Israel "Izzy" Greenberg, executive vice president of Beth Jacob-Beth Miriam School for Girls, which the Jonases have supported for 15 years. "He does it purely for the sake of the mitzvah."

Beth Jacob-Beth Miriam, in the Pelham Parkway section of the Bronx, serves a largely low-income student body. The Jonases are the school's largest benefactor.

Weiss recalls that for six months, the Jonases took in a poor family that was in New York receiving cancer treatment.

"There's always someone there," Weiss said. "The door is always open."

Then there are the people who come to the door. Every night, the Jonas doorbell rings at least once with people asking for help.

Jonas has been giving away 20 percent of his income since he was a teen, and charities he aids describe him and his wife with words like tzadik and saint.

But Jonas doesn't even consider himself a philanthropist.

"When I was driving a delivery truck, no one applied this title 'philanthropist' to me," he said. "I don't think of myself any more as a philanthropist than maybe the person sitting three rows in front of me in shul who's running a sporting goods store."

In fact, Jonas is quick to say, he is far less generous than his wife, who in addition to caring for their children -- they range in age from 23 months to 22 years, and the family has never employed a nanny -- visits sick people, helps parents of disabled children, drives elderly people to doctors' appointments and performs other good-will projects.

"She really cares about individual poor people, individual sick people, people that are suffering," Jonas said, adding, "I wish I was that kind of person. I always make resolutions to go to a nursing home and spend time with people, but I always find something else to do."

Pressed to explain the source of his generosity, this son of an insurance salesman who grew up in the Bronx said, "I always felt this incredible sense of privilege."

"Maybe it was growing up a little after the Holocaust and knowing so many survivors. I really internalized that," Jonas said. "I'm free, I live in a free country and can do whatever I want. It just seemed like the right thing to give back."

Jonas is so generous and widely respected that even his inflammatory comments about Yeshiva University (YU) have aroused little public reaction.

At a dinner for Chovevei Torah, Jonas said in a speech that YU has shifted too far to the right, is "gutless and spineless" and described it as a place "people pay to get into when they can't get in anywhere else."

The speech largely was met with silence, save for a few letters to the editor of Jewish newspapers, an editorial in the YU student newspaper and a paid advertisement placed in the New York Jewish Week by Marvin Schick, an educational consultant.

Despite the apparent Jonas-YU rift, Jonas remains on the Y.U. board and met recently for three hours with YU President Richard Joel. And Debbie Jonas still is co-chairing an upcoming luncheon benefit for the Yeshiva University Women's Organization.

Jonas said he resents the insinuation some have made that he can do whatever he wants because people are intimidated by his wealth.

"I don't put strings on any gift that I give to anyone," he said. "I don't say they have to praise me or can't distance themselves from me. When I give, I just give because the things they're doing are right. This whole implication that I'm only able to say what I say because I'm rich and have bought everyone off -- what a crock!"

Several beneficiaries of the Jonas largess agreed that he is not particularly controlling with his gifts. Even when pressed and promised the opportunity to speak off the record, no beneficiary would speak ill of Jonas.

"There are no strings attached when it comes to any of his beneficiaries," said Greenberg of Beth Jacob-Beth Miriam. "He doesn't get involved in the politics. He just gives based on merit. He's a real tzadik."

In some ways, Jonas' loyalty to the upstart Yeshivat Chovevei Torah parallels his approach to business.

As a small underdog, IDT drew headlines for taking on AT&T.

In his first book, "On A Roll: From Hot Dog Buns to High-Tech Billions," Jonas tells how he built IDT when he was 33, launching the company with a simple idea: cutting long-distance phone costs by rerouting international calls through the United States through something he invented called callback technology.

In the early 1990s, AT&T petitioned the Federal Communications Commission demanding that IDT's callback service be declared illegal and turned off immediately. But Jonas prevailed, thanks in part to connections with the Bush White House.

IDT, once housed in a converted funeral parlor in the Bronx, now is bursting at the seams of its 18-story building in downtown Newark. It has approximately 5,000 employees worldwide (including 1,000 in its Israel office in Jerusalem), annual revenues of $1.8 billion and ranks 746th on the Fortune 1000 list.

In addition to its phone and Internet service, IDT recently launched an entertainment division with digital animation studios and a right-leaning talk radio syndicate.

The Newark headquarters, where yarmulkes and black hats are a common sight, has a uniquely Jewish flavor. The company cafeteria is kosher; according to Jonas, it is one of, if not the largest kosher facility outside of Israel. Multiple Jewish prayer services take place in the building throughout the day.

And IDT hosts two yeshivas. At Yeshiva Bais Tzvi Yaakov: IDT Center for Torah and Business, 39 men ranging in age from 18 to 23 spend mornings studying in the beit midrash and afternoons taking computer or business courses. The Mesivta of North Jersey is a yeshiva high school with approximately 70 boys, who Jonas notes are major consumers of pizza from IDT's dairy snack bar.

Raised as a secular Jew, Jonas was expelled from two Hebrew schools, one Conservative and one Orthodox.

In high school, he grew interested in Orthodoxy, a shift he attributes in his book to his Orthodox grandmother and a search for answers amid the social upheaval of the 1960s and 1970s.

He and Debbie, who also did not grow up Orthodox, became fully observant only when the couple joined the Hebrew Institute of Riverdale synagogue as members shortly after graduating from Harvard.

Deciding to wear a yarmulke was the hardest part for Jonas.

"There's a sort of separation that naturally happens when you are overtly identified as Orthodox," he said. "Your family thinks you're different. Everyone sees you as a religious person."

Jonas does not like to be labeled. He felt self-conscious at a high-powered lunch for Bush supporters, worrying that people were making assumptions about him because of his specially ordered kosher meal.

It didn't help that while the others were enjoying shrimp salad and listening to Bush speak, Jonas was struggling to open the tightly wrapped plastic covering. He was sitting at Bush's table.

"I was trying to take off the tape as quietly as possible," Jonas recalled with a laugh. "Every time I pull it off it's like 'Screech!' " But he said Bush was "a nice guy. He looked over and said, 'Tough to get that kosher food out, huh?'"

That lunch was not Jonas' first meeting with the president. Photos of Jonas with Bush, and one with Vice President Dick Cheney, adorn IDT's executive suite. Jonas is an ardent Republican, and was one of 12 vice chairs of this summer's Republican National Convention in New York City.

A quote from President Reagan: "America is too big for small dreams," graces IDT's entrance. Jonas, who has appeared on Pat Robertson's "700 Club," is friendly with evangelical Christians and said that strengthening ties between Jews and evangelicals is something he would like to support in the future.

Nonetheless, he is married to a liberal Democrat. In 2004 Debbie Jonas said she voted for Bush because he is pro-Israel, but "it's killing me and Howard just gloats."

During the 2000 election, when Jonas "dragged" Debbie to the Republican convention, she went wearing a Gore-Lieberman button.

Despite their different politics, the Jonases say they share the same core values.

"I grew up thinking of Republicans as these evil, uncaring people, but Howard is certainly not uncaring," Debbie said. "He just has a different idea. In every fiber of his body he believes in capitalism and thinks it's best for everyone."

What is perhaps most remarkable about Jonas and IDT is that in the midst of their simultaneous rise to success, he found himself crushed by severe depression. He has suffered two months-long episodes of clinical depression.

One, which he writes about in "I'm Not the Boss," occurred in 1992-93, shortly after IDT was launched. The second bout, which he spoke about in an interview, was in 1998-99.

In the first depression, triggered by the tensions of starting a new company, he would "count the minutes until I could go downtown to see my psychiatrist and cry."

Jonas writes that he regularly contemplated suicide, fantasizing about jumping off the George Washington Bridge. The only thing that stopped him was Debbie telling him she'd never forgive him, and the kids would blame themselves and be scarred forever.

Jonas recovered on a family vacation to Israel, but five years later the depression returned. It all started when Debbie developed a tumor. It turned out to be benign, but in the three weeks

between diagnosis and surgery, Jonas "completely fell apart," his wife said. Even after she recovered, Jonas was still "floundering."

Then a month later, their house burned down. While no one was hurt, Jonas was the only one away from home when it happened. No one had been able to contact him, so he arrived home to see his house engulfed in flames.

This time the depression was even more severe. Jonas stayed at home for weeks at a time and didn't shower.

"I was beyond suicide," he said. "Suicide is sort of an active thing."

Debbie speculated that her husband's proclivity toward depression is rooted in "this kind of underlying security."

"He has this underlying feeling that he's not worthy of what he has and it could all disappear in a heartbeat," she said. "There's like a wounded child in there."

Jonas and his wife live in constant fear that the depression will return.

To prevent it, Jonas employs a range of strategies, including exercising regularly, taking anti-depressants "if I feel it coming on," trying to get enough sleep and staying focused on "the things that are important, like the kids."

"I'm still looking for the silver bullet," he said, although lately Jonas is trying another approach: giving himself a jolt by doing things that frighten him, like giving blood "religiously" -- he's afraid of needles -- and parachuting.

So what was Jonas doing in the IDT coat closet? Taking computerized lessons for his latest project, learning to fly.

Jonas does not like computers. He worries they will suck up his attention for hours, preventing him from interacting with people and doing his other work. He manages to do his work and write his books without computers.

But since the flight lessons had to be done by computer, Jonas installed the machine in the closet, giving himself an incentive to finish up quickly.

In his book, in which Jonas argues passionately for God's existence, Jonas said he is grounded by the awareness that "it could all come to an end tomorrow."

"Life has taught me to recognize that I'm not really in charge," he writes, "that I'm not the One pulling the strings."

 

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