March 31, 2009
Sinking Economy Casts Shadow Over Philanthropists’ Parley
It was a telling moment at the annual conference of the Jewish Funders Network, a gathering of philanthropists who give away at least $25,000 per year to Jewish causes and, in most cases much, much more.
Harold Grinspoon and his wife, Diane Troderman, who have donated tens of millions of dollars to Jewish and non-Jewish causes over the past two decades, had just received JFN’s Sidney Shapiro Tzedakah Award. For Grinspoon and Troderman, it amounted to a lifetime achievement award, recognizing the huge sums of money allocated by the Harold Grinspoon Foundation to dozens of programs and organizations.
But with her husband flanking her at the Vinoy Hotel here as they accepted the award, Troderman announced that they would be scaling back. Going forward, she said, the couple would concentrate most of their philanthropic efforts on their signature program, the PJ Library, a Jewish literacy program that helps distribute Jewish books to young children and their families.
Most of the rest of their money, Troderman said, would not be given away until after their deaths.
“We are really thinking about legacy,” she said, invoking the term used in the philanthropy world to describe bequests.
Officials at the foundation declined to discuss details but, according to several sources, Grinspoon has been hit hard by the recession.
For many of those in attendance, it was a sobering image: The Grinspoons, longtime pillars of the Jewish philanthropic world—right up there with the Bronfmans, Schustermans and Steinhardts—standing before the creme de la creme of Jewish givers, being honored for what they had done in the past, tacitly acknowledging that the present was not that bright and making clear that in the future they would have to be more strategic.
To boot, the event’s keynote speaker, noted Holocaust writer and Nobel laureate Elie Wiesel, had most of his personal and charitable wealth stolen by Bernard Madoff in his Ponzi scheme.
They are not alone. Foundations have lost on average 30 percent of their money during the recession and, according to the JFN’s president, Mark Charendoff, family foundations could end up cutting their grants by up to 60 percent.
It showed at the JFN conference, where wallets were lighter and attendance was down to 220 from last year’s 350.
In years past, the parley has been one where funders and their entourages of foundation staff gather gleefully and congratulate each others’ philanthropic victories while playing a game of charitable one-upsmanship, and where casual meetings in hotel suites and fine restaurants often lead to multimillion-dollar partnerships to fund grand Jewish projects.
Along those lines, the official focus of the conference was on funding Jewish innovation and giving money to Jewish nonprofit start-ups, with the catch phrase being “social entrepreneur.”
But this year, according to the heads of several large foundations, the backroom dealings focused less on how to create new bold and broad initiatives, and more on how to form strategic funding partnerships to maintain existing programs.
“I basically heard from people a few different reactions: I don’t want to hear the word new project for a year, which I heard from a lot of people, to quite a few people who said to me I can make it through 2009 in terms of my obligations, but there is no way I can keep up this level of giving in 2010 and have no idea what the nonprofits that count on me are going to do,” Charendoff said. “Many people are just struggling with what they ought to do more than what they can do.”
Just as the Obama administration continues to struggle with the question of how to unlock the credit markets, funders roamed the halls at the JFN conference trying to figure out how to jump-start a Jewish philanthropic world that has been stabbed in the back by the collapse of world markets, only to have the dagger twisted by Madoff’s bilking of hundreds of millions of Jewish charitable dollars.
A recurring question was whether the flow of philanthropic dollars has slowed because there is no money left to give or because, even though they are still wealthier than 99 percent of the country, the biggest givers have seen their stockpiles dwindle and now feel financially strapped.
Officials at the Milwaukee-based Helen Bader Foundation announced at the conference that they would probably not be giving any more money away this year, even though the foundation has more money now than when it was started with $90 million in 1991.
“You have people who are coming to terms with the shock. This is right after the cold water has been spilled,” said Joe Kanfer, the chairman of the United Jewish Communities and CEO of GOJO Industries, the maker of Purell hand cleanser, during an interview in an empty conference room between sessions.
Despite the anxiety, he said, “There is still plenty of capacity.”
One mega foundation—the Jim Joseph Foundation, worth about $800 million—tried to inspire others to step forward by announcing just before the conference that it had made an $11 million emergency gift to help five communities deal with the high cost of Jewish education. But sources with intimate knowledge of Jim Joseph said they sensed from the foundation a frustration at the “lack of urgency” at the conference and only limited progress in getting other large foundations moving.
Some attendees, like Steven Lear, a financial adviser from Minneapolis who gives tens of thousands of dollars per year to his local federation, synagogue, camps and Jewish advocacy groups, said they would try to maintain their level of giving even though their businesses have been hurt.
“I decided I wasn’t going to cut, that I would work longer. I’ll work until I am 80,” said Lear, 52, who has decided to donate 10 percent of his post-tax income, no matter what. “You don’t go to zero. For me, going to zero is like giving up.”
Kanfer tried to sum up the situation with an old Chasidic story: Two brothers, good in business, both make a lot of money. Hard times hit their community. One spends all he has trying to help others and quickly ends up impoverished. The other squirrels away all his money and helps no one, not even his brother.
A rebbe asks each of them why they have behaved so.
The first says, “There is so much to do now, and who knows how long I will live? I am afraid I won’t be able to help those in need.”
The second says, “I am afraid to be very old and to be left with nothing.”
The rabbi’s blessing to both, according to Kanfer: “I hope you are both spared your fears.”