October 18, 2007
Welcome to the new world of do-it-yourself Jewish philanthropy
Last year, E. Randol Schoenberg came into a lot of money. The young lawyer is discreet about how much, but after obtaining the return of Nazi-seized paintings valued at about $300 million, Schoenberg's portion of the windfall was enough to transform his life overnight.
Not quite 40, he was already on the boards of the Los Angeles Museum of the Holocaust, the L.A. Jewish Symphony and a few organizations. But now he had the means to be a more significant philanthropist.
Instead of giving a couple million to The Jewish Federation of Greater Los Angeles and letting its officials figure out how to allocate the funds, Schoenberg wanted control over who would get his money and for what. So he asked Chuck -- Charles Schwab that is -- which helped him open a donor-advised account. It's like a personal foundation, with all the immediate tax benefits of unloading a large amount of cash but without the overhead. And it's a lot more limber.
"At 11 o'clock at night, I go online, I check the funds, see that the stock did better than I thought -- OK, I'll give a few thousand dollars to XYZ charity," Schoenberg said. "If I've given to that charity before, all I've got to do is click a few buttons and boom, it's done."
Welcome to the new world of Jewish philanthropy. It's a do-it-yourself, give-to-whom-you-wanna-give world, a place where serious philanthropists choose meaningful charities like stockbrokers pick winning businesses.
"Donors follow their passions. If they are going to give any dollars that are significant, ultimately they are going to do it because it moves them in their head and in their heart and in their gut," said Marvin I. Schotland, president and CEO of the Jewish Community Foundation, a Federation beneficiary that manages 1,200 funds for people who want to remain involved in allocating their charity. "Today, donors' passions are much broader then they used to be, and they are very much interested in becoming actively and intimately involved. Writing a check isn't enough."
No longer are those passions limited to organizations with "Jewish" or "Israel" in their names. Blame it on assimilation or credit it to integration, but Jews are among not only the highest-earning Americans, but the most generous to all causes. A 2003 study by researcher Gary A. Tobin found that between 1995 and 2000, only 6 percent of the money given away by Jewish megadonors -- $318 million of $5.3 billion -- went to Jewish causes.
Last year, four of America's five biggest donors were Jewish. (Not exactly household names, they were Herbert Sandler, Bernard Osher, the late Jim Joseph and Leon Levy, in addition to Warren Buffet, according to The Chronicle of Philanthropy.) Each committed or donated $500 million or more, trailing only Buffet's $43.5 billion pledge, but most of their money was divided among non-Jewish causes.
Ronald Stanton's $100 million gift to Yeshiva University (No. 18) was the only super-megagift ($100 million or more) to a Jewish organization, even though nine of the top 16 donors were Jewish, and Tobin estimated at least 50 Jews could have matched or exceeded Stanton's generosity.
"Not only have Jews prospered economically, they now are able to prosper socially and politically and participate in every aspect of American society. All of that is positive. The question becomes: How do Jewish organizations and causes effectively compete in that environment?" said Tobin, president of the Institute for Jewish & Community Research in San Francisco. "Jewish organizations can no longer rely on the isolation of Jews from American society or the loyalty of Jews without helping them to participate and be loyal to Jewish causes. Jewish causes and organizations have to work harder than they ever have before."
Historically, Jewish federations have been juggernauts at raising money during times of crisis: Israel's wars of 1948, 1967 and 1973; Soviet and Iranian refugees in the late '70s and '80s; Ethiopian Jews in 1985; and fighting Hezbollah last summer. But when an imminent threat is at most existential, like say Iran's nuclear ambitions, what then?
"Fundraising built only on moments of intense giving, built on a cause or crisis, has a point when it can collapse," said Steven Windmueller, dean of the L.A. campus of Hebrew Union College-Jewish Institute of Religion.
Curing local suffering has been the heart of The Federation's annual campaign. Directed at general operations and community support, the fundraising slipped below $40 million in 1993 and didn't climb back above until 1999. At $47.3 million in 2005 it appears nearly unchanged from 1990's $46.4 million, but when accounting for inflation, today's numbers are $22 million short of what they were 15 years ago.
A city notoriously considered stingy by fundraisers, L.A.'s philanthropic ambivalence, save for that of Eli Broad, David Geffen and a few others who make a large impact, only makes today's Federation task more challenging. In Chicago, where the Jewish community is famously unified under the United Jewish Fund/Jewish Federation of Metropolitan Chicago, the 270,000-member community raised $74.9 million in 2005 -- more than three times as much as Los Angeles per capita.
"It is very challenging here in L.A., where people are not only entrepreneurial -- which is a good thing -- but they tend to be very individualistic in how they take on their charity or tzedakah," Federation President John Fishel said. "That is a reality that we are responding to and will continue to respond to."
Fishel and his team have done so in recent years by adding "venture-philanthropy" funds, which are similar to Schoenberg's donor-advised fund at Charles Schwab and the Jewish Community Foundation's personal accounts. The Federation also created the Real Estate Construction RPO, which seeks donors who want to get involved with specific building projects, and Premiere Philanthropy, which has raised $14 million over the past three years from wealthy donors wanting to support specific programs for indigent Holocaust survivors or to address hunger in the community or utilize solar energy. The incoming chair of The Federation, Stanley P. Gold, has indicated he wants to continue the trend toward more directed-giving.
The decline in general fundraising is not a malady unique to The Federation. It is the new burden of both sectarian and secular umbrella charities, from the United Jewish Communities to the United Way.
"With today's donors, it is more of a business transaction," said Stacy Palmer, editor of The Chronicle of Philanthropy. "They want to know they are getting the most out of it."
East Los Angeles is at least two freeway interchanges and several generations removed from today's L.A. Jewry. But there the community's early history rests eternally, amid well-worn bungalows, rusted chain-link fences and canopy-free, sun-bleached streets.
Head north on Downey Street across Interstate 5, and you'll immediately be greeted by the tattered and peeling black-and-white sign of Beth Israel Cemetery, where hundreds of Jews have been buried during the past century and continue to be. Half a block north is Agudath Achim Cemetery, which similarly is operated by Chevra Kadisha Mortuary. Neither is regal or elaborate, mostly concrete crypts stacked side-by-side, only loose dirt for landscaping.
But between the two cemeteries is a more forgotten home. The wrought-iron gate, pinned shut with two Master locks, simply says "Mt Z." Inside is Mount Zion Cemetery, rows upon rows of headstones baring menorahs and the Star of David, Feldmans and Ungers and Goldbergs and Rosens and Nefts and Pearlmans and Schwartzes and Raskins and Segelmans. Some of the crypts are tagged with graffiti, others simply cracked. It's not maintained by a mortuary but by The Federation or, in essence, the whole Jewish community. It looks peaceful now, but throughout the years, the graveyard hasn't always fared well.
"Jewish law commands that people honor the deceased," a 1995 New York Times story began, "but the weeds thriving at Mount Zion Cemetery appear to have deeper roots than the local Jewish community, which long ago moved out of the neighborhood and stopped tending the graves."
Another commandment of Jewish law is tzedakah. Loosely translated as charity, it really means working for justice in a world gone wrong, a cousin of tikkun olam (repair the world). The religious expectation is that Jews will give at least 10 percent of their wealth to the needy, a value apparent in the history of Los Angeles Jews.
In 1854, only 13 years after the first Jew is believed to have stopped in the region, the Hebrew Benevolent Society was established to provide free burials for the poor. (Now known as Jewish Family Service, that legacy is apparent at the Freda Mohr Multipurpose Senior Center on Fairfax Avenue, in the food delivery program for the homebound and the Gramercy Place Shelter for families trying to get off the street -- programs not limited to Jews.) Other organizations, like The Federation, were created by Jews who sought to give substance and stature to a community once largely excluded from the society created here by Protestant Midwesterners.
"Jewish philanthropy was not only a matter of helping people in need, but the activity itself was a way of doing Jewish, an act of creating or fostering Jewish life," said David Kaufman, a professor of American Jewish history at HUC-JIR. "The Federation movement, which peaked through the '20s, '30s and '40s, was not only functional, but it was also a matter of structuring the Jewish community, of giving polity ... almost as a substitute, as a surrogate, for Jewish religion. As secularism has declined and religiosity has come back, that need has also declined."
Which leaves Jewish organizations like The Federation in the position where they need to reinvent themselves -- or at least the way they connect with their patrons -- or risk fading into obsolescence.
"The old game of guilt, obligation, and intimidation," Tobin said, "won't work any more."