November 30, 2006
Family foundations pave new philanthropic path
No more. As Jews have become more integrated and assimilated into American society, they no longer automatically pony up to Jewish charities. Instead, they are as likely to give to an environmental cause or AIDS hospice as to a federation, which some Jewish donors characterize as overly bureaucratic and distant.
Mark Charendoff has a bird's-eye view of this monumental shift in Jewish giving. The president of Jewish Funders Network, a 15-year-old organization representing Jewish family foundation and independent donors, says Jewish philanthropists want more control over how their charitable dollars are spent and increasingly turn to outfits like his for guidance. Over the past 20 years, the number of Jewish family foundations has roughly tripled to 9,000, according to Charendoff.
Those foundations now have an estimated $30 billion in total assets -- and growing.
Jewish Journal: What accounts for the surging popularity of Jewish family foundations?
Mark Charendoff: There is a desire by donors to follow their money -- to invest directly in projects where one can see an impact and track results. Donors feel better capable of making decisions about exactly where their money's going and what they want to accomplish. Secondly, philanthropy used to be something that people thought more about later in life, after they conquered the business world. Now, people are thinking about philanthropy, about making an impact, at a much younger age. We speak to people in their 20s and 30s who are starting foundations or starting to think more seriously about their philanthropic impact every day.
JJ: Do you expect the number of Jewish family foundations to increase, both in numbers and total assets, as wealth is transferred from aging philanthropists to their children?
MC: First of all, just the scale of money being transferred is enormous. Many parents are beginning to set up foundations as a way of training their children in a culture of giving or as an excuse to discuss the values that are most dear to them. When done right, foundations can prompt an intergenerational dialogue that would not have otherwise occurred about values and legacy.
JJ: Is it true that younger donors are less likely to give to traditional Jewish causes than their parents and grandparents?
MC: I think what has changed is the automatic nature of giving. By that I mean in previous generations there was an automatic presumption that a certain percentage of your charitable dollars would go to the Jewish community. There were a number of reasons for this. One was a loyalty and sense of obligation -- a sense of citizenship -- that one felt toward the Jewish community. Another was the lack of opportunity to be involved at the leadership level in many non-Jewish causes. Both of those reasons have eroded over time.
Many younger Jews today don't feel an automatic loyalty to the Jewish community, at the expense of other communities that they may be involved in. Whereas I may see the Jewish community as my community others may consider themselves part of 20 different communities -- an environmental group, a book club, a biking group, etc. The sense that the Jewish community would be entitled to a certain percent of my charitable dollars is not a presumption that younger people typically buy into. And the competition for Jewish dollars, and for Jewish involvement, is fierce and is no longer in limited to Jewish not-for-profits. The hospital, the symphony, the gallery, the university and the social action group in your local community are as eager to attract young affluent Jews as is the local federation, Anti-Defamation League, American Jewish Committee or others.
JJ: In general, are Jewish family foundations more likely than traditional Jewish philanthropies to fund non-Jewish causes?
MC: There are those that spend 90 percent of their money on Jewish causes and those who spend less than 10 percent on Jewish causes.
JJ: How have federations responded to the rise of Jewish family foundations?
MC: It's very hard to group all federations together. There are federations in the United States and in Canada that have developed strong and productive working relationships with local and national foundations. They are exceptionally good partners. When federations view themselves as prospective partners, willing to work with other funders to pursue a mutually agreed upon goal we see good results. If the federation can only imagine itself as being in the business of the annual campaign, they will run at odds with many foundations and, I believe, they are running at odds with the evolution of philanthropy in this country.
JJ: What do federations and other Jewish philanthropic nonprofits need to do to grow their donor base?
MC: Again, it depends on the federation. Last year, our international conference was held in Denver. Philanthropists from around the world attended. [Los Angeles] Federation President John Fishel came as a participant. He wasn't there to speak at a plenary or at a workshop. He was just there as a participant, to learn from the others, to share insights and most of all to listen. That very silence spoke volumes to the foundations that were in attendance. If federations are willing to listen more, to sit at the table as equal partners instead of insisting that they are the central address, I believe they will find a foundation community that is far more receptive to cooperation.
JJ: Going forward, do you see federations or Jewish family foundations continuing to grow?
MC: I think family foundations will continue to grow at a rapid pace, partly because of the transfer of wealth that we're beginning to see and partly because of the increased privatization of American life. This is not a Jewish phenomenon but an American phenomenon. Americans are more and more convinced that the private sector and the entrepreneurial spirit will solve problems. They don't trust bureaucracies. Those same entrepreneurs who have graced the covers of Forbes and Fortune are now turning their energy, creativity and resources to philanthropy. In doing so they have become a sexy story in American life. From Bill Gates and Warren Buffett to the Google guys and Jeff Skoll, these entrepreneurial philanthropists have emerged as heroes in this country.