Philanthropy and the “Jewish Continuity Crisis”

In a 2016 episode of the Comedy Central sitcom Broad City, costars Abbi and Ilana go on an “all-expense-paid trip to Israel” called “Birthmarc.” On the plane, the two find themselves surrounded by the archetypes of their milieu: Ivy League–educated, nationalist, and horny young Jews, all wearing blue T-shirts featuring a Star of David, all ready to get married, right now, on the plane. The satire of the very real program Taglit-Birthright Israel mocks American Jews’ classism and natalism, as well as an economic culture that promotes Jewish endogamy—or Jews marrying Jews. A young man named Mark runs to the front of the plane and tells his fellow participants, “I’m proudly gay—mazel—but I’m looking for a nice Jewish girl to marry … because that’s the only way I can gain access to my trust fund.” Their trip leader, Jared, wears a knitted blue-and-white kippa and arranges seating assignments according to participants’ “match potential” (i.e., their likelihood to tie the knot). Eventually, he comes clean to Ilana about why he is so desperate for the young Jews to pair up: he gets a commission for every “match” made on the trip, with a double commission if he can provide proof of a hookup before the plane lands.

Viewers laugh because the episode exaggerates a familiar link between free Jewish programs, Jewish marriage and reproduction, and concentrated wealth. In the world outside the show, these familiar tropes are more commonly presented as hot-button Jewish issues, none more familiar than Jewish communal leaders’ and commentators’ moral panic over interfaith marriages, which these same commentators have called a Jewish “continuity crisis.” Like white panic over urban crime rates, Christian opposition to gay rights, or conservative allegations that Aid to Families with Dependent Children encourages single motherhood, the Jewish continuity crisis emerged in the 1960s amid intensifying economic anxiety and attendant concerns about the decline of the nuclear family. Sexual liberalism, weak morals, low fertility, birth-control use, and, worst of all, intermarriage would lead—Jewish communal leaders feared—to the disintegration of the Jewish peoples.

Certainly, Jewish communal leaders have worried about intermarriage throughout American Jewish history. But opposition to intermarriage became, in the words of historian Lila Corwin Berman, Jews’ “postwar communal obsession.” And to match their all-consuming passion, Jewish leaders developed techniques to make sure their coffers would always be stocked in the fight against intermarriage.

The so-called Jewish continuity crisis reached disaster proportions in the 1990s, when philanthropy-funded studies revealed that 52 percent of American Jews married non-Jewish partners. In 1999, Jewish leaders responded to this sense of crisis by fusing Zionism and Jewish endogamy in the form of Birthright. At its launch, Birthright was funded with $210 million raised from American Jewish community federations, the Israeli government, hedge-fund manager Michael Steinhardt, and Seagram liquor heir Charles Bronfman.

Starting in 2005, Birthright’s fundraising materials pointed to statistics compiled through the Steinhardt-funded Social Research Institute at Brandeis University. The data showed that Birthright participants married non-Jews less frequently than the general American Jewish population did. Successful promotion of Jewish endogamy went hand in hand with successful fundraising.

Birthright is undeniably ubiquitous in the Jewish world: it has provided free trips for over 700,000 Jews since its founding and generated revenues of $121 million and $99 million in 2018 and 2019, respectively. This reach has only been possible because of the US political economy, which allows Jewish philanthropies to accumulate capital indefinitely, assisted by massive American government subsidies, all in the name of the public’s interest.

Birthright’s product— “Jewish continuity”—encourages this economic arrangement. In the hands of multibillion-dollar nonprofit entities, “Jewish continuity” sanctions a political order in which nuclear families, wealth, and privately controlled communal institutions, rather than the government, provide a social safety net.

In her far-reaching new book, The American Jewish Philanthropic Complex: The History of a Multibillion-Dollar Institution, Berman, the Murray Friedman Chair of American Jewish History at Temple University, covers over 150 years of Jewish philanthropy in the US, as well as the government policies and financial practices that shaped them. Her book is the first comprehensive history of the subject. Berman does not provide a triumphant tale of Jewish generosity, solidarity, and uplift, but rather an ambivalent story about the evolution of one ethnic-religious community’s institutions under American neoliberalism.

The “American Jewish philanthropic complex,” Berman explains, was born out of the convergence of market-friendly government policies, the financial sector’s growth, and Jewish leaders’ belief that Jewish security and continuity could only be guaranteed through perpetual capital accumulation. The values driving Jewish institutions have been marked by philanthropy’s entanglement with American capitalism.

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Gradually and hesitantly, in the first decades of the 20th century, Jewish communal leaders allowed their organizations to amass capital. Like many progressives of the era, leaders of local Jewish federations—associations of nonsynagogical welfare and cultural institutions—understood their function as providing for the immediate material needs of poor and needy Jews. They did not want to indefinitely hoard money in trusts like Gilded Age robber barons. Federation bylaws, in fact, contained regulations against precisely such trusts; they set limits on the amount of money that could be held back from circulation and required that fundraised money be spent down annually, following a model of immediate distribution.

But in New York City in the early 1920s, the local federation amended its bylaws. The new bylaws allowed the federation to receive an initial $500,000 bequest (about $7.5 million today) from banker Jacob Schiff, followed up by another $500,000 in donated securities from his son-in-law and fellow banker, Felix Warburg. Such successively large gifts pushed federations to loosen their regulations against trusts and to normalize the buildup of charitable assets.

A century later, Jewish philanthropy—like all philanthropy—is big business. Most charitable capital is held back from annual circulation; donations of a couple million dollars likely do not spark heated debates in Jewish federation boardrooms, nor changes to the bylaws.

In total, between 2000 and 2015, $46.3 billion were held by 1,235 different Jewish funding organizations. These include federations, Jewish schools, advocacy groups, and social-service organizations, and do not include synagogues and religious institutions. This figure is probably a low estimate, as researchers only counted grants of over $500,000.

While most religious groups have preached inmarriage to some degree among their followers, in the 1960s American Jews adopted endogamy as a particularly vital and urgent communal family value.

Reporter Josh Nathan-Kazis called this concentration of wealth “a tax-exempt Jewish communal apparatus that operates on the scale of a Fortune 500 company.”¹ That’s true: the 70th and 71st most profitable companies in the US, American Airlines and Charter Communications (which runs Spectrum and Time Warner), both had revenues of $45.7 billion in 2020. The $46.3 billion held by Jewish funding organizations is a few billions more than Harvard University’s endowment of $40 billion, but less than the current net worth of Michael Bloomberg ($54.9 billion).

What enabled this massive concentration of capital? Why did so many Jewish organizations switch from prioritizing immediate distribution to indefinite financial growth? In part, Berman explains, communal wealth accumulation reflected both the changing economic makeup of American Jewry and new government social policies.

Many early 20th-century Jewish organizations sought to meet the health and economic needs of Jewish immigrants, who constituted almost a 10th of the 30 million immigrants to the US between 1880 and 1920. These Jewish charities—orphanages and hospitals, interest-free-loan associations, educational institutions, and settlement houses—provided relief for the recently arrived working-class, highly urbanized Jewish immigrants.

But thanks to social and economic reforms passed between the New Deal and the Great Society, Jewish Americans’ average income and wealth rose, as government programs provided employment assistance, loan guarantees, education stipends, and social insurance. The government’s midcentury social policies, then, decreased the pressure on Jewish organizations to provide these services themselves.

The mixed economy of public-private partnerships also altered philanthropic priorities. Before the creation of Medicare and Medicaid in 1965, for example, federations spent the largest share of their funds on hospitals and medical services. But as federal spending on social services exploded in the late ’60s, so did the portion of charities’ budgets that came from public funds. The New York federation in the ’50s and ’60s, facing what political scientist Matt Berman calls “financial insecurity, bordering on crisis,” remained solvent by relying on government funding. With their medical and social-services programs partially covered by the state, Jewish institutions could shift their focus. Instead of health care and housing, they turned to culture and education. While the New York federation, in the 1950s, spent 30 percent of its expenditures on health and human services, by 1971 it spent only 5 percent on these categories.

As Jewish philanthropies increased their investments in cultural and educational programming in the postwar decades, they also began using new financial instruments. In the postwar years, Jewish federations accepted larger gifts such as cash, property, or bonds and held them in endowments, which were investment funds generating profit from interest by not spending down any of the original gift or principal. Federations’ nearly simultaneous shifts toward endowments and toward cultural-funding priorities is one of Berman’s key historical insights in The American Jewish Philanthropic Complex.

In the 1940s, as American Jews reckoned with the genocide of European Jewry, endowment building promised long-term communal financial sustainability. In 1943, during the height of the Nazis’ systematic mass murder of Jews, the New York federation set up a special reserve, or rainy-day fund, for the first time, to prepare for any upcoming emergency. New York federation chair Norman Goetz called these reserve funds “sacred.” A different federation director in Boston called American Jews’ fundraised dollars their weapons in a “battle for survival.”

The violent destruction of the demographic center of Jewish life, Berman writes, led American Jewish leaders to “understand how much of the Jewish future now rested in their hands.” In a period of American prosperity and abundance, American Jews felt a solemn responsibility to prepare for a possible future of scarcity and communal devastation. The meaning of Jewish survival and continuity was quite literal for American Jewry in the face of the systematic murder of their families, relatives, friends, hometown residents, and coreligionists. Jewish philanthropies embraced endowments in the aftermath of genocide under the belief that only perpetual capital growth could ensure Jewish perdurance.

As Jewish philanthropies increased their investments in cultural and educational programming in the postwar decades, they also began using new financial instruments.

As early adopters of endowments, Jewish philanthropies actively embraced the growth of the financial sector. In doing so, they tied the fate of Jewish communal institutions to their investments, to the stock market, and to the expertise and skill of financial professionals.

Of course, Jewish leaders were not unique in embracing financialization; they allied with United Way, universities, and Catholic Charities to protect their financial interests and subsidies. The evangelical National Christian Foundation followed a similar path. Decades before free-market crusaders led the White House, philanthropies promoted their own dependence on the market.

But Jewish leaders did draw on particular Jewish narratives to justify their transition from a policy of immediate distribution to one of capital growth, narratives that Berman skillfully explicates. Indeed, financialization and “Jewish identity” discourse, as Berman asserts, must be understood as interlinked phenomena.

When communal leaders evoked Jewish continuity and a strong Jewish identity to justify endowment building, charitable-tax exemptions, and hiring financial consultants, they were linking identity politics to the process of financialization. By the late 1960s, both young Jewish activists and Jewish communal leaders embraced the ethos of capital accumulation in the service of Jewish continuity.

In the 1960s, Jewish organizational leaders advocated for government policies that would increase profits on their investments and maximize donors’ control over their gifts. Federations lobbied Congress before the passage of tax reforms, following the lead of Norman Sugarman, a Cleveland-based tax lawyer and a central figure in Berman’s work. Their goal was to allow gifts of appreciated property, private foundations, and community foundations (later known as donor-advised funds, or DAFs) to be classified as “public charities” for tax purposes, so long as they were administered by actual public charities. Such a classification would provide financial incentives for potential donors to set up their funds inside Jewish federations. This would allow federations to compete with proliferating private Jewish charitable foundations, which operated outside federation control.

Charitable classification was such a high priority for federations that, in an assembly convened before the passage of the 1969 Tax Reform Act, they resolved to redouble their tax-lobbying efforts. In the process, the federations aligned themselves with supporters of welfare retrenchment and deregulation. DAFs in particular epitomized the spirit of privatization. According to Sugarman, DAFs “should be encouraged to be a model for involvement of the private sector in the community as an alternate and supplement to governmental programs.” Federations’ appeals were successful: the 1969 Tax Reform Act, and later statements by Congress and Treasury, did allow DAFs to be classified as public charities, as Sugarman had envisioned.

Even as the 1969 Act imposed limitations and regulations on private foundations, this reclassification paved the way for public philanthropies’ oligarchic structure. Through such political lobbying activities, Jewish organizational leaders pursued privatization and deregulation regardless of their personal politics. The Jewish American philanthropic complex, Berman writes, “affirmed and enacted the structure of late-twentieth-century American political economy, in its inequality and its support of private forms of power over public goods and processes.”

Presumably nonpolitical philanthropies exemplify the adoption of market-based solutions to social issues. Though the book sheds light on the little-studied Republican Jewish Coalition and Jewish Republican Party insiders, Berman’s actors do not fit into any clear-cut partisan alignments. In telling the story of government and communal institutions outside the frame of party politics and polarization, The American Jewish Philanthropic Complex is a valuable contribution to recent historians’ debates on the policies and agendas that, since the 1960s, have united Democrats and Republicans, liberals and conservatives.

Following the passage of the 1969 Tax Reform Act, federations, DAFs, and endowments grew especially quickly. Between 1975 and 1977 alone, federations’ holdings in endowments almost doubled, to a total of $276 million. To administer and grow their donor-advised funds (DFAs) and the “ballooning endowments” that housed them, federations set up a supporting infrastructure. They opened investment working groups, hired outside financial advisers, and held workshops and seminars for potential donors on the benefits they would receive by moving their funds to federation auspices. By the early 1980s, according to Berman, “federations were slowly transforming themselves into financial-service providers for privately controlled philanthropic capital.”

Individual donations to Jewish organizations have steadily declined since the 1980s. And yet, despite the decline in individual giving, the monetary value of Jewish philanthropic capital as a whole has increased dramatically. Most Jewish federations’ profits are derived from interests on assets held in endowments, not from individual donations received through annual campaigns. The value of Jewish philanthropic capital has also increased due to the growing number of private Jewish foundations, which have challenged federations’ place as the undisputed mangers of institutional Jewish life. From the mid-’90s to the early aughts, the number of Jewish private family foundations exploded from 3,000 to 10,000. In this way, even as federations continue to compete with private foundations, endowments did have their desired effect of ensuring financial longevity: today, as long as Jewish institutions do not spend down their principal, they can weather any storm.

But this financial security came at a cost. Endowments tied the vitality of communal institutions to monetary returns on investments. DAFs empowered wealthy individuals’ private control of funds that were ostensibly meant to serve the public good, as the proponents of financialized philanthropy aligned with a neoliberal political vision. “The promise of philanthropy,” Berman argues, “legitimated the state’s contraction of its social welfare responsibilities. In its financial structure, underwritten by the state yet free to move through the market to accumulate and grow capital, philanthropy [exemplified] the logic of meeting public scarcity with private enrichment.”

The values driving Jewish institutions have been marked by philanthropy’s entanglement with American capitalism.

The American Jewish Philanthropic Complex highlights the financial practices that accompany the discourse of “Jewish continuity.” Berman has written widely about Jewish leaders’ and academics’ perception of a “continuity crisis,” including their intermarriage panic, in her public and academic work.² In this book, however, she gives less attention to the gendered meanings of “Jewish continuity,” as she notes in the introduction.

But the financial and reproductive meanings of Jewish continuity are not separate; social, economic, and political issues are seldom so neatly disentangled. Jewish continuity is a dictate aimed to structure both Jewish reproduction (endogamy) and financial activity (endowment building, tax exemptions, deregulation.) In the logic of the American Jewish philanthropic complex, Jewish continuity requires both durable capital reserves and continuous Jewish heterosexual reproduction. The supposed crisis in Jewish continuity—suggesting a failure in exponential financial growth or a failure in social reproduction—is just the Jewish name for the “crisis of care,” a crisis endemic to financialized capitalism as a whole.

As many Christian Americans turned to “family values” to alleviate their economic anxieties in the 1960s, Jewish organizations offered “Jewish continuity” as their own solution to the supposed decline of the American family. Jewish organizations would ensure communal survival by transmitting “Jewish values” through trips to Israel and attendance at day schools, summer camps, or after-school youth-enrichment programs. All that was required for this model to succeed was a stable Jewish household—with two young, fertile, heterosexual Jewish parents—and enough disposable income to spend money on Jewish education.

While most religious groups have preached inmarriage to some degree among their followers, in the 1960s American Jews adopted endogamy as a particularly vital and urgent communal family value. There were many other strategies for controlling reproduction at the time: means-testing, for example, or opposing interracial marriages, homosexuality, birth control use, or abortion. But Jewish leaders, who supported integration and accepted gender equality, birth control, and gay rights, favored endogamy as their answer to the 1960s crisis of the family.

Translating these visions of Jewish family structure required an equally ambitious vision of the political economy. Advocates for “family values” positioned the heterosexual nuclear family as the main source of social stability amid volatile market forces. In their ideal society, the nuclear family, rather than a welfare state or robust public services, would provide a safety net. In parallel to family values, Jewish continuity discourse stressed the important role of privately controlled communal institutions, as opposed to the nuclear family, in providing this safety net.

But, as Berman has argued elsewhere, the imperative of communal child-rearing did not push American Jews in the last decades of the 20th century to support an expanded welfare state. Instead, the Jewish continuity agenda increased communal institutions’ investment in privately controlled social programs. “By the closing decades of the twentieth century,” Berman writes, “the logic of philanthropy refuted that of the welfare state, creating a zero-sum game.”

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American Jews have long understood their history and civic engagement via their relationship to philanthropies. Since the beginning of the 20th century, charitable giving and communal associations facilitated participation in Jewish life in the United States. Although it might seem that synagogues would be the bedrock of Jewish communal life, historian Hasia Diner explains that, already in the 1820s, “American Jews could live a full Jewish life and not belong [to]—or even enter—a synagogue.” Nonprofit organizations sustained a whole civic world that included schools, hometown immigrant benevolent societies, mutual-aid groups, health-care and social-services providers, labor unions and workers’ associations, advocacy agencies, and Jewish press and cultural production. Philanthropy, not synagogues, anchored this full Jewish life.

Many commentators suggest that the prominence of philanthropy in American Jewish history reflects unique and inherent Jewish values of tzedakah (the obligation of charity) and tikkun olam (literally, repairing the world). But religious values do not explain the particular legal, political, and financial transformations of Jewish organizations.

Rejecting this explanation, Berman insists that readers understand philanthropy as an expression of statecraft. She argues that the creation of the Jewish American philanthropic complex was not inevitable or natural, but historically contingent.

The dramatic changes in Jewish institutions’ financial practices mirrored, and influenced, the political evolution of the state. The American Jewish philanthropic complex of the present day, like the US government, holds up private entities and capital growth as the best providers of the public good. A number of factors led to this, including changes in government regulation of charities through tax exemptions, subsidies, and classification; the upward mobility of many American Jews over the course of the 20th century; and communal responses to the genocide of European Jewry.

American Jewish philanthropy, Berman shows, has always been embedded in this country’s political economy. For organizational leaders, reformers, commentators, and antiestablishment activists, this book is an invitation to dispense with sentimental explanations of ­­­­the current philanthropic landscape, which isolate organizations from their political and economic contexts. It is an offer to confront, openly and honestly, the role of the state and of private capital in shaping ethnic-religious communal institutions.

 

This article was commissioned by Caitlin Zaloom.