FOUNDATIONS


FOUNDATIONS
The earliest period for which there are records of Jews having established foundations is the Middle Ages. In particular, Joseph Ephraim ha-Levi of Ecija, Castile, is known to have endowed the school of the Jewish community in 1332. In the modern period jonas fraenkel (1773–1846) bequeathed the greater part of his fortune to establish a seminary, which eventually opened in Breslau. In 1866 moses montefiore set up an endowment to maintain a synagogue and college near his home at Ramsgate. On his death, control passed to the elders of the London Congregation of Spanish and Portuguese Jews. The philanthropy of maurice de hirsch , apart from the Jewish Colonization Association, included substantial gifts of a permanent character, e.g., 12 million gold francs for the education of Jews in Austria (1888) and the Baron de Hirsch Fund, New York (1891). (Dan S. Rosenberg and Sefton D. Temkin) The evolution of much of Jewish philanthropy from a communal base to an entrepreneurial market-driven base is one of the important subtexts of late 20th century Jewish America. To understand contemporary American Jewry, one must explore the growth of Jewish foundations, their impact on communal structures, various models of foundation partnership and collaboration, and some projections for future development. In the 1830s Alexis de Tocqueville described one of the unique attributes of American life: voluntarism. Whether due to mistrust of government or an emergence of a richer civic society, Americans strongly identified with the creation of voluntary associations aimed at improving quality of life along with fulfilling various affinity needs of the population. By the late 19th century this emerged into a serious third sector: a nongovernmental, not-for-profit sector whose existence was to improve the common good and as the 20th century tax structure developed this sector grew exponentially in recognition of the unique societal role this sector was playing. At about the same time, led by figures such as Andrew Carnegie, John D. Rockefeller, and Henry Ford the creation of charitable foundations (many of which were to exist in perpetuity) to enhance the public good in the name of and as part of the legacy of entrepreneurs also became a component of the American scene. Philanthropy became serious business and even with increased regulations brought about by the 1969 Tax Reform Act, became a business of enormous growth. By the end of the 20th century more than 80,000 grantmakers, of which 60,000 were in the form of foundations, making over 500,000 grants, existed within the United States with assets in excess of a quarter of a trillion dollars. It is estimated that 10,000 of these are Jewish family foundations, an overrepresentation by more than eight times the Jewish representation in the population. There are serious definitional problems in creating a taxonomy for Jewish foundations resulting in a paucity of reliable data as to both numbers, dollar values, and impact of these foundations. Among these issues are those that have to do with the definition of a Jewish foundation. Is it a foundation whose principal is/was Jewish? Whose board is primarily Jewish? Is it a foundation whose historic giving patterns were primarily to the Jewish community? Exclusively? Somewhat? Must its charter specify a Jewish purpose? Is a foundation Jewish if founded by a Jewish principal whose distributions throughout the first generation were for the benefit of Jewish causes but today is governed by the heirs who are no longer Jewish and who no longer support Jewish causes? What if that foundation gives exclusively to Israel causes? What if those Israel causes are to support the 18% of the Israeli population that is Arab? Further, organizational definition problems also create a barrier to full understanding. Should we consider as Jewish foundations those donor-advised funds that sit either at Federations, Federation-supported community foundations, or general community foundations? These donor-advised funds are no longer the assets of an entity controlled by the donor. They are the assets of the community foundation. However, the foundation has indicated that it will generally follow the advisory role given to the donor (or his/her designees). With Federation-related foundation assets approaching $4 billion, the relevance of these questions becomes clear as one wants to understand the depth and breadth of the field. The first two-thirds of the 20th century saw the development of the North American Federation system as the New World's replication of the European kehillah. While vastly different from the European model and far more voluntarily driven, the Federation became the community's address for collective responsibility of Jews one to another. Its fundraising prowess grew dramatically through the first half of the century and culminated in unprecedented support of the united jewish appeal , the central overseas arm of this movement, in 1948. On an inflation-adjusted basis, this was the most powerful fundraising year in mature communities either before   or since. For the birth of the State of Israel was the ultimate Jewish act of collective responsibility and even those who did not physically participate were prepared to fiscally contribute. The UJA/Federation campaigns were especially relevant at the most critical moments of Israel's life. The years 1956, 1967, 1973, 1982, and 1990 were significant blips on a long term donation curve showing the powerful relationship between amkha and an Israel in trouble (or in the case of 1990 with the coming Soviet aliyah of one million people in a moment of extraordinary opportunity). Non-donors became donors and lapsed donors gave again. Yet on an inflation-adjusted basis, the decline in the UJA/Federation annual campaign revenues is clear and evident with both a real dollar decline of almost one-third every decade and a market share decline of an equally significant proportion. Outside of times of crisis, federations engaged in serious planning processes aimed at determining how best to serve the need of Jews locally and around the world as community-driven, consensus-sensitive organizations. The processes required to govern called for serious and extensive involvement. Immediate and rapid decisions could not be made. Rarely, could an individual feel like (s)he as an individual, was determining the course of the future. In many ways this corporate culture was antithetical to the successful entrepreneurs who built their businesses by making decisions and unilaterally determining the future. While the major Jewish philanthropists continued to financially support the UJA/Federation movement as well as many of the other Jewish organizational entities which emerged in North American life, many decided that they wanted more personal hands on involvement in their philanthropy and, often, shaping the Jewish world. At the same time their legal and tax advisors were encouraging them to set aside funds to meet their philanthropic obligations so as to take advantage of generous American (and less so, Canadian) tax policies in which they could forgo substantial taxes and only be required to annually spend five percent of the funds set aside in these tax exempt private foundations. By the 1990s, many of these foundations (Abraham, Bronfman, Crown, Goldman, Haas, Marcus, Schusterman, Spielberg, Steinhardt, Weinberg, Wexner) became household names in the organized Jewish world. They were the supporters of many initiatives of Jewish life. An interesting dynamic began to occur at this time. The first was a planned initiative that was created so as to have many of these "mega" philanthropists in the Jewish community get to know one another. Following the very successful launch of Operation Exodus, the campaign to support the aliyah of Soviet Jews to Israel accompanying the opening of the Soviet Union, at which $54 million was raised at a breakfast of just a few major donors, the then-CEO of United Jewish Appeal recognized that these generous individuals did not know one another. He organized a Study Group of major foundation principals from North America and elsewhere, which came together twice a year to study together issues of contemporary Jewish life. Much of the time of the Study Group was devoted to its various members getting to know one another and to learn of each other's interests. Not surprisingly, a number of initiatives emerged in which members of the group partnered to change Jewish life. First among these was the rescue and resuscitation of Hillel, the American Jewish entity responsible for Jewish life on university and college campuses. Other initiatives which emerged came from the energy and vision of the various Group members. The Partnership for Excellence in Jewish Education (PEJE) developed as a partnership of a number of philanthropists (and one federation) initiated by a half dozen of the Study Group members. Within a year after two of its members launched Birthright Israel, eight Group members became founders with initial donations of $5 million each, unprecedented in the scope of non capital project related startups. This effort attracted both the government of Israel and the communities of the world through the Federations, Keren Hayesod, and the Jewish Agency for Israel as partners, resulting in more than 70,000 young adults from 36 countries having their first living and learning experience in Israel. This emerging trend did not come without concerns with entrepreneurial unilateral decision-making becoming more prevalent. Would federations be expected to pick up the pieces after foundations became fatigued while funding a program (even if worthwhile) for several years? Have we created new ethical dilemmas replacing a democratic, open Federation model with an autocratic, closed one? In smaller communities what role would emerge from local foundations whose assets and annual revenues greatly exceeded that of the community's structures? While there was a century worth of experience in the general world of foundations, the world of Jewish foundations tends to be significantly younger, especially those with assets in excess of $100 million. Further, the general infrastructure of Jewish family foundations is yet underdeveloped. The Jewish Funders Network, founded in 1991, became a membership organization that was designed to respond to the needs of individual Jewish funders and foundations. Its annual meeting which attracts close to three hundred has subjects ranging from a fifth generation Rockefeller's guidance on philanthropy to the Israeli-Palestinian situation with major speakers in a variety of areas and includes donors of as little as $25,000 a year to those who are responsible for distributing as much as $50 million a year. In recent years federation endowment funds and affiliated foundations are among those who have participated in Jewish Funders Network meetings and there has been serious engagement on the many ethical and planning issues with regard to the relationship between the funders, the independent funders, and their communal organizational brethren. As the Jewish Funders Network becomes a more sophisticated setting, it is developing affinity groups with interest in areas suchas Jewish education, the needy in Israel, etc. As with American foundations in general, the overwhelming majority of Jewish family foundations have no staff and are managed by the principals, with assistance from families and or businesses. Nevertheless, 24% give away more than $250,000 a year and, increasingly, professional assistance   is being sought to facilitate the management thereof. As with all American foundations, increasing attention is being paid to philanthropic impact including the evaluation of programs and projects supported by these foundations and in some cases the external evaluation of the foundation's own performance. In the late 1990s a group was established in London which brought together European, Israeli, and North American foundations who operated multinationally. These tended to be larger foundations and the objective of the group was to create a setting where principals and/or chief professionals in the Jewish funding arena could engage in exchanges that better met the needs of these larger multinational foundations. The federation communal structure, in recognition of these trends, began a number of initiatives aimed at providing donors with collaborative models for giving, distinct from the historical annual campaign in which the distribution of all available funds was determined by a volunteer-driven planning and allocations process. Beginning in Washington, and then moving on to Toronto, New York, and Los Angeles Jewish venture philanthropy funds were established to engage younger donors in collaborative funding. While many of these funds did not meet the technical terms of "venture philanthropy" they became important experiments in creating funding collaboratives within the Federation structure yet outside of the formal allocations process. Similarly, several federations created Jewish women's foundations, which brought together a different affinity group with some of the same attributes. It is highly likely that the next phase of Jewish philanthropic development will find various permutations of individual entrepreneurial and communal philanthropy as communities and donors learn from these experiences. In addition to the challenge of maintaining the collective strength, which so highlighted the effectiveness of Jewish philanthropy, Jewish life is challenged in maintaining the interest of the most generous donors. In a study of American gifts of more than $10 million between 1995 and 2000, Jewish donors represented 18% of these "mega" gifts and 23% of the total giving in this category while being only 2% of the total population. Only 6% of this support went to Jewish causes. In the early 21st century, Jewish American foundations will see the greatest transfer of wealth in history as those who earned great fortunes in the mid- to late-20th century bequeath their fortunes, thus creating a new generation of young philanthropists. This occurs at the same time there is a decentralization of Jewish philanthropy, moving away from the federation "central address" in favor of donor-driven programming. Simultaneously, philanthropy is becoming more hands-on with donor involvement beyond writing out checks. Donors are holding their own foundations and the community to higher standards of accountability. They seek not only greater involvement in decision-making as to the use of their support but also want to monitor the impact and effectiveness of its use. These dynamics will continue to create conflicts between systems of collective responsibility and the emerging entrepreneurial foundation generation. The evaluation of Jewish family foundations is early in its development, but already has radically altered the Jewish philanthropic scene. See also philanthropy . (Jeffrey R. Solomon (2nd ed.) -ADD. BIBLIOGRAPHY: R. Greenberg, "Is It Good for the Jews?" in: B'nai B'rith (Winter 2003–4); G.A. Tobin, Jewish Family Foundations Study (1996); G.A. Tobin, J.R. Solomon, and A.C. Karp. Mega-Gifts in American Jewish Philanthropy (2003); U.S. Census Bureau, Statistical Abstract of the United States 2004–2005.

Encyclopedia Judaica. 1971.

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