This review appears in our Spring 2021 issue. Subscribe now to receive a copy in your mailbox.
Discussed in this essay: The American Jewish Philanthropic Complex: The History of a Multibillion-Dollar Institution, by Lila Corwin Berman. Princeton University Press, 2020. 280 pages.
IN THE WINTER OF 2018, I found myself in a summer camp in the Santa Monica mountains, learning to ask for money. The weekend program, called “Retreatology: The Art of Jewish Retreat-Making,” was organized by Moishe House—a nonprofit that funds events for Jews in their 20s—and aimed to teach me, along with dozens of other participants, how to lead our own retreats, for which we would then apply to the organization for grants. Perhaps the participants at those retreats would create their own retreats in turn. Here, Jewish philanthropy’s emphasis on continuity had been distilled into a set of iterative, rationalized production techniques—what, in a different context, Tesla founder Elon Musk calls “building the machine that builds the machine.” The retreat mixed childish fun and brutal utilitarianism: An arts-and-craft session in which we decorated notebooks with glitter followed a PowerPoint presentation on the contractual obligations of our grant agreements. Salient stipulations included that 75% of the attendees must be Jews between the ages of 22 and 32, and that we could not “deny Israel’s right to exist as a secure, democratic Jewish state, including support for or participation in the BDS (Boycott, Divest, Sanction [sic]) movement.”
For me, adhering to this last clause necessitated finessing. The retreat I eventually led involved interpreting the geography of modern Tel Aviv through both rabbinic texts and modern social thought, and the syllabus was heavy on Marxists like David Harvey and Henri Lefebvre. We would study the texts in the mornings and tour Tel Aviv neighborhoods in the afternoons—learning, for instance, about the Nakba, in which more than 700,000 Palestinians fled or were expelled from what became Israel in 1948, and connecting it to the ongoing gentrification of Yaffo. But as contractually required, we did not discuss what all of this meant about Israel’s “right to exist,” and no one mentioned BDS.
Even beyond the specific political limitations Moishe House imposed, I was aware of the irony of receiving philanthropic checks to fly around the world and teach about capital reinvestment and inequality. As we toured an expensive, controversial condominium development in Yaffo, I thought of the fancy Airbnb I had rented for the week, courtesy of the Dorot Foundation, which had paid my travel expenses—and of my American students on gap years in Israel, many of them renting apartments paid partly with philanthropic cash. Trying to produce a Jewish critique of neoliberalism on a cushy foundation budget, I began to feel, as Anand Giridharadas writes of his experiences as a “grantee” in the rarified airs of Aspen, like a “casual participant in—and timid accomplice to, as well as cowardly beneficiary of—a giant, sweet-lipped lie.” After all, whatever will dismantle the master’s house, it likely won’t be grant applications.
At the Retreatology weekend in Santa Monica, no one had discussed any of these tensions. In fact, nothing about the project seemed to bother my fellow attendees: This was business as usual—literally, for many of the participants, who were entry-level Jewish nonprofit employees, supplementing their modest salaries with the small stipend Moishe House offered. But even those of us who weren’t Jewish professionals understood the rules of the game. Young Jews today are used to being offered gifts, incentives, and payments for participation in Jewish life, each with its own application form, expectations, and conditions: Birthright, Honeymoon Israel, and Masa grants for Israel travel; OneTable “nourishment credit” to host Shabbat dinners; free Jewish books for parents from PJ Library. While institutions like synagogues and Jewish community centers are melting into air, young Jews increasingly have direct access not to local communities but to capital—or rather, capital has direct access to us.
We rarely use the word “capital” in the context of Jewish philanthropy; the foundations themselves often use softer language (not “jobs” but “fellowships,” not “payments” but “grants”) and solicit attention for their dispersals, rather than their holdings. Nonetheless, the relevant term is capital: large concentrations of wealth, expected to continue accumulating over time, distributed in a tightly controlled stream by a few megadonors, and justified by a market ideology that reimagines social life in the image of a stock portfolio. (One free Israel trip for “dynamic Jewish leaders,” paid for by the Schusterman Family Philanthropies, is named “ROI,” for “Return on Investment.”) The role this capital has in shaping American Jewish life raises deep questions: Who owns American Judaism? What does that imply for the cultural and political autonomy of ordinary Jews in creating and sustaining Jewish life? And, given that the institutions of American Judaism are largely controlled by philanthropic capital, what are the possibilities for a genuine Jewish left?
TO ANSWER THESE QUESTIONS, we need to know how Jewish philanthropic capital was created—a story Lila Corwin Berman, historian of American Jewry and professor at Temple University, tells in her new book, The American Jewish Philanthropic Complex. While most historians of Jewish charitable institutions treat them as the natural consequence of an essential, transhistorical Jewish imperative to contribute—the dollar slid into the tzedakah box before Shabbos, the tab folded during the Kol Nidre appeal—Berman argues that such practices, and parallel motifs in religious texts, cannot sufficiently explain the remarkable explosion of the Jewish philanthropic sector over the past 70 years: Annual American Jewish giving is estimated today at roughly $6 billion dollars a year, Jewish federations own assets of about $16 billion (as of 2013), and far more wealth lies in the hands of private foundations. She is thus less concerned with delineating the distinctiveness of Jewish life than with relating the shifting structures of Jewish institutions to broader developments in American political economy. The book traces how, since World War II, American Jewish donors, fundraisers, and financial professionals have created massive concentrations of philanthropic capital, and in so doing, have participated in—and sometimes shaped—the neoliberal retreat of government from the provision of social services, the increasing dominance of financial markets over American public life, and the correlated increase in private wealth. Though Jewish philanthropy is ancient (the archeological remains of ancient synagogues often include donor lists), philanthropic capital is hypermodern.
The American Jewish community’s redescription of capital as tzedakah is tempting because it flatters us; it allows us to feel that we are uniquely charitable and that Jewish institutions’ accumulated wealth reflects our hard work. Yet this story conveniently overlooks how the state makes capital accumulation possible in the first place. A better story would begin, as Berman does, with tax exemption. It’s easy to forget that the state subsidizes philanthropy, because in the United States, that subsidy occurs through a nonevent, in the empty space between gross and taxable income. The naturalization of tax exemptions for charitable contributions—a holdover from English common law, in which the church was tax-exempt because it was part of the state—means that the relationship between the state and private associations barely registers as political and is rarely debated.
But the seemingly benign policy of tax exemption ultimately amounts to the government paying a portion of donors’ charitable contributions. In a system of progressive taxation, critics note, the portion of one’s gift paid by the state increases as one’s income rises. Ordinary taxpayers rarely give enough to itemize their deductions, especially since the Trump tax plan raised the standard deduction for a single person to $12,400. Charitable tax exemptions thus allocate power disproportionately to the wealthy. And for the financially savvy, the exemption has lucrative wrinkles: Assets donated to public charities, for instance, can be deducted at their appreciated value without paying tax on the capital gains. In some cases, then, the state pays more than half the bill of a charitable donation. But because it pays by not collecting, that contribution obscures itself. (For several years, I used money from the Jewish nonprofit OneTable to buy Ahi tuna to serve as a Shabbos appetizer. The excessive largesse occasionally prompted nervous laughter, but we might have been considerably more nervous had we calculated how much of our sashimi-grade fish was purchased by the federal government, with money that might have otherwise funded public services.)
In the 19th and early 20th century, Jews, like other Americans, took advantage of tax exemption to build charitable institutions: soup kitchens, landsmanschaftenorganized by immigrants’ places of origin, and interest-free loan providers; educational organizations funded by wealthier German Jews to assimilate newer, Russian immigrants; Jewish federations that centralized and organized local nonprofits. Yet as late as the 1920s and ’30s, none of these nonprofits owned much of anything. Federations, as Berman shows, operated on a strict dollar-in-dollar-out policy, responding not only to the material needs of a poor Jewish population, but also to a public skeptical of philanthropic capital. Many Americans—particularly socialists and populists—worried about what they called “charity trusts,” which they feared gave the rich undue power in society. As political philosopher Rob Reich details in his book Just Giving, in 1912, when John D. Rockefeller was attempting to create an unprecedented federal charitable trust for his fortune, Reverend John Hayes Holmes, who would one day head the American Civil Liberties Union, condemned it, saying, “this foundation . . . must be repugnant to the whole idea of a democratic society.” Long before anyone named the “nonprofit industrial complex,” Americans distrusted philanthropic wealth—and for a time, their mistrust constrained its accumulation.
But after World War II, those constraints gradually loosened as circumstances changed. Many Jews prospered, obviating much of the need for direct aid, and for those who did not, New Deal programs offered basic forms of economic security. In response, federation leaders started imagining new purposes for their fundraising. The government also increasingly offered federal grants to Jewish social service providers, like the Hebrew Immigrant Aid Society and Jewish Child and Family Services, on the condition that they provide their services universally, leading some donors and young Jews to feel that these programs were insufficiently Jewish and to demand more funding for particularist culture and religion. Meanwhile, the twin traumas of the Great Depression, which had exhausted the resources of Jewish nonprofits and donors, and the Holocaust, which had placed the survival of world Jewry into doubt, encouraged the development of endowments. The slogan “Never Again” authorized not only the cultural ideal of “continuity,” but also theoretically unlimited stockpiling for an indefinite future.
Even as Berman delineates the larger historical contexts in which philanthropic capitalism emerged, she does not treat American Jews as passive followers of historical trends. Rather, the most disturbing and remarkable chapters of her book show how Jews helped make the American state more hospitable to philanthropic capital. One unlikely hero of this quest was a midwestern tax lawyer named Norman Sugarman, who advised the Jewish Federation of Cleveland, as well as other Jewish and non-Jewish charities, as they expanded their endowments. To facilitate this expansion, he helped create a new legal structure, the “donor advisory fund”—what is now known as a “donor-advised fund”—which allows private individuals to place money under the legal stewardship of public charities, like federations. Anticipating that the federal government would soon consider tax reform, Sugarman waged a campaign throughout the ’60s to establish the legitimacy of the legal innovation, which included testifying before Congress, leading seminars for stockbrokers, and strategically posing test cases to the IRS. As of 2013, private funds enjoying the tax benefits of public charities amount to a third of the $16 billion endowment assets of Jewish federations. In principle, these benefits required the public charities to control the money, with donors only “advising” on its distribution. In practice, the relationship was and is often reversed, with federations essentially providing financial services and limited oversight to private capital. Sugarman disseminated his new model to large non-Jewish charities like United Way, creating a tax infrastructure for funds that now hold in excess of $120 billion dollars.
As Sugarman and other Jews helped shift American political economy toward neoliberalism, figures like the conservative donor Max Fisher ensured that the large philanthropies—which had previously inspired suspicion—would be viewed as part of an apolitical consensus in the Jewish community at large, a vision Berman dubs “depoliticized politics.” Though Fisher undoubtedly belonged to the right and participated directly in its politics—he drummed up support for Richard Nixon and founded the Republican Jewish Coalition (RJC)—he always attempted, as Berman writes, “to construct a Jewish consensus around a clear set of issues that he sought to portray as beyond politics,” particularly Israel and the Jewish philanthropic sector itself. He saw the value of nonpartisan institutions like the Conference of Presidents of Major American Jewish Organizations, which offered wealthy, mainstream Jewish nonprofits as the representatives of American Jews’ and their apolitical will. His championing of the philanthropic sector as a site of Jewish communal consensus, which involved defending and expanding charitable tax deductions, dovetailed neatly with Republican policies that increased private wealth at the expense of public spending. By 1982, just as Ronald Reagan was starting to slash the welfare state and lowering taxes on the wealthy, federation endowments reached parity with their annual campaign revenues; today, the ratio is 20:1.
Berman’s narration of the shifts wrought by Sugarman, Fisher, and their peers transforms how one reads about individual philanthropic scandals in the Jewish world: Particular misdeeds connect to broader, economic structures. Take the practice of embedding private funds at public charities, whether through donor-advised funds or their close cousin, supporting foundations. In 2018, journalist Josh Nathan-Kazis reported in The Forward that funds flowing from the Helen Diller Family Foundation, a supporting foundation of the San Francisco Federation, were funding Canary Mission, an anonymous far-right group that maintains extensive dossiers on students, professors, and organizers whom it deems antisemitic due to their promotion of BDS or criticism of Israel. The group’s shady anonymity—maintained by accepting donations under the name of an under-the-radar charity, until the relationship was uncovered through investigative journalism—reflects the quiet logic of contemporary Jewish politics: The left has a public sphere of writers and intellectuals, but the right owns the community’s vast, private financial structures.
The Federation discontinued the grants, which it said violated federation policy. It had to do so—not only because it faced public pressure, but more importantly, because its most valuable asset, its tax-exemption as a public charity, depends on avoiding political partisanship and maintaining the legal fiction that it controls donor-advised funds and supporting foundations. Thus, while the Canary Mission incident outraged leftist Jews because of its regressive Israel politics, its real lesson was about the dangerous financial structure of American Jewry: increasingly concentrated in a few hands, closed to public deliberation, and committed—far more than it is to Israel, as the abandonment of Canary Mission illustrates—to the politics of its own preservation.
WHAT IS TO BE DONE? Berman’s project is descriptive rather than prescriptive, so her book concludes not with recommendations, but with accounts of reform efforts that are already underway. She examines three different recent projects to remake Jewish philanthropy, whose aims range from making the philanthropic system “more thoroughly democratic” to doubling down and making it “more completely capitalist.” For those of us who’d like to see the system democratized, the policy solutions appear relatively straightforward: Charitable tax exemptions should be eliminated, or at least narrowed; boards should be reformed to include ordinary Jews, chosen democratically; and large portions of endowments should be quickly spent, rather than allowed to accumulate. But the leaders of our philanthropic institutions are unlikely to adopt such policies, since to do so would dismantle their own power and put many of them out of jobs.
So what can the ordinary Jew do—particularly the young one, who does not design or manage these systems, but rather works for them or consumes their products? Their main tool—divestment from philanthropic capital—does not seem feasible. It is easy enough to eschew Birthright to protest Sheldon Adelson’s conservative vision for Israel and America, or to stop reading Tablet when you realize its immaculately photographed features are funded by Zalman Bernstein’s mutual-fund fortune to provide journalistic cover for a steady stream of right-wing propaganda. But if the problem is not just bad Israel politics, but financial structures, then the problem is everywhere. The dominance of philanthropic capital is particularly evident in the trendiest, most “progressive” sectors of the Jewish institutional world, like the bevy of post-2000 start-ups offering alternatives to older, more conservative institutions: Hadar and Svara, which attempt to liberalize yeshiva learning; Hazon, a Jewish organization focusing on the environment and food justice; even the revival of Jewish Currents, which involved a major gift by the Puffin Foundation.
Many of these start-ups culturally mimic their counterparts in the business world. Hierarchically managed by charismatic founders, they emphasize “scalability” and rapid growth; valorizing “disruption,” they imagine progress as the replacement of older, bulky bureaucracies, like federations and synagogues, with leaner, more efficient and mission-driven competitors. In many of these organizations, dues and fees for services are dwarfed by philanthropic donations, so that participants’ involvement is heavily subsidized. According to this financial logic, participants are not primarily members, or even consumers, but rather evidence of success—their experiences are the products sold to funders: thus the glut of evaluative surveys to which young Jews are now habituated (“Evaluate your likeliness to intermarry before and after this program on a scale from 1 to 5 . . . ”).
This control reflects not only the massive expansion of Jewish capital, but also the precarity of Jewish labor. Given Les Wexner’s unsavory ties to Jeffery Epstein, it would be fair to ask a rabbinical or PhD student to forgo a Wexner fellowship—which awards up to $30,000 a year for up to three years—if they could expect the comfortable salary of a pulpit rabbi or tenured professor. But just as universities are casualizing their workforce, so too the Jewish professional world is now organized precisely to squeeze value from ordinary workers: Reports from The Forward show a massive gulf between well-compensated (and overwhelmingly male) senior management of Jewish nonprofits and the vast majority of workers, who are paid a pittance. I grimace when I remember grifting for foundation-supported fish, but I am aware that I embraced this critique just when a full-time salary from a public university replaced my graduate student stipend.
While we are waiting for, or fomenting, revolution, Berman’s book offers two helpful morals. The first is that many of our suppositions about Jewishness and money—particularly the idea that the indefinite accumulation of wealth will sustain Jewish culture—are of relatively recent vintage. One of the commonplaces of contemporary Judaism is that, as former Jewish Theological Seminary chancellor Ismar Schorsch writes, while Christianity “evinces a strong aversion to personal wealth” and valorizes poverty, Judaism celebrates wealth “as a sign of God’s favor.” Like other pieces of folk theology, this one has only a shaky textual basis. Its real appeal is in aligning Judaism with the values of secular, capitalist America—an alignment, Berman shows, effected institutionally only in the last century. It follows, then, that Jews may find surprising resources if we turn to a pre-neoliberal, and even pre-capitalist Jewish tradition.
Indeed, traditional texts present considerable challenges to the everyday practices of Jewish institutions which claim those texts as their own. The midrash to the Book of Ruth imagines the Torah petitioning God, “Ruler of the Universe: Make my lot with the tribe of poverty.” A passage observant Jews recite daily from the Mishnah, the second-century code of Jewish law, lists “the things of which a person enjoys the fruits in this world, while the principal remains for the world to come: honoring one’s father and mother; gifts of loving-kindness; making peace between friends. And the study of Torah is equal to them all.” The financial metaphor somewhat jarringly imagines salvation as capital accumulation. But if at a glance the image feels contemporary, the accumulation it describes remains exclusively in the spiritual realm. The context highlights the difference between the Mishnah’s vision of accumulated merit and the modern practice of accumulating wealth, for the passage appears at the beginning of a tractate that details the legal requirements that the corners of fields be reserved for the poor. In this world, it implies, we remain always gleaners, never owners. The Jewish left ought to challenge our communal institutions with this traditional suspicion of wealth—asking how to realize this alternative vision of culture as public and collective.
The second moral of Berman’s book is that American Jewish institutions’ reactionary politics do not just result from particular Jews believing the wrong things; rather, they are built into our institutions’ economic structures, continuously entrenched by those institutions’ slow, deliberate financial transformation. If Max Fisher’s work on behalf of the RJC has basically failed to change how American Jews vote, his investments in well-funded, “apolitical” philanthropic institutions, which “represent” American Jewry, have been far more successful. And regardless of what Norman Sugarman believed about, say, income inequality, the donor-advised fund is here to stay. If we want to undo these changes, or to transcend them and create something else entirely, we must be attentive, above all, to our institutional structures, and the ways our organizations are entangled with capitalism and the state.
If privatized, capitalist Judaism was built through the strengthening of private, capitalist financial structures, then the creation of alternate Jewish economies could construct something radically different. Tellingly, this shift would extend considerably beyond anything contemplated by the present-day actors Berman discusses in her conclusion. But it’s hard to read Berman’s history and to conclude that philanthropic capitalism should be reformed, rather than scrapped, spent down, and liquidated. This shift would involve downsizing: fewer private day schools, summer camps, and trips to Israel, all of which are subsidized by endowments; fewer fellowships for Jewish leaders, fewer conferences and summits, less innovation. The alternate forms of Jewish life are endless and highly particular: organizing labor unions for Jewish workers; planning Jewish educational models that do not presume retreating from public schools into expensive, private ones; reclaiming tzedakah as a practice of dispersing rather than accumulating money. Each one would be necessarily humble and partial, but the hope is that their cumulative, long-term effect might be more substantial. These economic and cultural structures would reduce the influence of the philanthropic complex, rendering its dissolution gradually more plausible—eventually, perhaps, bringing forth a new Jewish world.
A previous version of this review stated that the Jewish Community Federation of San Francisco funded Canary Mission by means of donor-advised funds, rather than a supporting foundation.
Raphael Magarik is an assistant professor of English at the University of Illinois at Chicago.