Behind the development of the organized US Jewish philanthropic community

Berman’s book provides an excellent lens to understand how the American political system and the creative approach to evolving tax laws enabled the development of a philanthropic system.

FORMER US president Bill Clinton leaves a memorial service for the wife of Charles Bronfman in New York in 2006. Bronfman has been a major donor for Birthright Israel and Jewish organizations.  (photo credit: REUTERS/KEITH BEDFORD)
FORMER US president Bill Clinton leaves a memorial service for the wife of Charles Bronfman in New York in 2006. Bronfman has been a major donor for Birthright Israel and Jewish organizations.
(photo credit: REUTERS/KEITH BEDFORD)
Many people have wanted to know more about the development of the organized Jewish community in the United States and how the Jewish Federation became a one-stop address for raising funds, providing local services and meeting overseas needs. Yet, it has been difficult to obtain detailed information about the functioning of the national system and about how local communities developed the resources to simultaneously participate in local, national and international projects, while offering programs aimed at meeting the needs of Jewish communities regardless of location. 
Dr. Lila Corwin Berman, a professor at Temple University in Philadelphia, approaches the organization of US Jewish communities by analyzing how Jewish Federations used the US tax code to their advantage, building up their own financial reserves and assisting donors in forming private funds, foundations, and other financial instruments. This was done to both increase their own holdings and to selectively make allocations, not only to philanthropic causes that met their own interests, but also to broader communal concerns. Through this approach, Federations and their donors transformed the nature of individual giving and at the same time enabled a monumental growth in endowment funds. 
Berman posits that the organized Jewish philanthropic system was able to take advantage of changes in the political economy of America, which joined the free enterprise system that was the foundation of capitalism with the democratic form of government that was founded primarily on governing by the will of the people. Thus, the tax laws were formulated and enabled philanthropies, in general, and the Jewish federations, specifically, to channel great amounts of wealth into endowments, while the amount of funds raised to meet the current needs of the local communities remained stagnant.  
According to Berman, the Federation system became less democratic as it developed and came to favor the financial needs of the wealthy. She claims that the Jewish philanthropic system has focused on meeting the needs of philanthropists more than responding to the social, educational, health and welfare needs of the end recipient of those funds. 
Most of the book is devoted to a discussion of how the American legal and financial system enabled national and local Jewish organizations to increase their resources. She highlights Jewish communal professionals and laypersons who were able to use their legal and financial expertise and political connections to create the system that would benefit the Jewish philanthropic community. 
Although the book provides an enlightening perspective on the financial structure of the federation system, it falls short of fulfilling its title of being The History of a Multibillion-Dollar Institution. I am not sure the Federation system can even be categorized as an “institution.” It comprises nearly 200 independent local Federations that voluntarily participate together in a national umbrella organization, the Jewish Federations of North America. JFNA is a loose confederation of member organizations, each with its own board. 
Berman’s historical analysis seems to bypass the “soul” of the organized Jewish community. She focuses on its financial assets while failing to acknowledge its unique accomplishments. Consider the work of the American Jewish Joint Distribution Committee that was founded in 1914 to aid starving Jews in Ottoman Palestine, and later saved thousands of Jews in Europe during and after World War II. More recently in the Former Soviet Union, its organizations meet basic human needs, and the Joint works together with FSU Hillel and other Jewish organizations to meet the education and spiritual needs of Russian Jews.
THE UNITED Palestine Appeal, the forerunner of the United Israel Appeal that is now folded into JFNA, aided the nascent State of Israel in the early years through its funding of the Jewish Agency for Israel. Whether it was assisting in the building and strengthening of the early agricultural settlements – kibbutzim and moshavim – or aiding in the absorption and resettlement of new immigrants from 106 different countries, or building nurseries, schools and community centers, the Jewish Agency continues to improve Israelis’ well-being in so many ways.
Most of us are familiar with the valiant efforts to welcome and resettle Jews from Ethiopia in Israel and Jews from the former Soviet Union in the United States, Canada and Israel. Jewish Federations have also met local needs by providing educational, cultural and mental health services through their system of day schools, family services, community centers, homes for the aged and other unique nonprofits. In all these ways, the Federation system has been able to respond to crises and unanticipated needs in a timely and professional manner. 
In her discussion of how Federations meet both local and overseas needs, Berman refers to the “blurred line” between the Jewish Federations and the United Jewish Appeal. Yet I would argue that there was no blurred line. Until the 1980s, most communities supported two fundraising organizations, one for the local community and one for Israel. Around that time, local Federations developed a single allocations process in which one organization raised and dispersed money to meet both local and overseas needs. In most places, this change increased volunteer leaders’ commitment to the philanthropic system. Over time, the total amount of funds raised also increased, and the new arrangement worked to communities’ advantage in meeting both local and overseas needs. The book also addresses the roots of the Birthright Israel program.
Berman’s book provides an excellent lens to understand how the American political system and the creative approach to evolving tax laws enabled the development of a philanthropic system that is now a model for philanthropy beyond the Jewish community. Democracy and capitalism are not the enemies of the people but are what allow the voluntary sector to develop and thrive. It is unfortunate that this message is not communicated in the book. Yet I would recommend the book to anyone who wants to understand how the US voluntary sector developed through the creative use of tax law.
The writer is a retired faculty member of Hebrew University of Jerusalem’s master’s program in nonprofit management.

THE AMERICAN JEWISH PHILANTHROPIC COMPLEX
By Lila Corwin Berman
Princeton University Press
280 pages; $35.00