A Review of The American JewishPhilanthropic Complex: The History of a Multibillion-Dollar Institution by Lila Corwin Berman

Princeton University Press, 2020, $35.00

By Stephen G. Donshik

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 and to offer programs aimed at meeting the needs of Jewish communities regardless of location. Dr. Berman, a professor at Temple University in Philadelphia, approaches the organization of U.S. Jewish communities by framing it in terms of the “military industrial complex,” first described by President Eisenhower in the 1950s.

The book analyzes how Jewish federations used the U.S. tax code to their advantage, building up their own financial reserves and assisting donors in forming private funds, foundations, and other financial instruments – both to 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. In fact, the public sector, through its tax laws that fostered the development of philanthropic financial instruments, ended up investing in those with wealth. 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. For example, Norman Sugarman, who was one of the foremost experts on charitable law and had strong connections with members of Congress, worked with the likes of lay leader Max Fisher, whose sphere of influence not only extended throughout the federation system but also reached the highest levels of the U.S. political system.

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 is made of nearly 200 independent local federations that voluntarily participate together in a national umbrella organization, the Jewish Federations of North America (JFNA). 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 established to respond to the 1903 pogrom in Kishinev and that saved thousands of Jews during and after World War II in Europe; more recently in the Former Soviet Union, its Chesed 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.

Toward the end of the book, Berman discusses Birthright trips to Israel. Although she credits Yossi Beilin for introducing the idea at the 1994 General Assembly, it is a little-known fact that the educational concepts guiding the trips to Israel for young adults was developed in the 1980s in the Jewish Agency’s Jewish Education Committee chaired by Mort Mandel, z”l. At that time Seymour Fox and his team of top-notch Jewish educators presented the conceptual framework for trips focused on informal Israel and Jewish identity education. When Mort Mandel left The Jewish Agency and developed his own foundation, he took the concept with him; a number of the former members of Fox’s team then worked with Beilin to implement the Birthright program. At the time Jewish federations provided the majority of the funding for The Jewish Agency.

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. Throughout the United States, community foundations, universities, hospital, museums, and many other nonprofit cultural, educational, and health care services have used philanthropic vehicles to enhance not only their financial resources but also the services and programs they provide to the general 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 U.S. voluntary sector developed through the creative use of tax law.

Stephen G. Donshik, D.S.W., is a retired faculty member of Hebrew University’s MA Program in Non-Profit Management.