The True Costs of the Fiscal Crunch

Since the New Deal, the United States has increasingly operated under a welfare state paradigm, in which solutions to social and individual problems are found in federal government action. Whether we like it or not, we are now being forced to adopt a new social paradigm that focuses on limited government and puts increased responsibility for social assistance on civil society, including nonprofit institutions, churches and voluntary organizations. The consequences of this new model for the Jewish community are considerable.

I do not accept the Tea Party view that this shift reflects a better moral vision of man in society. This is not an endorsement of the Ryan budget plan, the GOP proposal to tackle the structural deficit, or the findings of President Barack Obama’s Simpson-Bowles Commission or the president’s more recent proposals. This is a matter of brute economics—as a nation we are broke. The national debt is moving beyond $14.3 trillion, and current projections of future debt are the most alarming we’ve seen. We cannot close our eyes and wish the structural deficit away; we need to acknowledge the likelihood of this dramatic shift in our view of government and consider carefully its implications for organized Jewish philanthropy and communal priorities.

Jewish organizations have excelled in “working” our system of government largess. Indeed, most of the budgets of Jewish
social service institutions come, one way or another, from government grant programs. Ira Sheskin of the University of Miami has concluded that “the vast majority of elderly Jews who need social services are currently being served at no cost to the Jewish community through governmental and private for-profit and non-profit agencies,” themselves largely reimbursed through government funding. Brandeis University scholar Jonathan Sarna has noted that the post-World War II government social welfare regime did much to enhance Jewish life, since “money freed up from social services was devoted to Israel and Jewish education.” If this changes, we will have no choice but to turn the clock back. This means a serious rethinking of the way the community spends its money.

When the 1990 Jewish Population Survey brought home the growth in intermarriage, Jewish philanthropists poured millions into “continuity” projects that would ensure the Jewish future—Birthright Israel, which offers free trips to Israel for young people, is just one example. But with an aging population and curtailed government programs, donors could be forced to reduce that emphasis. The number of elderly Jews doubled between 1957 and 2000, reaching 1,072,000 in the 2000 National Jewish Population Survey. Extrapolated for 2010, this suggests that more than 16 percent of the American Jewish community is approaching the “elderly” category. Twenty-four percent of Detroit’s Jews are already classified as elderly, as are 18 percent of New York’s.

Of course, supporting the elderly cannot be allowed to crowd out funding for Jewish “continuity” altogether. Education is necessary to ensure the Jewish future. But new ideas may be required. One possible model is the Superfund for Jewish Education and Continuity created by Chicago philanthropist George Hanus, which asks donors to designate five percent of their estate for Jewish education.

Right now, organized philanthropy through the Jewish Federations of North America gives—depending on the city—between an estimated 35 percent to more than 50 percent of its annually raised funds to Israel. Pressure will undoubtedly grow to reduce that share and to increase the money going to “home” charities. Yet some argue that total contributions to the Federations will fall if the focus is shifted from Israel, since Jews open their checkbooks for Israel more than for philanthropy at home. That may well have been true for the generation that was “present at the creation” of the Jewish state. But in a recent study of 21 Jewish foundations, when donors who gave $1,000 or more were questioned about their reasons for donating, providing social services to the elderly was always at the top of the list. Thus, a focus on domestic needs may not appreciably reduce totals.

The fiscal crisis will require the nonprofit bureaucracies that represent Jewish philanthropic energy to seek efficiencies, including mergers and joint purchasing programs when necessary. In the 1950s, when Jewish leaders asked eminent Columbia University sociologist Robert MacIver to suggest ways they could function more efficiently, he proposed the merger of the then three Jewish defense agencies—the American Jewish Committee, the Anti-Defamation League and the American Jewish Congress. Little happened, though for a while two of the three tried out a “joint defense appeal.” We may not have the same luxury of doing nothing in coming years.

As Jews, we do have a moral responsibility to the poor among us. The new social paradigm only heightens that responsibility. But fresh approaches will be needed. For instance, we may need to redouble our emphasis on volunteerism around the synagogue and community center. But there is little doubt that we will need to rethink priorities, even as we recommit to our philanthropic responsibilities. We cannot go back to the “good old days.” I hope that our communal leaders are listening.

Marshall Breger is a professor of law at the
Catholic University of America.