Jewish Charities Grow Huge on Cash From Government — Donors Give to Israel

26 Billion Bucks — Subsidies Free Up Cash for Jewish State

Kurt Hoffman

By Josh Nathan-Kazis

Published March 31, 2014, issue of April 04, 2014.
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How can Jewish charities afford to spend so much money on Israel?

It doesn’t hurt that federal, state and local governments in the United States spend billions subsidizing many of the other things the charities do.

Israel-related not-for-profit organizations get more contributions than any other type of Jewish agency, as the Forward reported last week. Now, new data from the Forward’s ongoing investigation into the finances of 3,600 Jewish tax-exempt groups show that donors alone don’t come close to paying for today’s sprawling charitable apparatus.

While philanthropists enjoy the prominence that comes with seats on the boards of charities and buildings named after them, they are actually just a small part of the total Jewish funding picture. As the plurality of their charity dollars go to Israel-related causes, health care and social service groups subsist largely on government grants and contracts.

“They are the government’s delivery system,” said Jeffrey Solomon, president of the Andrea and Charles Bronfman Philanthropies, of the community’s human services agencies.

Jewish families, too, bear some of the burden, paying often-substantial fees to health care agencies and tuitions to day schools and summer camps.

Charitable contributions represent just 36% of the total revenue of Jewish not-for-profit groups. Meanwhile, 48% of the network’s revenue comes from program fees — a category that includes government contracts, payments from Medicare and Medicaid, and fees paid by those actually using the services in question. Another 7% of the revenue comes from outright government grants.

These statistics come from the Forward’s newly compiled database of financial information from Jewish charities that filed with the IRS in the 2012 calendar year. Most synagogues and rabbinical seminaries do not file with the IRS and are not included. A description of the Forward’s methodology in building its database is available online.

Given the uncertainty as to how much Jewish charities grant to other Jewish charities, the Forward used a low estimate for total contributions received in a year — $4.6 billion — to calculate the proportion of revenue that came from each source.

Government Subsidy

The vast waves of government funds sweeping through the Jewish charity network have reshaped the Jewish community’s charitable institutions.

Decades ago, a handful of Jewish social service and health care agencies in New York City relied almost entirely on UJA-Federation of New York to pay for their activities. “There was a point in time when the Federation provided a majority of the funding for some of these organizations,” said Ron Soloway, the New York federation’s managing director of government relations.

Now, some of these agencies are bigger than the federation itself, grown huge on government dollars. “With the advent of Medicaid and Medicare in the 1960s, much more government revenue became available to help the poor, the vulnerable,” Soloway said. “The organizations have grown appreciably.”


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