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Young Philanthropists Get Involved

When Jewish philanthropies imagine their ideal young donors, they probably have people like Anne Heyman and Seth Merrin in mind.

To say that the Manhattan couple — she’s from South Africa, he’s a New Yorker, they met in Israel — are involved in Jewish causes barely nicks the surface.

Heyman, 42, chairs the board of directors of Dorot, an Upper West Side group that helps the homeless and homebound elderly. Merrin, 43, sits on the board of the Jewish Television Network. Their children attend a Jewish day school. They endowed a scholarship to Merrin’s alma mater Tufts University and donate to the school’s Hillel chapter.

Merrin found fortune when the financial firm he started was bought out six years ago by ADP. He is now chief executive officer of Liquidnet, an online brokerage service for institutional investors.

Why the emphasis on Jewish giving?

“A lot of that has to do with a feeling that it’s important to take care of your own,” said Heyman, a lawyer who stepped down from the bar to ride horses. But, she added, “you need to do more than just take care of your own. If we had more we would do more, but it’s a good place to start.”

For many young Jewish philanthropists, if not most, giving is an obligation, but it’s time-consuming. That’s why Heyman and Merrin turned to the Jewish Communal Fund, a sort of one-stop philanthropy that lets them funnel money to groups of their choosing.

The Manhattan-based organization, which requires an initial gift of $10,000 in cash or securities, is part of a “donor-advised” fund, which falls somewhere between an umbrella group like the United Way and an individual nonprofit. The Communal Fund gave out about $167 million in grants in 2002, the second-largest amount of all but one donor-advised charity in the United States, according to a new survey by the Chronicle of Philanthropy called the “Philanthropy 400.” Last year the group raised more than $143 million.

According to Susan Dickman, the fund’s executive vice president, “young donors tend to give to community-based institutions” — day schools, the United Jewish Appeal, synagogues, hospitals, mentoring organizations, parks projects, community centers and other common spaces. The unifying theme, Dickman said, is straightforward: “Young people are trying to establish themselves in their communities.”

Amy Mitman, director of leadership resource development for the Combined Jewish Philanthropies of Greater Boston, agrees with Dickman. She also points out that philanthropic endeavors provide young donors with a means to socialize, network or even find mates.

Most of the Communal Fund’s young big-figure donors make their money on Wall Street, Dickman said. That’s not surprising, since doctors and lawyers — who might otherwise be expected to give large sums to charity — are often saddled with substantial debt into their 30s. “Not until lawyers become partner are they able to be in a position to [give great sums],” she said.

The bruised economy has made a deep dent in many philanthropies’ coffers, driving total charitable giving down in 2002 for the first time in 12 years, according to the Chronicle of Philanthropy report.

Prior to the stock swoon, for example, 65% of the Communal Fund’s grants came in the form of appreciated shares, the rest in cash. In 2002, those proportions flip-flopped, with cash constituting nearly two-thirds of the balance. This year is shaping up to be about the same as last year, Dickman said.

“A lot of the young people that came to us had appreciated stock that they gave to us,” Dickman said. “That sort of dried up.”

One way that young givers break with family traditions of giving is in their level of involvement. “My sense is that younger people to a greater extent approach their philanthropy as they approach their investment strategies,” said David Mersky, an expert in Jewish philanthropy and fund-raising at Brandeis University’s Hornstein Program in Jewish Communal Service, in Waltham, Mass.

Some particularly enthusiastic donors like to call themselves “venture philanthropists,” a nifty term that threatens to melt from irony under close inspection.

To be sure, dealing with more involved donors has its headaches. But most charities would agree that having committed, young blood to sit on boards and spearhead fund-raising drives is worth the effort.

Mark Gerson, 31, considers himself a member of the new breed of givers. “I’m very hands-on. I try to think of philanthropic giving as a businessman. You identify where the need is greatest, marshal scarce resources and give them in the most leveraged possible way,” said Gerson, co-founder of Gerson Lehrman Group, a New York City-based investment research firm with some 80 employees.

A few clicks of a computer mouse and Gerson can rattle off the list of favored organizations in his Communal Fund account. They include Friends of the Israel Defense Forces, the Halachic Organ Donor Society and the conservative American Enterprise Institute think tank. Most of his charities of choice are affiliated with Jewish causes and concerns, but he also gives to the Christian relief organization run by evangelist Franklin Graham, Samaritan’s Purse, which funds a clinic in Kenya where a college friend of Gerson’s works with AIDS patients.

This year, Gerson set up an account for his 28-year-old brother. “I think it’s a great gift to seed someone with an account,” he said.

Another generation gap might be more nettlesome to charities. “Young people, much to their parents’ dismay, are generous, but not necessarily to the things that their parents are generous to,” Mersky said. “If their parents support the Anti-Defamation League, it’s generally true that the children will look elsewhere.”

Jewish-centric charities may also find themselves struggling against another demographic trend. Young Jews simply don’t give as “Jewishly” as their parents did, Mersky said. “That’s partially because there are a lot of non-Jewish entities where they can give money, whereas for their parents that wasn’t the case.”

Between 1993 and 2002, the number of 501c3 nonprofit organizations jumped to 909,000 from 575,000, an increase of nearly 60%. As a result, secular and arts philanthropies are facing fierce competition with religious groups for money.

Yet if umbrella groups in general are battling the odds, UJA-Federation of New York isn’t among the wounded. The charity moved from 68th to 51st among the nation’s largest philanthropies last year, based on funds raised from private donors, according to the Chronicle of Philanthropy survey. That’s impressive for a local organization. Its 2004 campaign kickoff last month raised $34.6 million, up $2.5 million from the previous year.

Paul Kane, vice president of UJA-Federation of New York, says young donors are helping fuel the charity’s recent success. “We’ve positioned ourselves well with younger people,” Kane said.

Kane agrees that younger donors expect more out of their philanthropic experience than merely signing checks. “There’s certainly a segment of younger people who want to follow their money,” he said. To that end, UJA-Federation has launched a venture philanthropy fund that lets donors target their gifts while preserving the overall mission of the umbrella.

So far, nine couples, all 45 or younger, have signed up for the program by making a three-year, $150,000 commitment. Their grants have gone to support Russian Jews in the Bensonhurst section of Brooklyn, Avodah: The Jewish Service Corps and “lots of stuff in between,” Kane said.

Roger Bennett, vice president of the Andrea and Charles Bronfman Philanthropies, is helping set strategy for a group of young funders — there are now 28, all younger than 40 — “who are coming together to define their own values and visions for doing Jewish philanthropy.” He also works with young board members of family foundations, ages 19 to 27, doing the same. These are seriously deep pockets who prefer to remain anonymous, Bennett says, but whose foundations command upward of $500 million in charity combined.

In general, Jewish family funds are now in their third generation, Bennett says. The first, the grandparents, were “great supporters of the institutions and issues,” he said — gathering of Jewish exiles, for example, or fighting antisemitism. Their children continued that support but added education, health and more universal themes to the list.

“This generation, the third, nobody knows exactly what’s going to happen,” Bennett said. “It’s a real moment of opportunity. Young Jews are asking themselves about their Jewish identity in general. How can they give in a way that adds value to their life?” This generation is especially interested in forging its own Jewish identity through giving. “But the challenge for the [philanthropy] community is to listen.”

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