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Jeffrey Epstein Has Tainted Jewish Philanthropy. Now What?

As reports surface about Leslie Wexner’s connections to convicted sex offender Jeffrey Epstein, Jewish voices from many different quarters are beginning to ask whether the Wexner name is tainted.

Over three decades, Wexner has built a philanthropic empire, funding a vast array of programs and institutions and building a reputation as a thoughtful and careful philanthropic leader.

In the Jewish world, the Wexner name has functioned like a brand, with three brief words — “I’m a Wexner” — communicating its incantatory power.

I should know. I have spoken them countless times to form a bond, build a network, open a door, or—I will admit it—try to impress someone. Each time I announced myself as a Wexner, I reinforced the brand: its vision of American Jewish pluralism and its big investment in an elite few to lead the way in living and expounding that vision.

Has the time come to drop the Wexner brand? My answer is no, but only because this response would replicate the problem of the brand and the brokenness of American philanthropy.

In the marketplace, consumers boycott brands to force producers to change specific practices. Presumably, if that change occurs, consumers will then reestablish their transactional relationship with the brand. Stop using child labor, and I’ll buy your chocolate again; move your factory from a particular part of the world, and I’ll wear your clothing again.

In the case of philanthropy, a boycott can function similarly to call out instances of misbehavior. For example, an institution says: We will no longer take donations from a particular source because we object to its conduct. If that entity is able to change and, in some cases, make reparations for its behavior, then it may rehabilitate itself in the eyes of boycotters.

However, when it comes to philanthropy, the boycott is an inadequate tool, and, worse, it may be a massive distraction. To be certain, a philanthropic family may lose face and cultural or communal power if its donations are rejected. In some cases, this can be fitting; an individual or family may have acted so heinously that any remedy must involve social ostracism.

But by focusing on individuals’ misdeeds as contaminants to the philanthropic system and by expelling such individuals as an act of purification, we miss seeing just how corrupt the system has become — and, in fact, we only replicate its damaged logic.

Over the last half century, the American philanthropic system has developed in lockstep with ever-growing economic inequality. Emblematic of the system are the very few family names that brand American Jewish life, allowing for a confusion between individual power and what should be rightfully regarded as public goods.

To boycott one of those families’ philanthropic donations is only to exacerbate the problem: We have created and fueled a system that over-empowers individual philanthropists at the expense of the public.

Fifty years ago, in 1969, when Congress debated a series of measures to tighten regulations on philanthropy, it considered time-limiting private family foundations. After a certain number of years — Senator Albert Gore (D-TN) first proposed 25 years, then 40 years — private family foundations would be compelled to spend down entirely or transfer their remaining funds into public charities. This measure drew outcry from pro-philanthropy lobbyists, who also objected to the spending rules and reporting requirements that Congress did manage to pass in its 1969 legislation.

Whether the measures enacted into law in 1969 curbed the power of private family foundations in some fashion, they do not appear to have stood in the way of the sector’s tremendous growth, reflecting and fueling a sharp increase in wealth inequality in the following decades.

Furthermore, public charities, defined by their broader base of support and categorically public purposes, gained opportunities to act more like private family foundations (for example, by holding donor-advised funds, which are segregated and individually-named accounts that donors can allocate when and where they wish, generally with little oversight from the sponsoring public charity).

Over the last fifty years, our philanthropic system has allowed individual philanthropists to gain inordinate public power, while all along being subsidized by an almost entirely invisible public. Through tax deductions and exemptions, the funds housed in private foundations and public charities amount to far more than any individual’s wealth. In some cases, almost half of those funds should fall on the public side of a balance sheet, when tax deductions and exemptions are fully calculated.

This means that, in truth, a partnership between Leslie Wexner and the American public funded my Wexner fellowship.

And yet, I call myself a Wexner because the philanthropic system makes us believe that the philanthropist — the individual — is in charge. This is the logic of the brand. And our current philanthropic system doubles down on this branded model of power by conferring myriad benefits, from favorable financial rewards to agenda setting power to the warm feeling of giving, to the individual.

As things stand, individual philanthropists stand to gain far more than their share. When they do good, they are perceived as doing good alone. In this way, they can also use philanthropy to leverage individual gain and status. We, the public, forget that they do not act alone; rather, they act with our subsidy and consent.

As a confirmation of the entirely individualistic system of philanthropy, when philanthropists err, we respond by worrying that their misdeeds have seeped into every dollar they have ever given, staining individuals and institutions.

The philanthropic system is broken because it confers outsized power to do good or to do bad to just a few wealthy individuals. This brokenness magnifies economic inequality, creating both the illusion and the fact of power consolidation, despite whatever economic redistribution could be achieved through philanthropy.

In American Jewish life, where few endeavors happen without philanthropic support and where thousands of programs and institutions have become entirely reliant on just a few family names, these systemic flaws have metastasized.

Federated giving models that once purported, at least, to involve a greater swath of Jewish voices in decision-making are steadily overwhelmed by the dollars and demands of just a few so-called megadonors, upon whose fortunes the fate of so many Jewish institutions rise and fall.

Instead of enacting a purity test to determine whether Wexner dollars are too sullied to flow into philanthropic channels, I suggest we reappraise the system.

If we continue to see philanthropy as an individualized system, we will also continue to surrender the power that we — the Jewish community and the American people — rightfully possess over it. We need not be submissive, capable only of reacting, if we start to own the power we deserve. Of course, should we claim our power, we will also be required to take responsibility for the direct and collateral damages caused by our philanthropic system. This task demands a far greater act of public reckoning than deciding whether or not to blackball a single philanthropist.

Lila Corwin Berman is a Professor American Jewish History at Temple University. She is the Director of the Feinstein Center for American Jewish History.


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