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October 11, 2024
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Ominous Signs Ahead for Jewish Philanthropy

We are in the midst of an economic boom. Stocks have soared to unprecedented heights and 401Ks, IRAs and pension funds are flourishing. Tax cuts, deregulation, energy independence and restored manufacturing all have positively impacted the economy. Unemployment statistics are at all-time lows, corporate earnings are strong, tariff strategies to leverage foreign markets have been successful and the president and Congress approved and signed into law new trade deals that are harbingers of future economic growth.

All of this seems like good news and should result in generous increases in philanthropy in general and concomitantly for Jewish philanthropy in the United States. And yet, there are troubling signs ahead.

I was recently interviewed by a budding podcast superstar, host of the “Jewish Philanthropy Podcast” Rabbi Dovid Cohen, about future trends in Jewish philanthropy. You can listen to the full interview at http://jewishphilanthropypodcast.libsyn.com/norman-gildin-on-fundraising. During the podcast, I suggested that we need to address three areas that will adversely affect Jewish philanthropy.

1. Outmigration. California, Illinois, New York and New Jersey are experiencing major outmigration to the states of Florida, Arizona, Texas and Nevada. People are fleeing in droves. For example, Fox News recently reported that 900 people are leaving New Jersey every day. This translates to $1 million in lost revenue per day. This income is not easily replaced.

Furthermore, even if they don’t move they are remaining longer in warmer climates for reasons such as tax advantages, new social or business relationships and newly developed community ties. Also, as the baby boomers age, or reach retirement, they are more inclined to stay longer in the sun-belt and not return to states notorious for traffic gridlock, a higher cost of living, draconian tolls and a failing infrastructure. The Jewish community and philanthropy will especially suffer in these states as new charitable loyalties and allegiances are forged elsewhere. Jewish donors are taking their money somewhere else. Out of sight, out of mind.

2. Intermarriage. The trend in interfaith marriages in the Jewish world is troubling, as it also impacts Jewish philanthropy. According to the Pew Research Center Survey of U.S. Jews, “The proportion of Jews who say they have no religion and are Jewish only on the basis of ancestry, ethnicity or culture is growing rapidly, and two-thirds of them are not raising their children Jewish at all. Overall, the intermarriage rate is at 58%, up from 43% in 1990 and 17% in 1970. Among non-Orthodox Jews, the intermarriage rate is 71%.”

Why is this of concern? Among other reasons, Jewish philanthropy is affected. The concept of tzedaka is a deeply ingrained and integral Jewish value. This isn’t meant to denigrate the giving patterns of non-Jews, but to underscore that the giving of charity embedded in Jewish culture will falter.

Charitable diminishment also will occur as interfaith donors now giving to primarily secular charities replace formerly targeted Jewish charities. And as donors die, their giving is generally not being replaced by non-Jewish family members with any nexus to Jewish charities. Generations are beginning to shrink away.

3. The Millennial Challenge. Millennials are generally tradition oriented, tzedaka inclined and want to do the right thing. But, they are moving away from writing a blank check once used at the nonprofit’s discretion. These gifts covered operating deficits or annual budgets. Now they are earmarked to projects millennials deem appropriate. Special requests are made to give the money to a needy family or program, but not to operations.

Millennials sometimes consider gifts to the general fund as donations to a “bottomless pit.” As such, they don’t find it desirable to send their funds into an empty abyss. It causes CFOs to have knipshins since they need the money for operations and seek unrestricted funds. Millennials want to see the results of their gift giving. This will become more problematic in time. In some cases, restricted funds also can adversely affect third-party reimbursements.

Today, 80% of donations are still coming from baby boomers and only 20% from the millennials. But, 20 years from now there will be a major shift. The mllennials are catching up fast. Many of them assert new wealth in the financial industry as hedge fund managers, financial advisors and senior executives. Their decisions will surely influence Jewish philanthropy.

These are only three of the challenges facing Jewish philanthropy. If you are a Jewish nonprofit, are you ready for the jarring ride ahead?


Norman B. Gildin lived in Teaneck, New Jersey, for 34 years and fundraised for nonprofits for more than three decades, raising upwards of $93 million. He is the President of Strategic Fundraising Group whose mission is to assist nonprofits raise critical funds. He can be reached at [email protected].

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