Tuesday, April 11, 2017


In a recent article in ejewishphilanthropy Scott Shay focused on Jewish Foundation and endowment investment policies in The Boycott of Israel No One Is Talking Abouthttp://ejewishphilanthropy.com/the-boycott-of-israel-nobody-is-talking-about/?utm_source=Mar+9,+st all the values_campaign=Thurs+March+9&utm_medium=email  Shay, a leader in the investment community who has made a personal investment in Israel and in American Jewish continuity, decries what he observes as a failure of those Jewish entities to invest according to "Jewish values" in their focus strictly on maximizing the return on investment of donors' contributions. While I commend Scott on his incredible commitment, I think that he has looked through the wrong end of the telescope.

I understand that Jewish foundations and endowment funds have a responsibility to their donors to maximize investment returns. I have heard the pride, and read the sense of accomplishment, around the communal system as growth percentages are maximized annually. Yet, for many years, I have been concerned and disappointed with how those earnings are distributed; how funds are allocated. 

I recall a visit to a large community with one of the most successful (from a growth standpoint) Endowment Funds in North America. I met with its professional leader and, after studying the distributions, 77% of which went to beautiful secular institutions and programs, I suggested, more than half seriously, "why don't you just take 'Jewish' out of the Endowment name -- just rename it  'The________________
Jewish Community Foundation' to reflect the reality."  The response was direct: "It's probable that the Jewish community wouldn't receive even the 23% that it does were in not for this 'Jewish Community Foundation' being the fund managers."

We had an excellent discussion. This really great, pioneering professional described the "obligation" that Foundation leaders feel to allocate as their donors direct -- through Donor Advised Funds and even their Support Foundations -- and I inquired as to whether there was any sense of obligation to try to move the allocations to meet communal needs reflective of those "Jewish values" which Scott Shay addressed. At that time, a decade ago, the answer was no -- "we are bringing endowments into a 'Jewish' endowment fund that might otherwise be going elsewhere and just in doing so we make opportunities available to the donors to invest their funds in communal programs." 

I asked some wonderful leaders of major communal Endowments/Foundations how they reacted to Shay's provocatively-titled Op-Ed. Most opined that Jewish values are expressed by their donors' placing their dollars in a Jewish instrumentality but that those donors remain focused of the ROI as well as on determining the distribution of the income. One leader of a major Jewish community foundation and one who has thought deeply about Jewish values expressed through the endowment effort, offered:
"We are still trying to reason this through. We have increased our holdings in Israel bonds to seven figures. A few of our investment guys are trying to develop a Jewish social responsibility fund base on faith principles. We shall see." 
He concluded that Shay's mandate "[S]ounds good. Not so easy." And that from a professional leader who views the Foundation's relationship to community and communal values as the highest priority.

Scott Shay has stimulated discussion within the endowment and planned giving community; an excellent outgrowth of both bis speech at the JFNA 2017 Investment Institute and the ejewishphilanthropy publication. This is just the kind self-examination we should be doing in all areas of our organizations' philanthropic work. JFNA might be leading that kind of institutional introspection if it had a professional leader of its Endowment and Planned Giving Department and a functioning lay committee as it once did.

So, thanks to Scott Shay and may the reviews on-going in so many communities as to their investment policy extend to the other end of the endowment pipeline as well.

A person can still hope.


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