Founding Funders: The story of how American Philanthropy built a Jewish Homeland
By Karl Zinsmeister
At times, philanthropy produces something bigger than just an institution or a program. In the case you are about to read, voluntary givers can be said to have created an actual nation. At its crucial stages of birth, growth, and survival under stress, Israel has depended utterly on foreign philanthropy.
Even now, as a stable and flourishing country, Israel continues to receive upwards of $3 billion every year in donations from Jews scattered around the globe. The lion’s share of this support comes from Americans. In a normal year, one out of every three Jewish adults in the U.S. will contribute money to some cause in Israel. In terms of dollars, around 8-15 percent of Jewish-American charity goes to the Promised Land. And during periods when the Jewish state was in crisis, contribution levels have soared much higher than that.
Giving by U.S. Jews has become much more individualized over the last generation. In the first few decades after Israel’s 1948 founding, most donations were collected through central funds run by regional Jewish federations that turned annual appeals into an art form. In the 1960s and 1970s, 80 percent of Jewish giving to Israel was going through the centralized federation system, says Brandeis researcher Theodore Sasson. Today it’s about 15 percent or less, as Americans have learned to donate directly to favorite Israeli groups.
In the pages following, I summarize some of the major achievements of this determined flow of contributions. The composite picture makes one thing clear: Without voluntary giving from Americans, the modern state of Israel wouldn’t be thriving as it currently is. And it might not exist at all.
RESETTLING JEWS TO A SAFE HOMELAND
When World War I broke out in 1914, there were about 60,000 Jews living in Palestine. Many were recent immigrants from Europe, and nearly all were destitute and dependent upon charity from other countries. During the war, the Turks who ruled over them cut off this outside aid.
When the U.S. ambassador to the Ottoman Empire realized that Jews in the Holy Land were facing a life-and-death crisis, his urgent telegram was not to Washington but to Jewish philanthropist Jacob Schiff in New York. American Jews quickly set up a committee to raise funds and deliver help to their co-religionists. When pogroms flared in Russia and other parts of Europe, the geographic scope of the aid was widened. Between 1914 and 1925 about $60 million in U.S. private donations were collected to rescue Jews in distress.
In 1917, Britain’s Balfour Declaration opened the possibility of a re-established Jewish state in Palestine. Major donors like Jacob Schiff, Felix Warburg, and Julius Rosenwald generally preferred that their funds be used to help besieged Jews find improved perches within their existing countries, rather than for emigration to Israel. But popular giving for Zionist purposes began in some U.S. synagogues and Jewish neighborhoods. The Kristallnacht rampages of 1938 brought new urgency to the cause of saving endangered Jews, and much more openness to the idea that resettling them in Israel might be the safest course. Spurred by the Nazi menace, about $125 million was raised in the U.S. from 1939 to 1945. That money was split between helping Jews in Palestine and assisting European Jews, including smuggling supplies into prison camps.
After World War II, American Jews sent a flood of donations to sustain their surviving brethren, relocate many of them to Palestine, and begin erecting the skeleton of a society that could sustain them. In the last few years of the 1940s, the United Jewish Appeal raised more than half a billion dollars. Its 1947 drive was called the Year of Survival, 1948 was the Year of Destiny, and 1949 had a Year of Deliverance theme. The $150 million donated by American Jews in 1948 – when the state of Israel was founded – was four times the total raised by the American Red Cross that same year.
With continuing assistance from American philanthropy, a million refugees were brought to Israel in the first decade after its founding. These people became the core of the new nation’s population. Nearly all of them arrived penniless and utterly dependent on outside charity.
Resettling displaced Jews in Israel continued to be a priority for American philanthropists in the decades following. When the Soviet Union crumbled, U.S. donors provided more than a billion dollars to whisk a million Russian Jews to the Jewish state. Even U.S., Canadian, and U.K. Jews (including occupational specialists like doctors) are now offered easy paths to emigrate to Israel, thanks to a charity called Nefesh B’Nefesh that was created in 2001 and boosted by an $8 million endowment from Houston natural-gas tycoon and philanthropist Guma Aguiar in 2009.
The American Jewish Joint Distribution Committee, which organized much of the original exodus to Israel, is still a thriving philanthropy today. In 2014 it spent $369 million to aid poor and threatened Jews overseas. Fully $119 million of that was spent in Israel. Jews in Russia or one of six other former Soviet republics received $153 million.
CREATING A MILITARY CAPABLE OF DEFENDING JEWS
On July 1, 1945, two months after Hitler committed suicide and Germany surrendered, 18 wealthy American Jews congregated in Manhattan in the apartment of Rudolf Sonneborn. He was a Baltimore-born oilman and Zionist who later married a granddaughter of Jacob Schiff. This group came together to meet with David Ben-Gurion, de facto leader of the Jews living in Palestine. British oversight of the region was in its last years, and it was clear there would be a struggle for control of the land. Ben-Gurion asked the Americans to start arming the Jewish militias in Palestine. Thus was the Sonneborn Institute created – functioning as a crucial American supply branch of the underground Jewish defense force, the Haganah.
Officially, the institute shipped materials like boots, beans, buses, and binoculars to pioneer settlers. The Exodus, the most famous of the ships that transported holocaust refugees to the Middle East, was purchased with Sonneborn money. In secret, the institute also scooped up surplus rifles, machine guns, half-tracks, and even three Boeing B-17 Flying Fortress bombers and smuggled them, through numerous embargoes, into the Promised Land. This allowed Jewish settlers to defend themselves when the 1947 U.N. plan to partition Palestine into Arab and Jewish states sparked Arab marauding. The violence ratcheted up after Israel declared its independence in 1948, and Egypt, Jordan, Syria, and Iraq sent military forces to crush the upstart state.
Fierce initial fighting led to a series of stalemates, and as the war continued, the number of Jewish fighters, and the quality and quantity of their equipment, began to surpass the Arab forces. American volunteers, many of them combat-hardened World War II veterans, also played important roles, for instance as pilots. By mid-1949, after the loss of 6,373 Israelis (about 1 percent of the Jewish population) and at least that many on the Arab side, an armistice was in place. The new Jewish state ended up controlling even more land than the U.N. Partition Plan had countenanced.
This peace, of course, did not endure. The Six-Day War in 1967 again matched Israel against Egypt (whose president said “our basic objective will be the destruction of Israel”) plus Syria and Jordan. As the clash unfolded, American Jews spontaneously donated more than $100 million in a little over two weeks – and three times that much by the time the emergency was over.
Six years later, when the Yom Kippur War opened with serious initial losses by the Israeli army, U.S. givers were even more generous, contributing $700 million in emergency aid. Seeing Israel in peril caused American Jews to respond “as though their own lives, their own families and their own homes, were immediately and imminently at stake,” commented the New York Times.
Today, Jewish Americans provide crucial material support that keeps the Israeli Defense Forces among the most formidable fighting units on the planet. Friends of the IDF, the American fundraising group that supports Israel’s soldiers, raised $109 million in donated funds in 2015. Prominent U.S. supporters include Seth Klarman, Haim Saban, Larry Ellison, Sheldon Adelson, Michael Dell, Dan Gilbert, and others. Jews “were not defended for centuries,” notes Gilbert, the founder of Quicken Loans, and today “the only reason Israel exists is because of the IDF.”
BRINGING GOOD MEDICAL CARE TO A DESERT
Baltimorean Henrietta Szold visited Palestine with her mother in 1909, and found her life’s calling. The sight of sick children and flyblown patients convinced her that she should take up charitable work to improve the health of local residents – Jews, Muslims, and Christians alike. Back home, she and a few other American women founded Hadassah as a women’s group focused on bringing modern medical care to the Holy Land. The organization would grow into one of the largest women’s organizations in America, and a fundraising powerhouse. It founded six hospitals in Palestine, and established the region’s first nursing school, first public-health programs, first tuberculosis clinic, first medical school, and first training regimens in social work, nutrition, and home economics, in addition to leading a massive orphan-adoption effort after World War II.
Nathan Straus, co-owner of Macy’s Department Store and a legendary American philanthropist with a special interest in medical charity, made his first visit to Palestine in 1912. Staggered by the disease he encountered, he funded a number of health programs and began to visit the country regularly. In 1929 he and Hadassah jointly opened the Nathan and Lina Straus Health Center in Jerusalem, which, after historic service, still serves patients today. Straus also funded a similar center in Tel Aviv, a Pasteur Institute, a bureau to battle chronic afflictions like malaria and trachoma, and a string of clinics for children. Hadassah eventually created Israel’s first dental school in Straus’s Jerusalem health center.
Other medical firsts in Israel funded by America’s Hadassah included the country’s first cancer institute, first trauma center, first intensive care unit for premature babies, first ambulatory surgery center, and first children’s hospice. Hadassah’s hospitals pioneered in Israel the combining of patient care with medical research. The organization continues to raise more than $100 million every year from U.S. donors, supporting two major Israeli hospitals with those funds and offering other assistance.
Many Israeli medical institutions have their own U.S. fundraising arms. The American Committee for Shaare Zedek, for instance, solicits broadly for donations that support one of the other major Jerusalem hospitals. Important contributions to the health of the Jewish state have also been made by large individual donors. Michael Bloomberg, for instance, created a mother and child center at Hadassah’s main hospital. He also donated millions of dollars to build up the emergency medical service in Jerusalem. Haim Saban helped fund a children’s hospital in southern Israel. In 2016, Bernie Marcus pledged $25 million toward a blood-services center that will partner with medical facilities across Israel.
Israeli nonprofits providing health care and social services to populations like the elderly, disabled, and at-risk children have been generously funded for decades by the Harry and Jeanette Weinberg Foundation. The Baltimore donor consistently grants about $20 million per year to charities in Israel, for everything from building construction to emergency assistance.
CREATING A TECH POWERHOUSE
The favorite cause of U.S. donors to Israel is education – which attracts one out of every five dollars given away. Universities get the biggest gifts. Charitable support for higher ed has been crucial in transforming Israel from a dusty, low-income, agricultural economy into a high-tech powerhouse. Israel is known today as the “Startup Nation,” and for good cause. Israeli companies – many of them spun out of universities – are leaders in important corners of software development, communications, robotics, cybersecurity, biotech, avionics, nanotech, and other emerging fields. Fully 46 percent of Israel’s exports are from high-tech industries. The economy is the most research-intensive in the world, with Israeli businesses spending a world-leading 3.5 percent of GDP on R&D.
The university whose R&D has incubated the most companies is the Israel Institute of Technology, known as the Technion. Created by a donation from New York philanthropist Jacob Schiff fully 36 years before the state of Israel even existed, the campus is home to powerful science, math, and engineering departments. The Technion is, for instance, one of just a few universities in the world where there is a student program to build and launch satellites. More than 70 percent of founders and top managers in Israel’s high-tech industry today are Technion graduates.
The American Technion Society is a major reason for the university’s pre-eminence. The society raises $70 to $100 million in the U.S. every year, and since its inception has transferred more than $2 billion to the Haifa-based institution to strengthen its faculty, facilities, and student body. Individual donors have made important contributions to the Technion, like the $26 million bequeathed by New York businessman Russell Berrie to launch its nanotechnology institute. Recent gifts from donors like Andrew Viterbi, Irwin Jacobs, Alfred Mann, Henry Taub, Isaac Perlmutter, and Stephen Grand have soared into the hundreds of millions of dollars.
Other Israeli universities have also benefited greatly from American largesse. In June of 2016, Howard and Lottie Marcus bequeathed approximately $400 million to Israel’s youngest major university, Ben-Gurion. This appears to be the largest private donation ever made to benefit any institution in the state of Israel. It will double Ben-Gurion’s endowment and intensify its research on water use – in a land where that is a crucial matter, with Israel already having the world’s highest rate of water recycling, top technologies for agricultural irrigation, and one of the biggest capacities on the planet for desalination of sea water.
Health sciences were the beneficiary of Sheldon Adelson’s 2014 donation of $25 million to Ariel University. That will establish a regional medical center for treating Jews and Arabs in the West Bank. The same year, Adelson granted more than $16 million to SpaceIl, an organization seeking to land the first Israeli craft on the moon.
Len Blavatnik gifted $20 million to Tel Aviv University in 2014. Morton Mandel and Daniel Abraham have both endowed business schools at Israeli universities, and the Mandel Foundation has made many large grants to Hebrew University and Ben-Gurion University. American philanthropy delivered over decades has been crucial in turning the Weizmann Institute for Science into one of the world’s top research organizations. And the funding and impetus to create Israel’s first U.S.-style liberal-arts campus – Shalem College, which was accredited in 2013 – came from Zalman Bernstein, the Tikvah Fund, Sheldon Adelson, David Messer, Seth Klarman, and other American philanthropists.
At the other end of the innovation pipeline, U.S. donor Paul Singer has put up more than $20 million to create Start-Up Nation Central, a nonprofit based in Tel Aviv. It connects international businesses looking for technical expertise to possible partners from among 4,500 Israeli companies in its database. Singer’s goal is to weave Israeli businesses deeply into global commerce.
ELEVATING ISRAELI CULTURE, ART, AND TECHNOLOGY
After the first decades when American donors focused on military survival, basic infrastructure, making the desert bloom, and otherwise assuring that Israel would survive as a viable nation, a favorite new arena for U.S. philanthropy to Israel became culture and art.
Nearly all major Israeli cultural institutions – the Israel Museum, Tel Aviv Museum, Bezalel Academy of Arts and Design, Yad Vashem Holocaust memorial – have American charitable arms. The major art and archaeology museum in Jerusalem has a deep roster of loyal U.S. backers who raise tens of millions of dollars for the institution every year through the organization American Friends of the Israel Museum. Overseas donations now cover more than half of the museum’s operating costs, and have allowed it to build up an endowment of over $200 million. The similar American Society for Yad Vashem is chaired by philanthropist Leonard Wilf, whose family has been supportive for years. The largest contributors ever to Yad Vashem are Sheldon and Miriam Adelson, with a pair of $25 million gifts. Cleveland businessman Morton Mandel gave $25 million to build a Jerusalem headquarters for the Bezalel Academy, and also $12 million for a new wing at the Israel Museum. And gifts from New England Patriots owner Robert Kraft include millions to create Jerusalem’s Kraft Family Stadium for sporting events.
Archaeology is an understandably strong interest of many donors to Israel. A massive dig at Ashkelon – one of the most important ancient seaports on the Mediterranean – has been supported by the late U.S. financier Leon Levy and his wife, Shelby White, every year since 1985. White also funds scholarship to interpret the dig’s findings. The Schottenstein family behind the American Eagle retail chain has endowed important archaeological work in Jerusalem. New York philanthropist Roger Hertog funded an excavation by archaeologist Eilat Mazar of what is thought to be King David’s palace, and provided resources for multi-volume scholarship to interpret and publish the Temple Mount Excavation.
TUGGING AT MINDS AND HEARTS
Though it takes many different forms, about a quarter of all Israel-related giving can be loosely categorized as “advocacy.” The most successful example of the past generation is Birthright – a program that sends young Jews from the U.S. and other Western countries to Israel on a ten-day fully paid trip so they can explore Judaism and their personal connection to the Jewish homeland. The brainchild of Charles Bronfman and Michael Steinhardt, who got things started by putting up $8 million apiece and recruiting 15 other donors, the program allows 50,000 young souls to experience Israel every year. More than half a million young Jews have so far made the pilgrimage.
Birthright’s biggest supporter has been Sheldon Adelson, who has bestowed nearly $200 million on the group. He adopted the cause in 2007 with a donation that eliminated the program’s waiting list, and continues to make large regular donations. The Jim Joseph Foundation, Seth Klarman, Leon Cooperman, Lynn Schusterman, Leslie Wexner, Roger Hertog, and others have also been important contributors. The program now has an extraordinarily wide base of 25,000 individual donors.
Birthright’s enormous success has inspired a similar program for students and recent graduates of Christian colleges in the U.S. In 2015, Covenant Journey began offering subsidized ten-day study trips to Israel, funded by the International Museum of the Bible and the Green family, and the Philos Project, an advocacy group backed by Paul Singer.
There are many other efforts to improve understanding of and sympathy for Israel. American donors like Haim Saban and Ronald Lauder have supported think tanks and advocacy groups toward this end. The foundation of retailer Leslie Wexner runs programs to connect policymakers in Israel and the U.S., and make Israeli officials more effective managers by offering them a Harvard master’s degree in public administration. In 2015, California homebuilder John Boruchin left a $100 million bequest for a new center to run exchanges between Israel and the U.S. involving students and faculty, young professionals, public speakers, and others.
Sheldon Adelson gives money to inform and influence public policy in Israel. He supports a core of scholars at the Jerusalem Center for Public Affairs. He donates to the Middle East Media Research Institute, which monitors and analyzes Arab journalism. And he launched, and reportedly sustains with tens of millions of dollars of annual subsidies, Israel Hayom – the largest-circulation newspaper in the country.
In 2012, Seth Klarman started a newspaper of his own in Jerusalem – the online Times of Israel. He and other U.S. donors like Paul Singer have provided substantial support to the Israel Project, which provides information to journalists and policymakers. The Jerusalem Institute for Market Studies has also garnered American funding for its respected studies of public opinion and of the economy. The think tank argues for less state intervention, in a land where the government controls 51 percent of the economy and the average citizen pays 58 percent of his income in taxes.
Perhaps the most respected and influential philanthropic effort to improve the quality of public policy in Israel is the Israel Democracy Institute, created by Home Depot co-founder Bernie Marcus. His founding gift built the institute’s headquarters, and continuing annual contributions cover much of the think tank’s annual budget of around $8 million. The Israel Democracy Institute has had many salutary effects on national life: improving public information, discouraging corruption, refining media criticism, creating Israel’s most important annual forum for discussing economic policy, and so forth.
The group’s deepest aim is to lay the intellectual foundation for an eventual Israeli constitution. “I’m a great believer in the rule of law, and until Israel has a constitution and a bill of rights, the rule of law is murky,” says Marcus. “No civilized nation doesn’t have a constitution,” he argues, saying his top philanthropic priority in Israel is to help the country become “a real, true democracy.”
Karl Zinsmeister is a vice president at The Philanthropy Roundtable and creator of The Almanac of American Philanthropy. David Isaac contributed research for this article.
This article was previously featured on PhilanthropyRoundtable; reprinted with permission.