L’Vanecha Trust – Starting a Conversation about Jewish Continuity Insurance and Day School Affordability
Most of us now realize that it is more accurate to see Jewish education for our children as a critical community resource that is being priced out of reach for its own community. A more structural perspective, one that sees the issue as an affordability gap, will change our approach to problem solving.
by Michael Bentley
The one who scavenges the leftovers that fall from his own table becomes better fed than the others for a little while. But he also forgets how to eat from the (main) table; and so the supply of leftovers comes to an end.
Significance of Day School Affordability for JCPs
By now, the very mention of day school affordability conjures up the image of a hungry hippopotamus, with its wide-open mouth able to gobble up hundreds of millions of dollars, even billions, from no viable source, and with no end in sight. But the magnitude of the problem can blind us to what really is at stake and our real menu of responses. Even if the day school movement were to receive huge new infusions of money, our children’s Jewish educations will still depend on parents’ commitment and significant sacrifice, and still require a deeper re-negotiation of how we handle the finances of Jewish continuity at the grass roots.
By viewing the Jewish American community as an ecosystem, borrowing conceptual tools from sustainability engineering, and then using statistical modeling to redistribute cost and risk, we can find a manageable approach to rebalancing some of the financial stresses of the day school movement using what are, more or less, available resources.
Our focus here is on day school affordability for Jewish Communal Professionals (JCPs) and this issue’s implications for the broader community. Despite the sometimes-reasonable salaries we pay many of our JCPs, almost all JCP families, particularly those with two or more children, qualify for tuition aid if they apply to day school.
The families of our JCPs may, indeed, be serving as “canaries in the mineshaft” for the future of a healthy and pluralistic Jewish American community as a whole. For if our Jewish institutions are unable to lead their stakeholders to an understanding that the health of the whole American Jewish community depends upon working together to support a healthy, broadly-accessible, and demographically significant mass of day schools, what we can look forward to will be a Jewish American future dominated by what the recent Pew study refers to as “Jews of no religion” – a presence of some kind, but not a community. An acid test of broad access will be day school affordability for JCPs.
An Unstable System
The very concept of “tuition aid” frames affordability first as financial inadequacy at the level of the individual family, and second as a problem to be dealt with at the level of the individual school. Most of us now realize, however, that it is more accurate to see Jewish education for our children as a critical community resource that is being priced out of reach for its own community. A more structural perspective, one that sees the issue as an affordability gap, will change our approach to problem solving.
Next, let’s consider the dynamics of the Jewish community as ecosystem. Our communal organizations are regularly, happily, deeply connected to, and depend on, one another. At the risk of stating the obvious, we see this institutional interdependence play out when Jews develop Jewish cognitive skills early in life, such as Hebrew language facility and a rich connection to their Jewish identity and the state of Israel. A disproportionate number of these individuals then become the backbones of our congregations, marry within the Jewish community, and become critical components of the financial and organizational health of all core Jewish institutions.
Despite this interdependence, many communal organizations tend to see the Jewish education of the children of their professionals as a private matter, something decided and funded within the JCP family. This is particularly true outside our Orthodox communities. As is the case with many sustainability questions, when a single institution makes the easiest choice for itself in the short term, it may fail to consider the cumulative consequences of this decision, even for itself, as the same logic iterates itself across its community. To illustrate this, consider the example of any major American Jewish population center. There may be a couple of dozen, or more, Jewish communal organizations (synagogues, Jewish foundations, institutions of higher learning, nonprofit service organizations, political organizations, Jewish retirement communities, etc.) each employing JCPs; there are, however, typically only a handful of day schools. Each JCP negotiates his or her family’s various tuition packages with each individual school.
When a significant number of communal organizations funnel the cost of the affordability gap for their JCPs on to day schools, they inadvertently amplify the already significant stress on annual giving campaigns, tuition price, program quality, and tuition assistance for everyone involved. This also adds to the pressure limiting teacher compensation, even as tuition prices continue to grow faster than general inflation. It is more than a simple problem of irony that for the JCPs who educate our children, the affordability gap is growing even faster than for most other JCPs who work in better-paying institutions.
But there’s more. Even while too many of our JCPs are priced out of day schools entirely, the children of JCPs who remain in day schools may come to represent a larger fraction of total enrollees, because the overall number of American Jews who feel strong connections to Torah, synagogue membership, and the Hebrew language continues to decline. This further concentrates the financial stress. Bad enough when a day school closes down, but the failure of a school also feeds the vicious cycle because it increases the asymmetric ratio of communal organizations to day schools yet further. And so on.
How much longer can this pattern continue?
And beyond the economics, at what point do we risk treating our JCPs as instrumentalities rather than as whole Jews, integrated people who, we hope, may also be mothers and fathers with a need to observe the commandment of Jewish continuity?
Surely our synagogue and foundation trustees, not-for-profit boards, and other Jewish leaders do not intend to transfer the environmental impact of their professionals’ financial aid requirements onto the shoulders of the struggling day school movement. Indeed, many of our leaders are themselves proud products of day school, have been day school parents, and are donors to day schools.
On our doorposts we affix mezuzot containing the words “v’shinantam l’vanecha…” – and these words (of Torah)… you shall teach your children (Deut. 6:7). Can we really remove the mezuzot from the doorposts of our missions, from the doorposts of the rooms where we meet as trustees?
Jewish Continuity Insurance – L’Vanecha Trust
Is it possible, then, to find a structured and moderate mechanism by which Jewish communal organizations can accurately quantify, plan, and offset the cost of claims by their JCPs on the day school financial aid system? And can we build a community consensus on how a fair system should work?
I suggest that we develop a new communal mechanism, for the purposes of this article called a L’Vanecha Trust. This trust would use the risk smoothing and actuarial techniques of the insurance and pension industries to create a moderate, distributed, and plannable cost structure for supporting the financial aid portion of day school tuition.
Jewish communal organizations that opt in to the trust would pay a premium each month, based on their number of employees. The premium price would reflect the actuarial cost of day school financial aid per employee in any given year. Ideally, this would cover a statistically normative cost of financial aid for all children of JCPs of the organization. Financial aid for participating JCPs would then be supplied to the schools by the trust.
The goal of the trust would not be to pay the whole cost of day school tuition for participating JCPs; it would rather offset the financial aid portion of tuition for JCPs that is now being covered by day schools themselves.
For the day schools, in a fully funded model, this would mean that every child of a participating JCP would pay full tuition. At a minimum, the fund would support a greater number of JCP children at full tuition. Inevitably, this would also drive higher enrollment.
For larger organizations, the premium might be calculated based on the experience (cost history) of that organization. For smaller organizations, the trust might use the model of assigned risk to calculate the premium. Some organizations might find it cost-effective to participate through a Jewish umbrella association. Keep in mind that many employees will not be day school parents during the period of their employment, and that highly compensated (or the occasional independently wealthy) employees with small families will need substantially less aid. These factors would result in lower premiums.
For the JCPs themselves, the trust would offer more predictable, transparent, and more affordable financial aid than the tuition programs to which most now have access. For “middle income” JCPs, it should be possible to adopt a more transparent scheme based on the model of the iCap program from the Solomon Schechter Day School of Newton, Massachusetts, which caps a middle-income family’s tuition at approximately 15% of gross income regardless of family size. For lower income JCPs, particularly teachers, we should be able to develop more complex schemes that should nonetheless usually represent an upgrade.
For the Jewish community at large, the first win is the sustainable stewardship of day schools as a communal resource. The second win is qualitative: the whole community benefits when a talented and committed Jew at the beginning of her or his career can look forward to the partnership of their community in the education of their children. How much does it limit our access to Jewish talent when the decision to become a JCP (instead of an investment banker, etc.) creates economic conflict with sending one’s children to day school?
In a fully funded model, JCPs from participating communal organizations would apply for financial aid directly to the appropriate financial aid committee within the trust. The trust would then determine the tuition capacity of the family in much the same way it is determined now, and would make payments directly to the affordability program at each school.
The goal is not to create a new “lifestyle” benefit for JCPs. Almost all day school families are making significant values-based trade-offs that prioritize education over many of the luxuries of affluence. Substantial sacrifices by many JCP families would remain. We will all continue to be in this together.
Lest the trust itself become another hungry hippopotamus, its design must tolerate partial, scalable participation for communal organizations.
Not all organizations that want to participate will be able to begin by including all employees. An employer might seek to limit its costs by imposing eligibility requirements, such as length of service, salary level, or even some form of lottery. That said, if a communal organization with hundreds of employees were able to support even a limited number of day school slots under the trust, this would “move the needle” financially for its area day schools.
If the basic mechanisms of the trust prove to be healthy, employer participation will grow over time, accompanied by a growing consensus in the community.
The institutional agenda of the trust starts with the multi-year support of children, parents, and the institutions we use to build continuity. The hope is that it will be possible respect the agendas of communal employers who opt in to the program (or they will be less motivated to join) but that it would remain feasible to maintain parental choice at the center of the decision-making process for each family.
The trust itself should be primarily concerned about being a service provider, and would need to work to avoid becoming a power player or enforcer of the status quo.
Credibility within the community is the essential ingredient. The trust would need to be able to accommodate segregation of assets and risk into matching portfolios, show its administrative costs and payments to institutions, and meet best practices for transparency while safeguarding the privacy of family financial disclosure.
It would seem essential to house such a trust within a highly credible and competent organization such as the Federation or a major Jewish foundation. The trust would contain and insure its own liability, manage its own operations, and live out its mission, independent of the financial pressures of its host.
We have to hope that donors will supplement trust assets in order to ameliorate affordability for identifiable groups such as our educators, JCPs of a movement, etc.
The trust should also be able to offer one or more portfolios to individual donors in the community for performing the commandment of Jewish continuity beyond only JCPs. For Jewish donors without a connection to a specific school, such a portfolio (or product) would make it possible to offer donors the opportunity to make and see a difference in the education of a child, and even to endow a named day school scholarship, or partial scholarship, in memory of a parent.
An Intentional Ecosystem
This article seeks to start a conversation. I believe a pragmatic pathway can be found, that we can do better in the way we recognize and support day school access for our JCPs, while at the same time protecting our day schools from shouldering the financial burden of supporting this access by themselves. The costs will be significant but manageable.
In the end, however, the crucial element may not be money, important as it is, but leadership within our community. Over time, however, participation in a L’Vanecha Trust could become seen as a normative best practice of mature Jewish organizations. They might even proudly display a small logo of participation on key institutional communication, knowing that trust participation is also part of maintaining their own institutional sustainability and attracting the best Jewish talent.
In 21st century American diaspora, surrounded by both acceptance of Jews by our host society and assimilation, Jews cannot count on the logic of an externally bounded ecosystem to keep the community whole. Rather, to exist as a larger healthy community over the next generation, Jews will need to build an intentional ecosystem, both in our hearts and in the way we handle our finances, grounded in a broader understanding of shared enterprise, and committed to our next generation. The alternative is that we are likely to have no ecosystem at all.