Philanthropy project puts teens in charge

Solly Hess, West Coast regional director of the National Conference of Synagogue Youth (NCSY), was looking for ways to get Jewish teenagers motivated about charitable giving last summer. With the help of Brandon Lurie, a YULA Boys student and NCSY regional board member, he came up with a project that would eventually make an impact on youth as well as the local Jewish community: the Teen Philanthropy Movement.

“People today have this [mistaken] impression of teens being apathetic,” Hess said.

A mere eight months since the project’s inception, students are celebrating the success of their charitable efforts, contributing $5,000 to four charities and connecting with the larger Jewish community in the process.

“The Jewish community really took notice of this project. They’re looking to the future now and are waiting to see what the next step of the project is,” Hess said.

To begin the Teen Philanthropy Movement, Hess and Lurie divided the 23-member student board into seven groups, with each group assigned the task of researching seven charitable organizations. The program was divided into a trimester schedule with three core stages: research, Torah and the finale.

The Dorothy Phillips Michaud Charitable Trust granted the Teen Philanthropy Movement $5,000, and Lurie said each group had to do in-depth research to decide which charities would need and benefit most from the money.

“In these troublesome economic times, many self-funded Jewish organizations have lost their thunder and are barely functioning with the money they have,” Lurie said. “That’s where we come in.”

The seven groups, which consisted of boys and girls from various local high schools, including Milken, YULA, Shalhevet and Hamilton, as well as SCY (Southern California Yeshiva) High and Torah High School of San Diego, all started off with an initial selection of seven charities each. The groups then met monthly, presented their charities to the larger student board and whittled their pools down to a single beneficiary agency. The finalists were known as the Chosen 7.

The second phase incorporated Torah learning. Students met with rabbis and other community leaders to learn about the role of tzedekah (charitable giving).

“The students built real relationships with their community representatives over the course of the program, while learning from them about philanthropy through the Torah in the process,” Hess said.

During the final trimester, the students learned firsthand about their chosen charities by visiting and volunteering with the organizations. Representatives from the charities also taught the seven groups about Jewish perspectives on philanthropy.

On Feb. 29, after three months of garnering a wealth of knowledge and experience, the students pitched their favorite charities to a panel of four judges, each active in
the Jewish business community — Leslie Kessler, Steve Bram, Rhoda Weisman and Joel Levine — at Young Israel of Century City during what Lurie called Decision Day.

“It was an unbelievable night,” Lurie said.

After the presentations, the judges were stumped.

In the end, the judges decided to split the $5,000 evenly among four charities: Camp Chesed, Shoes That Fit, San Diego Community G’mach and The Hero Project Holocaust Education Reach-Out.

One of most touching moments for the group came when one of the winning charities, Shoes That Fit, a Claremont-based charity that donates shoes to children, wrote a letter of thanks to the Teen Philanthropy Movement: “Because of this project, more children will attend school in comfort and with dignity, wearing shoes that fit. Our mission of providing new shoes to children in need for school would not be possible without the generous support of people like you.”

Hess says NCSY is looking to expand the Teen Philanthropy Movement.

“We want to get more high schools on board for next year’s project and eventually spread it out to the Bay Area,” he said. “A big boost to the project is Esther Feder, who has become chair of the Movement. As an experienced fundraiser and former chair of [the] Shalhevet High School [board], she’s going to be a real force in propelling the project to new levels of success.”

Hess added that it didn’t take much effort to sell Teen Philanthropy Movement to the teens, and he credits Lurie with helping to motivate them.

“Brandon Lurie has a passion for philanthropy,” Hess said. “Once I got his help, the rest of the team followed under his leadership. And we didn’t have to push the teams; they were motivated by their own desire to give back.”

Can you say fiduciary duty? Jewish nonprofits must follow new rules

Based on all reports, the evil criminality of Bernard Madoff has decimated the portfolios of hundreds of individuals and charitable organizations. The consequences for ongoing charitable programs and future gifts will be felt for many years to come.

While there should be no limit to the outrage at Madoff, the Jewish not-for-profit community must recognize that this crisis has highlighted grave shortcomings in professional controls in place related to the investment of their funds. Judging from press reports and public communications from numerous institutions, it seems apparent that the basic standards of fiduciary oversight were not in place. Both professional staff and lay leadership should undertake comprehensive reviews of their policies and take responsibility for their shortcomings.

Complete Madoff CoverageAs the community looks forward, it is imperative that the oversight of investments be executed in a manner that meets the highest fiduciary standards. After all, those responsible for overseeing the investments quite literally have the future of many of the most important programs in the Jewish community in their hands.

The large, often undiversified allocations to Madoff indicate that the foundations fell into the worst pitfalls that trap individuals into unwise investments. Among these are: lack of diversification, belief in “genius managers” who promise to deliver above market returns with minimal risk, not understanding the strategy of the funds in which they invest, investing based on reputation rather than doing due diligence and not monitoring the investment activity. While it is bad enough to find individuals who fall into some or all of these traps, to find evidence that those overseeing large sums for the community were no better is very disturbing, to put it mildly.

It also seems from this affair and my research on the investing policies of not-for-profits that many of these institutions joined with the fad of not-for-profits investing in “alternative investments.” Enticed by the success of Yale and Harvard’s enormous endowments they sought to “be like Yale and Harvard” and invest in hedge funds, private equity funds, venture capital, commodity funds and other products despite little real knowledge or professional staff. Yet even David Swensen, Yale’s esteemed manager, has written that neither individuals nor small institutions should follow Yale’s strategies since they lack the large professional staff and resources required to properly screen and manage such investments.Yale has 19 full time professionals overseeing their investments, Harvard Management has a full- time staff well over 100.

A Business Week article in May 2006, “Big Risk on Campus,” reported on smaller endowments investing like the big guys, noting that larger endowments (averaging $1 billion or more) had an average of 21.7 percent of their assets in hedge funds. In second position in the article’s table of smaller endowments with big hedge fund stakes was Yeshiva University’s $1.1 billion endowment with 65.3 percent. Yale’s allocation to hedge funds is 23 percent; Harvard’s, 18 percent.

Ironically, while many foundations concentrated on seeking out exotic, high-risk “alternative” investments, they did not look into allocating a portion of their investments to a better “alternative,” such as investments that would not have entailed above-average risks. Examples would include: socially responsible index funds, a broadly diversified index fund of Israeli stocks or investments in indices of companies investing in clean energy. The vast majority of foundations ignored the opportunity for “doing well by doing good” in their quest to find a “hot hand” to manage their money.

Looking forward, it is imperative that our institutions draft clear investment policy statements and establish appropriate policies and controls. Ideally, the foundations would wind up with an investment portfolio in line with the “best practices” of investment strategy and not much different than that of a prudent individual: broadly diversified with low cost, transparent and liquid index instruments.The parameters of such policies would include:

  • A target allocation for the portfolio among international and domestic stocks, bonds and cash, along with controls for keeping the portfolio within those parameters.
  • No investments in bonds below investment grade.
  • Restrictions on investments in asset- backed securities.
  • Restrictions prohibiting any investments that make use of leverage or derivatives.
  • Restrictions on investments in illiquid investments, such as venture capital and private equity, and on investments that do not have transparent pricing and valuation.
  • No investments in any entities affiliated with members of the investment committee, the board or the professional staff. As a consequence of this one policy, the New York Jewish Community Foundation had no investments with Madoff.
  • Ability to price all investments in the portfolio on a daily basis. Confirmations of all transactions by the next business day.
  • Transactional activity and financial reporting performed by different individuals.
  • Monthly performance reports available to all investment committee members.
  • Annual audit of all investments and procedures by an independent third party.

In addition to the above, serious consideration should be given to an even higher level of transparency: complete posting on the Internet of the full portfolio and its value and performance. Given the extreme lack of controls evidenced by the Madoff affair, such an easily implemented step would go a long way to restoring confidence in the community and in fact may be essential for any success in raising the funds necessary to keep many programs afloat.

Lawrence Weinman is an independent registered investment advisor working with individuals and institutions. He teaches a course on investment management for nonprofits at the AJU and has worked with Jewish nonprofits in their investment strategies. He blogs at

Pyramid power (not)

Report: illegal West Bank construction up; Phosphorous bombs used in Hezbollah fight

Report: Illegal West Bank Construction Up

Israel reportedly has suppressed a government report revealing large-scale settlement expansion in the West Bank. Ha’aretz reported Tuesday that a study conducted over the past two years found that settlements and outposts often have been expanded without government permission, and on Palestinian-owned land in the West Bank. The newspaper alleged that unnamed officials in the Defense Ministry’s Civil Administration have removed information on settlement expansion from a government database to obscure the extent of the construction. The Defense Ministry confirmed that a study had been put together, but said its contents were classified since it hadn’t yet been submitted to the Cabinet. The U.S. Embassy in Tel Aviv declined comment on the report, saying only that Washington expects Israel to keep to its commitments under the “road map” peace plan, which include a freeze on settlement expansion and the dismantling of illegal outposts.

Phosphorous Bombs Used in Hezbollah Fight

Israel confirmed that it used white phosphorous bombs during the war against Hezbollah in Lebanon. Ha’aretz this week quoted Cabinet minister Jacob Edery as telling a lawmaker that Israeli forces fired an unspecified number of white phosphorous shells at Hezbollah targets during the war. Security sources confirmed the statement. The material is designed to wipe out enemy emplacements by causing severe burns. Israel says it abided by international law, which bans its use against civilian targets.

Hamas Threatens More Kidnappings

“We will abduct more soldiers if Israel does not release Palestinian prisoners,” Palestinian Authority Foreign Minister Mahmoud Zahar, a senior Hamas member, told supporters at a Gaza Strip rally over the weekend.

Hamas was the main actor in a June 25 raid across the Gaza border in which two Israeli soldiers were killed and a third, Cpl. Gilad Shalit, captured. The Palestinian Authority has demanded that Israel release hundreds of Palestinian prisoners in exchange for Shalit. While Israel has formally ruled this out, a Hamas aide was quoted as saying over the weekend that it could relent soon. “Soon we will find a solution to the matter of the captive soldier,” said Ahmed Youssef, an adviser to P.A. Prime Minister Ismail Haniyeh. “Israel has voiced readiness to accept the Palestinian terms, which include the release of Palestinian prisoners.”

Report: Spy Heading U.N. Hostage Efforts

The United Nations reportedly appointed a German spy to help secure the release of two Israeli soldiers held hostage by Hezbollah. The German news magazine Der Spiegel reported Saturday that U.N. Secretary-General Kofi Annan made the appointment in September during a secret meeting with the unnamed BND intelligence agent in Madrid. According to Der Spiegel, the spy will lead behind-the-scenes efforts to secure the release of Ehud Goldwasser and Eldad Regev, whose abduction by Hezbollah in a July 12 border raid triggered the war in Lebanon. The BND, Germany’s foreign spy service, was integral to brokering a 2004 deal in which Hezbollah repatriated a captured Israeli businessman and the bodies of three Israeli soldiers in exchange for Israel’s release of hundreds of Arab security prisoners. Neither the BND nor the United Nations commented on the report.

Russia: Go Easy on Hamas

Russia’s foreign minister called for Hamas to be included in Israeli-Palestinian peacemaking efforts. Sergei Lavrov said in an interview published Tuesday that it’s unrealistic for Western powers to shun the radical Islamist group to get it to recognize Israel’s right to exist and renounce terrorism.”I have said repeatedly that asking Hamas to change its positions 100 percent is not realistic. We must look at what is possible,” Lavrov told the London-based newspaper Asharq al-Awsat. “Undoubtedly, Hamas, as the power that received a mandate from voters, must be a part of the solution and not the problem itself. As we know from our dealings with Hamas and its representatives, Hamas is ready to move toward common ground.”Russia broke with the United States and European Union by engaging Hamas politically after it won Palestinian Authority elections in January. The group has said it could enter a long-term truce with Israel but would never recognize the Jewish state.

Jewish Groups Among Top Philanthropies

U.S. Jewish groups are well-represented in The Chronicle of Philanthropy’s annual list of the 400 largest charities. The list in the publication’s Oct. 26 issue, which named the 400 U.S. charities that took in the most money from private donors in 2005, included 23 Jewish charities, down from 26 in 2004. The United Jewish Communities, the umbrella group for North America’s 155 federations, took in $333,824,000 and was the highest-ranked Jewish group at No. 34, while the United Jewish Communities of MetroWest in New Jersey was the last organization named on the list. The Jewish Communal Fund moved up the list to No. 54, after increasing its intake by 49 percent since the previous year, to $203,330,851, according to the chronicle. The Jewish National Fund made the list for the first time, coming in at No. 359. Three federations, Baltimore, Philadelphia and Washington, and the San Diego-based Jewish Community Foundation, dropped off the list.

Religious Rights Claimed in Bay Area Shul Battle

A northern California synagogue claims its religious rights are being violated as neighbors seek to block expansion plans. Congregation Kol Shofar, an 1,800-member congregation in Tiburon north of San Francisco, wants to add two wings to its existing structure for weddings and bar and bat mitzvahs. Hundreds of neighbors signed petitions objecting to the expansion, and the town planning commission denied the permit. The synagogue has turned to the Becket Fund for Religious Liberty, a national foundation that fights for religious freedom. Rabbi Lavey Derby told the San Francisco Chronicle that he doesn’t believe anti-Semitism is involved, but that not allowing the synagogue to expand will restrict its right to exercise its religion. The Tiburon Town Council will make its decision Nov. 15.

Campaign to Compensate Jewish Refugees

A campaign to gain restitution for Jews expelled from Arab countries in the mid-20th century was launched. The “International Rights and Redress Campaign” opened with a one-day summit in Jerusalem on Sunday attended by representatives of Jewish communities from 10 countries. Participants called for a campaign to document properties lost by an estimated 900,000 Jews who were driven out of Egypt, Iraq, Libya, Syria, Lebanon and Yemen after Israel’s founding in 1948. Most of the refugees ended up in the nascent Jewish state, while others immigrated to the West. One group, the World Organization of Jews From Arab Countries, has valued the refugees’ lost property at $100 billion, and wants a concerted effort to sue for reparations.

Briefs courtesy Jewish Telegraphic Agency.