The Wall Street Journal last week publicized the names of those who had joined “The Giving Pledge.” This initiative, spearheaded less than two months ago by Microsoft founder Bill Gates and his pal, America’s greatest investor, Warren Buffett, asks all of the billionaires of America to donate “the majority of their wealth to the philanthropic causes and charitable organizations of their choice either during their lifetime or after their death.”
To date, forty have signed up. “Many of the names already were known,” wrote Robert Frankel in the Journal. “But the list also includes some notable new ones,” adding that “the list could become a strong financial force for philanthropy, if for no other reason than peer pressure, publicity and the inspiring example of others.”
Jews, religious Jews in particular, don’t need to look outside their own circles for inspiration or direction when it comes to charitable giving. We are, as the Sages put it, “compassionate, the children of the compassionate.” The mitzvah of giving charity is ingrained in us from a young age; even Jews who are not wealthy give charity, understanding that it’s a priority of Jewish living.
But a disturbing trend seems to have developed recently, if Dr. Marvin Schick, president of the famed Rabbi Jacob Joseph School in Staten Island, New York, is to be believed. Writing in The Jewish Press, Dr. Schick laments “the message that basic Torah education is not a tzedakah priority.”
I don’t want to quote Rabbi Schick out of context; obviously he knows about all the yeshivos and kollelim, both here and in Eretz Yisrael, which are supported by philanthropic individuals. What he is lamenting is the lack of a comprehensive funding model for Jewish day schools.
The most obvious reason for this is that the Torah education of children is an obligation, first and foremost, of their parents. Why, a philanthropist might argue, should my tzedakah dollars be spent on people who ought to provide for themselves? Priority is therefore given to causes where poverty “can’t be helped.”
Seemingly overnight, however, we are faced with a “tuition crisis.” The rising cost of yeshiva education (brought on to a large extent by good developments, such as limited class sizes and higher wages for mechanchim), coupled with factors such as the higher costs of housing in the frum community and the current economic downturn, has pushed the tuition issue to the fore. For most families, tuition is the single largest after-tax expense they face.
In response, some communities – notably Chicago and Bergen County – have set up “kehillah” funds to begin the process of moving the financial burden of education from parents to the community at large. As noble as these funds are, however, the money they raise is a drop in the bucket. I am told that the funds offset tuition, in their respective communities, by approximately $200 per child – hardly a game changer.
If we truly have reached a breaking point in the financing of Jewish education, then something more considerable must develop.
The most substantial, dollar-neutral way of lowering tuition is to convert post-tax dollars into pre-tax dollars. There are two ways to accomplish this. The first is through school vouchers. This is something that has been, and continues to be, lobbied for, without success. And with the current budget deficits facing all state governments, it is unlikely that school vouchers will happen anytime soon.
The second way to convert post-tax dollars into pre-tax dollars is for charitable contributions to supplant tuition. A family now spending $40,000 annually on tuition would save in the area of $10,000 in taxes if that $40,000 was a voluntary contribution.
Naturally, this won’t happen.
While it may work out on paper, human nature being what it is, people aren’t likely to give voluntarily the same amount they are currently giving “forcibly.” Yeshivos have tried this in the past – asking parents to donate more in exchange for lower tuition – and it hasn’t worked. This is a grand shame, because without spending one dollar more than they currently are spending, parents could save, collectively, millions of dollars in every community.
My feeling is that the weak response to these restructuring attempts is due to the fact that they don’t lower tuition immediately. They simply function as a promise for the future. In the meantime, people actually end up paying more – this year’s tuition, plus a pledge for next year.
But what if the concept were tweaked somewhat? Then could it work?
This is where the Giving Pledge comes in.
What if a group of Jewish super-philanthropists in a community agreed to fund the entire day school budget of that community for one year? The money would be raised before the school year began, with the understanding that the heretofore tuition-paying members of the community would be responsible to replenish the funds by the end of the school year. If they don’t, tuition reappears the following year.
The parents would pledge to continue funding the kehillah with the same amount they had heretofore been obligated to pay via tuition. They continue doing this every year. If the money runs out, or even runs low, tuition comes back – and they’re spending the same amount, but forfeiting a valuable tax-deduction.
I would hope that the looming threat of taxable tuition would keep the donations coming.
Now, who’s ready to pledge?
CJ Srullowitz is a financial advisor in New York City, and blogs at www.luleidemistafina.blogspot.com.