How many hands does a charitable dollar pass through before it feeds anyone?
Freight companies call the expensive part the last mile: the stretch between the warehouse and the doorstep. Charity has a last mile too. We put $100 into a Jewish federation and followed it, using the tax returns of every organization that touched it, until it turned into a meal, a classroom seat, or a bed.
Start with the two words this piece runs on.
A federation is a city's central Jewish charity. It runs one fundraising campaign a year on behalf of the whole community and then hands the money out to schools, food programs, care homes, summer camps and causes abroad. There are 265 of them filing tax returns in the United States, one in most cities of any size.
A hub is any charity whose main activity is giving money to another charity. A last-mile charity is one that runs the program itself, which means it employs the people who do the work. A federation is a hub. So is a donor-advised fund. A nursing home is a last mile.
The reason all this is hard to see is that a tax return only ever shows one leg of the journey. A federation in Wisconsin reports that it gave money to an organization in New York. That is true, and it is the least interesting fact about the transaction, because the organization in New York gave it to an organization in Jerusalem, which gave it to the people who run the program. Each return is honest. Stacked, they hide the trip.
So we stopped reading one return at a time and followed the parcel.
Where does the $100 actually go? Follow it.
Below is the whole trip on one road, read like a page: left to right, drop down, right to left, drop down again. The road starts as thick as $100 and thins every time money leaves it. At each stop, green parcels drop off the bottom and have arrived somewhere that does the work. Orange parcels are what the stop charged to handle the package.
Scroll slowly and watch the road get thin.
Figure 1 · The road, hub by hub
Table view
What happens to the $100 in the first building?
The federation is hub one. The chart below is a single bar, the whole $100, cut into what the federation did with it. Read it left to right. The blue block is money that left the building as a grant to somebody else. The green block is money the federation kept and spent running programs itself, because most federations are not only grantmakers: they run family service agencies, campus security, elder care. The orange block is management and fundraising.
Look at how small the orange block is, and then at how much of the blue block is still moving.
Figure 2 · The first stop, and what it does with $100
Table view
Ten dollars and thirty-six cents is the honest overhead figure for the first hub, and it is lower than the sector's reputation suggests. It is also not the number that matters, because $26.74 has not arrived anywhere yet.
Where does the money actually go? The whole map, in one picture.
The chart below is the $100 splitting as it travels, read left to right. Every branch is a decision somebody made. The width of each block is dollars. A block outlined in green is money that has arrived somewhere that does the work and has stopped moving. Everything else is either still traveling or has been spent on the trip.
Follow the widest path first, then look at how the second column breaks into five.
Figure 3 · Where the $100 goes, branch by branch
Table view
What are those five hubs, and what does each one do next?
They behave very differently, so it is worth taking them one at a time. Each panel below shows a single dollar arriving at that kind of hub, and where the dollar goes next. Thicker spokes carry more money. A spoke ending in a filled dot has reached a charity that runs programs. A hollow dot means the money is still moving.
Figure 4 · One dollar arriving at each kind of hub, and where it goes next
Table view
- The national body (JFNA)
- The umbrella organization the local federations belong to. Communities pool money through it for things no single city funds alone. Two thirds of what passes through it goes straight back out to the United Israel Appeal.
- The United Israel Appeal
- A subsidiary of the national body with one purpose: move American money to Israel. It has named the Jewish Agency for Israel its exclusive operating agent and reports no salaries at all. It is a bank transfer with a board of directors.
- Another federation
- A federation in a different city, usually for a shared campus, a merger or an emergency appeal. The money then behaves like any other federation dollar and the whole map starts again.
- A US fundraising arm
- An American charity that exists to raise money for an organization abroad: the American Friends of a hospital, a university, an ambulance service. It does no program work in America.
- A grantmaker or donor-advised fund
- A foundation, or a provider such as Fidelity Charitable where a donor parks money, takes the tax deduction immediately, and chooses the destination whenever they like. There is no legal deadline, and the destination is not disclosed on the federation's return.
What does it mean for the money to have arrived?
It means the money has stopped being money and started being somebody's job. The clearest way to see that is the payroll.
The chart below is one bar per organization, and length is the share of everything it spent that went to wages. Nothing at the top of it should surprise you. A nursing home spends a third of its budget on staff because a nursing home is people: the money has become the wage of somebody who brings a meal or turns a patient. That is not a finding. That is the definition of the end of the road.
Start at the bottom instead.
Figure 5 · The charities with no employees
Table view
Payroll is not how the sorting in this piece was done. An organization counts as a hub here if it is another federation, if most of its money is booked in a grantmaking or donor-advised category, if it is a community foundation, or if it carries an American Friends style name and most of its money is coded as going overseas. Everything else is an endpoint. Payroll is the tell, not the test, and it is only decisive at the bottom of that chart, where it is zero.
So how far does the $100 travel, and what does the distance cost?
Each bar below is money that came to rest after crossing that many hubs, with the federation counted as hub one. Height is dollars of the original $100. The small orange number under each bar is what management and fundraising took at that stage.
Figure 6 · Where the $100 comes to rest, and what each hop costs
Table view
The reason extra hops are cheap is that the second and third hubs are not really organizations in the way the first one is. They are transfer desks. The United Israel Appeal moved $166m in its most recent year with no staff. Fidelity Charitable moved $10.5bn with no staff. A hub with no employees is cheap to pass through by construction.
That cuts against the intuition the freight metaphor invites. In logistics every extra depot costs money. Here the depots are nearly free. What the extra hubs cost is not money. It is sight.
Which communities send their money the long way round?
Each bar below is one city's federation, and length is the share of everything it gives away that it hands to the national body, the entrance to the longest road in the system. Blue bars are the larger campaigns, orange the smaller ones.
Look at which color is at the top.
Figure 7 · Share of a community's giving routed through the national body
Table view, all 75 communities above $3m
A small community does not run its own operation in Jerusalem, so it buys into a shared one. That is a reasonable thing to do, and it is why a town like Allentown can report no overseas giving whatsoever on its tax return while roughly a third of what it gives away ends up abroad. The road is not hidden. It is simply longer than the disclosure.
So where does the $100 end up?
Eighty-six dollars and ninety-seven cents reaches a charity that runs a program. Twelve dollars and sixteen cents is taken by management and fundraising along the way, and $10.36 of that is spent in the first building. Eighty-eight cents goes to an address nobody recorded properly. The average delivered dollar crosses 1.39 hubs.
Those are better numbers than the sector's critics assume and worse than its brochures imply, and both reactions miss what the exercise shows. The system is not leaky. It is opaque. Money passes through desks that cost almost nothing and disclose almost nothing, and the price of that is not the $1.80 they take between them. It is that the donor in Madison, the board in Allentown and the reporter reading the return all stop counting at the first hop.
The last mile in freight is expensive because somebody has to carry the box up the stairs. The last mile here is cheap. The part nobody can see is the middle.
How this was measured. The first hop comes from the spending pages of the tax returns of all 265 US Jewish federations and their foundation arms, 2014 to 2024. Of $39.06bn of spending, 75.9 percent left as grants, 13.75 percent paid for programs the federations ran themselves, 5.68 percent management and 4.68 percent fundraising.
The second hop comes from sorting all 26,430 recipient organizations into hubs and last miles. A recipient is a hub if it is another federation, if most of its money falls in a grantmaking or donor-advised category, if it is a community foundation or united way, or if it carries an American Friends style name and most of its money is coded as overseas. Everything else is a last mile. That last condition matters: without it, operating charities with American in their name, among them the Joint Distribution Committee, the American Jewish Committee and the American Technion Society, are wrongly counted as pass-throughs. By dollars, 63.7 percent of grants went to last-mile charities, 35.2 percent to hubs and 1.0 percent to recipients that could not be identified.
Later hops apply each hub's own reported behavior. The national body's split is measured from its own returns: of its grants, 78.0 percent to the United Israel Appeal, 16.1 percent to the Joint Distribution Committee, 3.0 percent other US charities, 2.4 percent back to a federation, 0.5 percent other overseas. It keeps 3.6 percent of spending for management and fundraising and 11.0 percent for programs it runs. The United Israel Appeal reported $173m of grants against $177.9m of spending in 2022 and no salaries, so it is modeled at 97.3 percent onward. The fundraising arms are modeled at 88 percent onward, from the payroll intensity of the largest of them. Donor-advised sponsors are modeled at 97 percent onward.
Four limits. This is a model of the average dollar, not a trace of any particular one, so it cannot tell you where your own gift went. It stops at the American border, so the Jewish Agency's costs in Israel and the Joint Distribution Committee's costs in the field are outside it, which means $86.97 is what reaches an operating charity rather than what reaches a person. A last-mile charity has its own management and fundraising costs, which are real and are not counted here as transit, because they are the price of the service rather than the price of the trip.
And the method cannot see time at all. Money sitting in a donor-advised fund has arrived at a hub and may sit there for years, because there is no legal minimum payout. Counted here, it has moved. In practice it may not have.
Where a judgment is arguable it is arguable in a known direction. Treating the American Technion Society or the Birthright Israel Foundation as a hub rather than a last mile is defensible either way. Each choice moves a few cents, not dollars.
