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Two Envelopes
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Jewish federations · one donor, one check
She gives $180 every fall, ten times chai (חי, "life"). Two envelopes sit on the table: one addressed to her local Jewish federation, one to the American fundraising arm of Israel's ambulance service. Tax filings let us ride along with both.
Rachel wants her gift to end up in Israel. The direct envelope goes to American Friends of Magen David Adom, which collects money here and passes it to the ambulance service there. The federation envelope travels a longer road: her federation's annual campaign sends it to the Jewish Federations of North America in New York, which sends it to the United Israel Appeal, which sends it to the Jewish Agency for Israel in Jerusalem, the organization that actually runs programs. Two organizations open the first envelope. Four open the second.
One rule governs the whole trip. Every organization that opens an envelope pays its own staff and its own fundraisers out of what it finds inside, then seals the rest in a new envelope and mails it on. Every opener also has to say what it kept, on a public tax return called the Form 990 that anyone can look up, so the whole trip can be measured stop by stop. That is all the arithmetic this essay needs.
From here down, the page runs in two columns. The direct envelope travels down the left side and the federation envelope down the right, and each row is the same moment on both routes, so you can read across at any point and compare them mid-journey.
Every opener keeps something. How much, and where along the road?
In the figure below, each bar is the envelope itself, drawn at full $180 width. The solid color is what is still inside. The lighter notch at the right end of the color is what the stop on that row kept, and anything gray beyond it was taken at an earlier stop. As you read down a column, the color shrinks; the row where it shrinks tells you who took the bite.
Watch the middle rows. While the federation envelope loses two more notches, at the national office and the United Israel Appeal, the direct envelope just sits in the mail with nothing taken. Those two famous middlemen cost less than seven dollars of the 180.
What each stop keeps is what it spends on its own staff, offices and fundraising, averaged over five years of its tax filings. Rachel's federation stands in for a typical one: half of the 146 keep more than it does, half keep less.
Does it matter whose name is on the envelope?
More than anything else in this piece. The first row above used a typical federation, but "the federation" covers 146 different first openers, and they keep very different shares. The two panels below share one ruler: every dot is one organization, placed left to right by the share of its budget that goes to its own staff and fundraising, so the farther left a dot sits, the cheaper that opener is. Blue dots on the left panel are the "friends of" organizations that raise for a single Israeli cause. Red dots on the right panel are the 146 federations. The dashed line in each panel marks the middle of that group: half the dots sit on either side.
The short gold bar at the bottom of the right panel is everything stops 2 and 3 take combined, less than seven dollars of Rachel's check, drawn on the same scale as the dots.
Notice how much wider the red cloud spreads than that gold bar.
Each dot is one organization, placed by how much of its budget goes to its own staff and fundraising, averaged over five years of filings. Both panels use the same scale, so you can compare across the gutter.
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How much of the check actually crosses into Israel?
Keeping is one way an envelope gets lighter. There is a second way: an opener can spend the money on real programs that happen to be in America. Federations fund Jewish education, campus work and community planning at home, and even American Friends of Magen David Adom runs some programming here.
Below, each column stacks the whole $180, and both stacks are the same height because every dollar ends up somewhere. Teal, at the base, is money that leaves as grants across the border. Gold is program spending that stays in the United States. Plum, on top, is what the openers kept. Compare the two teal bases first.
Where the whole $180 ends up, following each route's own filings over the same five years.
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Does the federation even mail it the long way?
Mostly it does not, which comes as a surprise after all this arithmetic. When federations designate money for Israel and overseas, most of it skips the relay. In the right panel below, each bar is a destination for those designated dollars: the red bar is money handed to the national office, the start of the long route, and blue bars go straight to an operating organization, on roads no longer than the one Rachel could take herself. The left panel needs no chart at all.
Where the dollars federations earmarked for Israel and overseas actually went, over the same five years.
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When the war came, which envelope did donors reach for?
October 7 turned this from a slow comparison of percentages into an urgent one. The fairest test uses only the organizations whose books close in December, so both groups are measured over the same three months of war. In each panel below, the pale bar is the money raised in calendar 2022 and the colored bar is calendar 2023, which contains October 7 and the weeks after. Both panels share the same dollar scale, so the bars can be compared straight across the gutter.
Money raised in calendar 2022 and calendar 2023 by the organizations whose books close in December: 9 direct organizations, 79 federations.
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On delivery alone, the direct one. It arrives $8.21 heavier at the door, about $31 heavier counting only money that crosses the border, and its fleet moved four times faster when the war came. If Rachel's only test is how much of her $180 reaches Israel, the left column wins for a typical pairing of doors, and on the border test the margin is wide.
The federation offers things that comparison cannot price. A typical federation gift is split among 36 organizations rather than one. Nearly half of what federations send the Jewish Agency, $65.4 million of $145.6 million in 2023, arrives unrestricted, money the Agency can move to wherever the need turns out to be, and no friends organization sells that. The long route can also be audited all the way to published accounts in Jerusalem, while the short route to Magen David Adom ends at a door with no books a donor can read.
Both envelopes buy something real. One buys a single cause at a lower cost, with the paper trail sometimes stopping at the water's edge. The other buys a portfolio and a community's judgment about where need sits, for roughly eight extra dollars on a typical $180 gift, and more than that if the federation on the envelope happens to be an expensive one. Before sealing either envelope, the number worth thirty seconds of looking up is the first opener's share, printed in a public filing, because that single choice moves five times more money than the length of the route ever will.
How this was built: federation figures come from federations.db, 2,335 IRS Form 990 returns filed by 265 federation entities, tax years 2014 to 2025, trimmed to 146 federations with more than $500,000 in pooled contributions. The direct fleet is 18 American organizations raising for Israeli causes, read one Form 990 at a time; the two pure conduits are shown but held out of fleet statistics. The share kept is Part IX line 25, columns C and D over column A, as filed. Figure 1 charges each route every stop on the American side plus the Jewish Agency, whose 11.73 percent comes from its own filings.
What is not measured: whether an expense labeled management really is one; whether the allocation process makes better choices than a donor would alone; and the Israeli end of every direct route except Yad Sarah's. About 27 percent of federation grant dollars go overseas, so this piece follows a dollar the federation designates for Israel, a designation rather than the default. Donations are about 7 percent of Magen David Adom's income, which runs mostly on service fees and Israeli government money, and its American friends appear to deliver much of their support as ambulances and buildings rather than cash. That is a different transaction from the one an overhead chart describes, and neither of these routes should be read as the only honest way to give.
The paper behind this story
Tell me who you are and where you work. I’ll send the complete paper.
Sent to the author directly. No list, no forwarding, no third parties.
Ḥeshbon
A data project on how Jewish life is paid for, published in full. Every figure comes from the underlying research, and where a chart simplifies a published result the piece says so.
Each piece here is published, with its own sources, sample sizes and limits stated in place. Percentages describe the samples observed, and several rest on small denominators, noted where they appear. Nothing here audits an individual institution. Aliyah figures are current as of August 2026, at roughly three shekels to the dollar, and Israeli tax and benefit rules move faster than that.