A Kosher pyramid scheme
It’s simple yet elegant idea: 10,000 haredi households combine into a cluster. When a cluster member dies, the others give five dollars a piece to each of the orphans
In the haredi world, everyone is very familiar with the ornate leaflets which inevitably arrive with the weekend papers. Printed on high-quality colored paper, they usually bear dramatic titles, such as, “A Terrible Tragedy.”
Each flyer includes a heart wrenching story about a “young and pure kollel husband, who endured much suffering, passed away before his time, and left ten orphans and a widow with an empty refrigerator and no food to eat.”
In a society where most “young kollel husbands” have ten children and thus every death is in fact a tragedy of considerable proportions, the ubiquitous leaflets have become an accepted way to raise funds for the unfortunate widows and orphans.
Between life insurance and pyramid scheme
Yet, in recent weeks, a new initiative, called Areivim (“Guarantors”), has quickly taken the haredi world by storm and now threatens to banish the flyers to the dustbins of history.
The simple yet elegant idea is, in essence, a cross between life insurance and a pyramid scheme. Every 10,000 haredi households are united into a so-called “cluster”, with each cluster member signing a standing bank order which only takes effect in the event of a member’s death.
In that case, the deceased’s children receive five dollars from each of the remaining 9,999 cluster members. Thus, the orphans are guaranteed a respectable 50,000 dollars a piece and are not required to degrade themselves with demeaning public appeals for donations.
The arrangement, a joint initiative of assorted charity foundations, is being intensively promoted in haredi publications, and the response has been overwhelming. Less than a month after the project’s launch, the organizers report that the registration for the first cluster will end by Rosh Hashana. Incidentally, the eventual plan is to establish a total of seven or eight clusters.
It’s a match
Prior to the project’s launch, the initiators contacted several insurance companies to arrange a large-scale, sector-wide life insurance plan but were unable to reach a satisfactory agreement. Officials note that many haredi families are simply unable to afford monthly insurance payments. In addition, many haredim prefer to rely on Divine Providence rather than deal with insurance agents.
Areivim is, in effect, an inexpensive and simple life insurance plan. There is one catch, however. According to newspaper advertisements, the project is restricted to “kollel men who consider Torah to be their livelihood or working men who schedule set times for learning Torah, and their families, including widows and divorcees.” In other words, secular Israelis need not apply.
The plan stipulates that each and every orphan will automatically receive their due funds and that no family will pay more than a total of eighteen dollars a month. An anonymous donor underwrote the project’s operating costs; the biggest expense was the purchase of twenty-two telephones for the registration center.
The orphans receive the money – plus interest – on their wedding days. Thus, organizers hope to alleviate the orphans’ biggest concern: finding a suitable match.
In the haredi world, a woman seeking a Torah scholar for a husband must have enough money to purchase an apartment. Needless to say, most orphans do not possess even a tenth of this amount.
However, with 50,000 dollars under their belt, the orphans will be able to integrate into society and live honorably. Organizers promise that the process will be discreet and that participation will not affect the orphans’ social standings.
A hard-hitting advertising campaign has been unveiled in haredi media outlets. The same charity foundations that previously produced the schmaltzy leaflets have now set out on a crusade in favor of Areivim and against the old method.
One such ad declares, “Yes to foundations; no to flyers!” The text continues, “Publishing a family’s personal story in their own name? Including the deceased’s picture and writing that his children are crying for help? This sounds awful.”
“The advertising in the leaflets was very aggressive and included outrageous descriptions,” reports Eitan Dobkin, co-chairman of the haredi sector department of the McCann-Erickson Advertising Agency.
“Imagine if every day, Channel 2 would air horror stories about people you know. Charity officials realized that the donation system needed a complete overhaul, and they discovered a new way to provide people with a security net.”
Charity officials are quite pleased with the new plan. “We understood that something different was necessary,” an organizational director states.
“The flow of donations decreased. In the beginning, people were moved when they saw the flyers, but slowly, the enthusiasm disappeared, and only individuals continued to donate. When the idea for the project came up, we checked how many months the concern could work. We realized that it’s going to be successful; we received the rabbis’ blessings, and we started to work.”
All for one
On the haredi “street”, the Areivim plan has become very popular. Leading rabbinic figures – including Rabbi Yosef Shalom Elyashiv, Rabbi Aharon Leib Steinman, Rabbi Michel Yehuda Lefkowitz, the Belzer Rebbe, and the heir-apparent of Viznitzer chassidism - were photographed signing registration forms.
“I wish us all a long life, but there are, unfortunately, difficult situations that need to be dealt with,” says Betzalel Kahan, a Degel HaTorah activist.
“Each person who joins the program knows that if a tragedy should befall his family, there will be someone to help. It’s preferable to life insurance, because here the money goes only to the orphans, without any financial games and tricks, like in insurance companies. No one gets rich and makes a profit along the way. Instead, all the money goes to charity.”