Chanukah came early this year for Hebrew Free Loan of New Jersey — or more precisely, for eight of its borrowers.
Last month, the Los Angeles-based organization Change Reaction donated $15,000 to pay off those borrowers’ loans.
“They asked us to submit stories of people who have been paying back monthly and owe three thousand dollars or less,” Malkie Ratzker of Livingston said. She’s the free loan organization’s director of loan services — and its sole employee.
The gift to the organization, housed with the Jewish Family Service of MetroWest New Jersey in Florham Park, was one of 10 that Change Reaction gave to Hebrew free loan agencies across the country.
Among the beneficiaries of the gift:
“There was a single mother who wept tears of joy when I told her her loan was paid off. She had been in an abusive marriage. She left with her child. We had given her a loan to help her about a year ago. She was making her monthly payments.
“There’s an elderly person who was living off of Social Security, who was using our money to help pay medical bills.
“We had a couple who used our money for in vitro fertility treatments. They had about $3,000 left to repay.
“We had a woman who was hit by a car, who took out a loan for physical therapy because she couldn’t go back to work.”
Greg and Jodi Perlman created Change Reaction in 2019. Mr. Perlman founded a $2.5 billion real estate company specializing in low income rentals. Change Reaction focuses its charity on gifts to individuals selected by partner non-profits, and on making no-cost loans available to small businesses. It has set up free loan programs in five communities across the country, from Los Angeles to New York, borrowing the charitable approach pioneered 128 years ago by New York’s Hebrew Free Loan Society.
The various Hebrew Free Loan organizations trace their roots to biblical times. As the Divine command in Exodus puts it: “If you lend money to my people, to the poor among you, do not act towards them as a creditor; exact no interest from them.”
But it was 10 leaders of New York’s Jewish community who created the organization’s template back in 1892. With the blessing of Chief Rabbi Jacob Joseph, the men pooled $95 to fund interest-free loans beginning at 50 cents. It was good charity — Maimonides famously declared lending to the poor as the highest level of tzedakah — and it was a good investment into the Jewish community. Repayment of the loans enabled the money to help again and again — and the ready capital helped the Jewish community prosper.
The golden age of the Hebrew Free Loan societies ended in the wake of the Great Depression, and subsequent banking reforms that made it easier for individuals to take out loans. But the organizations continued to do good work one loan at a time, even as other philanthropic programs attracted more attention and donors.
Ms. Ratzker hopes the gift from Change Reaction will spark new awareness of her organization, from both potential borrowers and potential contributors.
Already, she said, word of the Change Reaction gift sparked gifts from her organization’s board members, a board member’s son, and even one of her friends.
“It’s incredible how one good deed can ignite someone else’s passion,” Ms. Ratzker said. “It’s a mitzvah domino effect.
“In light of what’s going on, with so many people feeling alone and a sense of solitude and darkness, it was really incredible just to know that there are people out there whose sole motivation is to bring light and happiness to people.”
The Hebrew Free Loan of New Jersey started in Newark in the 19th century, not long after the New York organization was founded. After 60 years, it became inactive in 1955 — a time of Jewish material success and a strong philanthropic focus on helping the nascent State of Israel resettle refugees from Europe and the Arab world. In 1996 it reopened, funded by proceeds of the sale of the Hebrew Sheltering Home building in Newark. (The Hebrew Sheltering Home organization had been founded as “Hachnosis Orchim” in 1874 as a community shelter serving traveling salesmen and others in need of lodging.)
Since then, it has lent out more than $1.5 million to roughly 350 people.
“Right now, we probably have $240,000 in money that is being used by more than a hundred borrowers,” Ms. Ratzker said.
Her free loan society gives out loans for people “who are able to make their monthly payments, but suddenly came across an obstacle.” The loans might cover car repairs, credit cart debt, even home improvement, but “for the most part they’re medical and dental.”
One thing they won’t pay for is tuition.
Ms. Ratzker’s organization will lend up to $10,000 for general loans. But a couple of years ago the Free Loan’s board created a new fund to address couples having an issue with infertility. The “Building Jewish Families” fund gives out larger amounts. So far, it has issued two loans in that category, “and we’ve had two babies born, a boy and a girl.”
Last year, it created a new fund to help Jewish entrepreneurs begin or expand a business; “that gives out much larger funds as well,” Ms. Ratzker said. “So far we’ve given three of those.”
Ms. Ratzker said that “hardly anybody defaults on their loans. We have a 96 percent return rate. We have to do our due diligence, to make sure our money comes back so we have funds available to help all the people to come. People have to be able to pay back the loans.” And larger loans require a guarantor.
“We treat every borrower with respect,” she said. “If you don’t have the money for this month’s payment, call me.”
Around the same time that the Jews of Newark started their free loan organization, a similar group in Paterson started the Paterson Hebrew Free Loan Association. Since Temple Emanuel moved from Paterson, the association has been housed across the Passaic River in the river from Paterson in the Fair Lawn Jewish Center. Now, it’s in the process of of merging with the Florham Park-based organization, according to Frank Mirchin, its president. His father previously held the position.
“I’ve been a member for 40 years, and more active for the last 20,” Mr. Mirchin said. “I’m 68. I’m sure my father bought me a life membership as one of his birthday gifts along the way. Our source of funds was either donations or memberships. That source of funds has dwindled tremendously over the years.”
Laura Brodie, who runs the groups operations, has even deeper roots in the organization. “She’s minimally third generation,” Mr. Mirchin said. “Her father is still a member — he’s 96 — and her grandfather was as well. We don’t have any progeny of the original members, though we do have the incorporation papers.”
Mr. Mirchin has been going over the organization’s paperwork in preparation for the merger, which the two free loan organizations agreed on a year ago. The MetroWest-affiliated organization already processes loans for the smaller organization, and it has opened its loan applications to residents of Bergen and Passaic counties.
The actual merger has been slowed by the pandemic. But the pandemic has led the Paterson loan association to increase its giving.
“We stepped up to the plate and began lending money without guarantors for people who were clearly affected by covid,” Mr. Mirchin said. Those people include “a piano teacher who can no longer give piano lessons, and a couple who did catering at Hebrew day schools and oneg Shabbats who were out of business” when schools and synagogues shut down. “Hopefully they’ll get back in business and will be able to pay back their loans. These are difficult times. We’re here to help people.”
Loan applications can be downloaded from hebrewfreeloanofnj.org.