Charities on the Dole

FEGS, or Federation Employment and Guidance Service, began life in 1934 as a small Jewish charity in New York. Over 80 years, it grew into a sprawling, $230 million social-services nonprofit, helping welfare recipients find jobs, housing people with disabilities, and offering home care for the poor. Its sudden collapse earlier this year—it filed for bankruptcy in March, owing $2.3 million to the New York State Office of Mental Health and another $12 million in construction loans—illustrates how government money has transformed religious and mutual-aid philanthropic organizations and the risks that such groups take when they chase public funding.

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