Gratz grew up a celebrated beauty in a home frequently visited by the painters Edward Malbone (Malbone, Edward Greene) and Thomas Sully (Sully, Thomas) (both of whom made portraits of her) and by Washington Irving (Irving, Washington) and Fanny Kemble (Kemble, Fanny). In 1801 she helped organize and became first secretary of the Female Association for the Relief of Women and Children in Reduced Circumstances. In 1815 she helped found the Philadelphia Orphan Asylum, of which she served as secretary from 1819 to 1859. In 1819 she organized and became secretary of the Female Hebrew Benevolent Society.

In 1838, after some 20 years of active interest in improving religious education for Jewish children, Gratz, through the Female Hebrew Benevolent Society, founded the Hebrew Sunday School Society of Philadelphia, of which she served as president until 1864. The society was the first such organization in the United States and served as a model for others like it. The fame she enjoyed in her own day and the enduring interest in her rest not on her philanthropies, however, but on the well attested tradition that she served as the model for the heroine Rebecca in Sir Walter Scott (Scott, Sir Walter, 1st Baronet)'s Ivanhoe (1819).