At a time when private Jewish foundations are doling out perhaps more money on their own than the entire Jewish federation network in North America, the Jewish community is set to strike back.
Perhaps the most innovative aspect of the United Jewish Communities’ announcement last week, overshadowed by the appointment of Stephen Solender as president of the newly reorganized social service network, was the establishment of a national foundation to bring America’s most wealthy into the communal tent.
“A lot of philanthropy today is about directed giving and we want to be responsive to donors who have specific goals in mind,” said David Altshuler, who was appointed last week to become president in January of the yet-to-be-named foundation.
“At the same time, we want to foster partnerships, help people leverage their funds and create a forum where recipients and donors can be heard in one common conversation. We want to be creative and constructive,” he said.
Specifically, the foundation is hoping to appeal to the so-called “mega-donors” — a handful of major Jewish philanthropists like Les Wexner and Michael Steinhardt, who in recent years have established their own creative foundations. Federation officials have observed this trend with mixed feelings, pleased at the generous commitment on the part of philanthropists but worried that they are becoming increasingly independent of the central system.
That is one reason officials were gratified when one of the mega-donors, Charles Bronfman, agreed to be the founding chair of the UJC. But will other major philanthropists be drawn to working with the new foundation?
Judging from Steinhardt’s initial reaction, there are no guarantees.
The foundation’s pitch to donors — which Altshuler said is yet to be formulated — must be “persuasive and articulate,” according to Steinhardt, whose own foundation has helped to underwrite the Birthright Project, which provides a free trip to Israel for Jewish young people, and pumped $11 million into a new cultural center on the Upper West Side to attract unaffiliated Generation-Xers.
“They must have a quality presentation that will be viewed like any other presentation made to foundations that exist in the Jewish world,” he said. “It will be put on an equal plane, but probably not more than that.”
Steinhardt, who has criticized the central system for being overly bureaucratic and lacking in creativity, added that he was unaware of the new foundation until he read about it last week in the Jewish media.
Steinhardt’s is just one of at least 7,000 Jewish foundations with $1.75 billion in assets that are accumulating at a record pace due to tax incentives and the bull stock market. The grants they disbursed last year may have surpassed the record $1.9 billion raised in 1998 by Jewish federations, according to a study by the San Francisco-based Institute for Jewish and Community Research (IJCR).
In fact, 20 of the largest Jewish foundations were expected to distribute $300 million this year alone — up from $220 million five years ago. And yet, the study found, less than one-third of those grants were expected to be distributed within the Jewish community, and in many cases the gap is widening between the goals and mission of these foundations and the federation system.
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Gary Tobin, president of the IJCR, applauded the creation of the foundation, saying it could “help guide the billions accumulating in foundations into programs and needs within the Jewish community.” He said he envisions the foundation to be “a connector that links foundations, philanthropists, institutions and programmatic initiatives.”
He predicted that some foundations will “continue to work completely on their own, some will work within the federation system, and some will do both.”
Richard Wexler, chairman of the UJC’s Campaign Finance Resource Development Committee, said he believed the $1.9 billion the federation network is currently reaping could be “easily doubled by the foundation in terms of private philanthropy, restricted endowments and private foundations.”
“Jews are incredibly philanthropic,” he said. “But a large segment of that philanthropic population does not relate to the projects and programs of our system. We are not tapping into them and assisting them. There is a strong belief that the UJC as the central address for North American Jewry, has a responsibility to collaborate with donors, foundations and funders networks on creative programming.”
John Ruskay, the interim executive director of UJA-Federation in New York, was also supportive of the foundation, saying he has “long believed that there is the potential for the national system to be more proactive in attracting substantial philanthropic funds for initiatives that are undertaken on the national level. This will require close cooperation and planning with local federations.
“We are working to pursue shared objectives. Our experience has been that those who come to us to pursue their specific areas of philanthropic interest have been longtime supporters of UJA-Federation,” Ruskay said.
The new foundation, Wexler pointed out, is an “opportunity to show the best of federation’s programs at home and overseas to a broader audience. I’m not sure we would ever claim that the federation would satisfy every donor’s desires, but we believe all Jewish philanthropies can benefit from a foundation that is not there to co-opt their dollars but to collaborate with their donors.”
The New York Jewish community is the largest in the United States, but Wexler noted, its per-capita giving to the UJA-Federation campaign is among the lowest in the country.
“I have to believe there is a lot of untapped Jewish wealth in New York,” he said. “I don’t know that the foundation is designed to tap into that, except that it would provide a place where donors might collaborate on new innovative projects and creative opportunities.”
Steven Ain, the UJC’s interim chief operating officer, said the new foundation would also seek to attract major philanthropists who live in small communities and do not wish to establish a major foundation with their local federation.
“But if you have a national entity that the local community is a part of,” the donor may feel comfortable opening a foundation with it, he said.
Steven Nasatir, president of the Jewish Federation of Metropolitan Chicago, noted in a report to the UJC that only a small percentage of small federations manage philanthropic funds. He said the high cost of managing such funds often made it prohibitive. But now the national foundation can handle the paperwork while the federation concentrates on building a relationship with the donor.
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The new foundation would be a wholly owned subsidiary of the UJC, which would also select its board of directors, noted Solender.
He stressed that gifts made through the foundation would “have to be in addition” to the annual gift made to the donor’s local federation.
“I’m very optimistic about the foundation,” said Solender. “It is one of the most important recommendations emerging from the UJC. There is enormous potential there.”
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