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Federations to Gain New Say in Allocating Overseas Funds

For the first time ever, American Jewish federations will soon have a say in how a portion of their overseas allocations will be spent.

But whether this change represents a dramatic overhaul of the old communal system of providing support for Jews around the world or just a small step depends on who you ask.

The Overseas Needs Assessment and Distribution Committee, a newly formed panel composed primarily of federation leaders, is recommending that each U.S. federation decide where 10 percent of its overseas funds go.

Each federation would select from a list of pre-approved projects of the federation system’s longstanding overseas partners, the Jewish Agency for Israel and the American Jewish Joint Distribution Committee.

Last year, federations around the country allocated $237.7 million for overseas needs, most of which went to helping needy Jews around the world, bringing new immigrants to Israel and helping absorb them in the Jewish state.

Saying that the needs are far greater than what federations are currently allocating, ONAD, as the committee is known, is also urging the federations to step up their overseas giving.

Federations that increase their overseas allocations from what they gave in 1998 could, under the plan, designate more than 10 percent into the choice projects, called “community” funding.

ONAD’s first recommendations are expected to be approved by the UJC’s Board of Trustees, meeting in Chicago on Thursday.

ONAD has included in those funding choices available to individual federations:

Feeding elderly Jews in the former Soviet Union, for which $10 million is sought;

A variety of programs for new immigrants in Israel, for which $27 million is sought;

Funding Israeli shlichim, or emissaries, who do Israel programming in U.S. communities, for which $1.2 million is sought; and

Partnership 2000, a project linking U.S. federations with Israeli regions for people-to-people exchanges and economic development, for which $18 million is sought.

It is expected that most federations will make feeding the elderly Jews their top community funding priority.

The remaining 90 percent of federation-raised overseas money — an estimated $215.1 million — will continue to be funneled through a central system that will, as in the past, give approximately 75 percent to the Jewish Agency and 25 percent to the JDC.

In theory, the ONAD process is a significant departure from the past, when allocations decisions were determined entirely by the United Jewish Appeal, which last year merged with the Council of Jewish Federations to become the United Jewish Communities.

Before, the two recipient agencies — the Jewish Agency and the JDC — could spend their allocations at their discretion.

Now, even though those two agencies will continue to get the lion’s share of overseas funding — most of the 90 percent, called “collective” funding — ONAD must review the projects that are funded.

How this new power shift will play out in the future remains to be seen, particularly whether the federations’ increased role will — as many have hoped — increase federations’ flagging enthusiasm for funding overseas needs.

In the past decade, federations have kept more and more of their money at home for Jewish continuity projects and other domestic concerns.

Many federations — eager to have more control — have also opted to bypass the national system for at least a portion of their overseas giving.

San Francisco, for example, has set up its own grant-making foundation in Israel.

Other federations, like Pittsburgh, began using some of their overseas money to directly fund other groups, such as the New Israel Fund. For its part, Boston launched its own overseas efforts in partnership with the JDC and Jewish Agency.

For the coming year — meaning 2001 — as a result of a “stabilization” plan approved in April, federations are informally committed to maintain at least the 1998 allocations levels.

However, the UJC has no power to enforce this agreement and it is unclear what federations will decide to do once the stabilization year is over.

Depending on whom you talk to, ONAD’s first recommendations are either a fundamental change or a very modest step toward giving federations greater decision-making powers.

“What we’re trying to do this time is to create the road map for the future,” said Alan Jaffe, chair of ONAD and a former president of the UJA-Federation of Greater New York.

The choices offered this year to federations are more narrow than many had envisioned in ONAD’s formative stages.

When the committee was established, it was envisioned that the panel would determine what federations wished to fund collectively and which other international agencies — such as the Reform and Conservative movement’s affiliates in Israel — would be allowed to compete with the JDC and the Jewish Agency for the federations’ funds.

In the end, officials said that with only eight months to make its recommendations, ONAD decided to limit its work this year to the JDC and the Jewish Agency.

The committee spent most of its meetings listening to those agencies report on what their needs were and then haggling over what would fall into “collective” priorities — originally called “core” — and what would fall into “community” — originally called “elective.”

Representing those who were disappointed with the outcome, the Combined Jewish Philanthropies of Greater Boston, one of 18 federations on the ONAD committee, added an appendix to the ONAD recommendations expressing frustration that the committee did not make more dramatic changes, particularly in deciding what U.S. Jews should — and should not — fund.

It is ONAD’s role “to identify the highest priority needs, those of special interest to the American Jewish community which can be met with assistance and the serious `value-added’ of ideas, talent and voluntary energy above and beyond funding,” says the appendix, asserting that projects now in the collective pot do not all meet this standard.

Boston also said it was disappointed that the JDC and the Jewish Agency are the only agencies eligible for federation funds under the recommendations.

Jaffe, the ONAD chairman, said that in the future, ONAD will likely offer more choices and may bring other agencies into the process.

“We didn’t do that this year because we hadn’t done an independent needs assessment and the timing was short,” he said. “To open this up would have been difficult to do.”

While some believe ONAD’s recommendations do not represent a big enough change for the federations, for the Jewish Agency and the JDC it presents new challenges: they must now market their projects directly to federations.

Under the new system, the agencies have to ensure continued support for both the needs and programs designated as collective as well as community- supported.

The community funding portion initially sparked some concerns from Jewish Agency and JDC, who were represented on ONAD and were fearful that given the choice, federations might neglect what the agencies sees as worthy projects.

“JDC and the Jewish Agency have a sense of what their base funding will be, but other services are kind of at risk,” said Steven Nasatir, executive vice president of the Jewish Federation of Metropolitan Chicago, and a member of ONAD.

“Both those agencies are very concerned about not knowing for sure how many dollars they’ll have to run their programs.”

Nasatir, whose federation has long been one of the largest contributors to overseas causes, called ONAD’s recommendations a “good first-year outcome.”

In the long term, ONAD, with its stepped-up communications between the overseas providers and the federations, “will help in communities understanding overseas needs better,” said Nasatir.

Overall, the two beneficiary agencies say they are satisfied with the ONAD recommendations. But the JDC is — at least publicly — more apprehensive.

“If the federations come through by meeting their share of the core and electives, then we’d be able to continue functioning at our current level,” said Michael Schneider, the JDC’s executive vice president.

“But if they fail to produce those figures, we’ll have shortfalls. We hope they rise to the occasion.”

The JDC added an appendix to ONAD’s recommendations expressing its “deep concern that, while needs overseas are increasing, funding for these needs are steadily eroding.”

Avinoam Bar Yosef, the Jewish Agency’s director of media and communications, said simply, “We’re supporting the decisions. We will start now having meetings with individual federations about the electives.”

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