A deal between the two overseas arms of the North American federation system over how to split the money they receive from the federations apparently has fallen through over a disagreement over which should fund World ORT.
The Jewish Agency for Israel and the American Jewish Joint Distribution Committee have been negotiating since November over how to divide the approximate $180 million per year for their core budgets from the federations.
For the past two years, the Jewish Agency has received 75 percent and the JDC 25 percent of that money, which is funneled through the United Jewish Communities.
But the negotiations, which have been described as amicable and professional, fell through last week, JDC Executive Director Steven Schwager told JTA.
The negotiations will now go to mediation.
“JDC and JAFI negotiated for the last year. There were good-faith negotiations and the conversations were interesting and informative,” Schwager said. “There was give and take on behalf of the parties, and the parties could not come to an agreement.â€
Multiple sources said the final sticking point was funding for World ORT, the century-old international system of Jewish vocational schools. The UJC makes a $3.6 million allocation to ORT from the same pool of overseas money from which it allocates to JDC and the Jewish Agency.
Since 2000, $600,000 of that allocation came off the top of the pool of money before it was divided by JDC and the Jewish Agency. The other $3 million was from the allocation to JDC.
But JDC no longer wants that $3 million to be taken from its budget, according to a source close to the situation. Instead, it wants the entire allocation to ORT to come off the top before the money was actually divided.
Schwager acknowledges that ORT was the sticking point.
â€œWhile the last item on the table was ORT, it was understood from the very beginning that everything had to be agreed upon,â€ he said.
The 75-25 split arrangement was forged in 2006 after the UJC’s Overseas Needs Assessment and Distribution Committee process failed. ONAD essentially pitted JDC and the Jewish Agency against each other for allocations each year.
Months ago it appeared the two sides had agreed to continue that split for another two years, until JDC raised the ORT issue within the past two weeks, according to the source close to the situation.
The JDC’s proposal for ORT funding would cut into the money received by the Jewish Agency, as the two groups would split a smaller pot.
With the Jewish Agency receiving three-quarters of the pot, the agency in essence would assume the greater responsibility for funding ORT, an organization with which it has no historical relationship.
That would be akin, according to one source, to asking that all money to fund aliyah come off the top before the split.
Jewish Agency officials seem peeved that negotiations that were amicable now have fallen apart because the JDC has an issue with ORT.
â€œThe Jewish Agency is not involved in this,” said a Jewish Agency official, who asked not to be identifed. “This is between JDC and another organization. Itâ€™s not our business.â€
How does this affect ORT?
A suggestion that the federations no longer fund ORT was summarily shot down by the federations, a UJC official said.
â€œUnlike other organizations, World ORT is dealing with education and all its commitments are multi-year commitments to the local governments, local communities and more importantly, to its students,” World ORTâ€™s director general, Robert Singer, told JTA via e-mail. “The schools cannot be closed, and lack of funding may bring a total collapse of educational systems in different countries.
Singer wrote that World ORT believes that negotiations between JDC and JAFI “have nothing to do with World ORT, and we see any attempt to involve ORT in the internal affairs of JAFI and JDC as out of context.â€
In 2007, Singer told JTA that his organization had raised $24 million the previous year.
World ORT and the UJC both say the desire to change the funding model has nothing to do with the relationship between JDC and ORT and much more to do with the declining dollar, the sinking U.S. economy and the fact that both JDC and the Jewish Agency are hurting tremendously.
The JDC recently laid off 60 employees and is facing programmatic cuts to deal with a $60 million shortfall. The Jewish Agency, which estimates that it has lost approximately 30 percent of its buying power because of the faltering dollar, is now trying to form more partnerships with the Israeli government to make up for its budget deficit.
â€œThe dollar is incredibly less robust than it was even two years ago, when the original deal was hammered out,â€ said Jim Lodge, the UJCâ€™s vice president for Israel and overseas issues.
â€œThe fundamental problem is due to the double whammy of devaluation of the dollar, and in some places there is not sufficient assurance of enough core funds to do what we need to do overseas,” he said. “This will require all of us to find creative ways of conveying the nature of the overseas agenda in more compelling ways.â€
The JDC insists it is not trying to sever ties with ORT.
â€œThat is not our position,” Schwager said. “We support the work of ORT.â€