As the Jewish federation system prepares for next week’s annual United Jewish Communities General Assembly in Jerusalem, it is facing challenging times along with the rest of the nonprofit world.
Demand for the social services and financial aid at the organizations funded by the federations has increased dramatically, and fund raising across the board has become harder as donors become tighter with their philanthropic dollars. In addition, the annual internal struggle that each federation board faces over how much money to allocate to address local needs and how much to send overseas stands to become more intense.
The system’s umbrella organization, the United Jewish Communities, is faced with a dual task: Help the federations figure out how to raise more money now and deal with increased pressure from the system’s overseas partners, the Jewish Agency for Israel and the American Jewish Joint Distribution Committee, both of which have been hit hard by the falling dollar and want more money from the UJC.
These are among the challenges facing Howard Rieger, UJC’s outgoing president and chief executive officer, who is in his last year in office and is moving forward with a reduced staff after budget pressures forced him to enact significant layoffs.
Rieger took questions from JTA via telephone last week, addressing all of these issues, along with some of his own frustrations. He called for the UJC and the overseas partners to work together, while also suggesting that the relationship between the three groups may not look the same in the future as it does today. What follows is a condesned version of the interview:
JTA: In your own words, what is this G.A. about?
Rieger: First, we did make a commitment in the past rather than having the G.A. only in North America that we would cycle in a visit to Israel on a regular basis. The last time we did this was in 2003. Fulfilling that commitment was a matter of strategy at that time. We do believe that the physical connection fostered by coming to Israel and [having participants] interacting with their counterparts in Israel and seeing needs on the ground is a crucial component. …
We have a large number of people who have signed up for site visits Sunday and Tuesday, and in a low key way celebrate the work that we do and the feelings that we have about that work. And the G.A. will be a tangible experience. We have a pretty stellar lineup that includes the prime minister, the minister of defense, the foreign minister, the head of the opposition and the governor of the Bank of Israel, Stanley Fischer, who signed on as the economy took the turn that it did. It can be an opportunity to study the moment that we are in.
JTA: Rumors have been swirling that attendance at this G.A. is expected to be low, that federations are sending fewer of their professional staff than they have in the past over budget concerns, and even lay leaders are shying away because of the cost. How are the numbers?
Rieger: When you put that all together, with the economy the way that it is and with the 60th anniversary of Israel being marked this year, and given that many of the folks coming have been here on many occasions already this year, we think we will have tremendous attendance. It is at about 3,000 right now.
JTA: Did the UJC miss an opportunity to focus on the economic crisis and other domestic challenges by holding the G.A. in Israel?
Rieger: We live in a global reality today. You don’t have to be in a particular place to explore issues together. This issue is not absent from our agenda. Frankly speaking, if last year the G.A. was in Israel and this year was Nashville, we would be more domestically oriented. But we have had a whole segment of our Web site dedicated to dealing with the economy, and have had multiple convenings of federations’ staff and lay leaders and have been consistently talking about this over the last period of time. We are sharing information on that site that involves activities at individual federations. We are into this about as much as you can be into this right now.
JTA: Along those lines, could you expand on the UJC’s plan for getting through this economic mess?
Rieger: The reality is that you have to look at what are your choices, and you have to see what can you do to be more cost effective and efficient, and you have to look at where you can cut. At UJC, we have a strong history of that. We have been cutting costs throughout the existence of UJC. When UJC was formed in 1999, we had 320 staff members; that is down to about 200 now. We had a budget that was $50 million; it is at $37 million today.
Federations are contending with that themselves right now. The question now is what else can be done.
Having said that, the returns we have been getting on campaigns is that on the leadership levels (major donors), early campaigns are holding up well. The numbers out of New York five or six weeks ago were very encouraging or up, and Chicago did very well. Do we know there are challenges out there? Of course we do.
But campaign totals are not due until to December 31, 2009. Right now, cash collections look pretty good. A lot gets collected in September, and federations are in the midst of that, as I would be if I were back in my home community in Pittsburgh. Sure it is a challenge for us. We will deal with the challenge, and federations have the capacity to bridge one year against another. Hopefully, we will surprise ourselves. In the last two downturns, we did pretty darn well in terms of pledges and collections. Hopefully this won’t be any more dramatic.
JTA: There has been long-standing tensions between the UJC and some federations, and between the UJC and the overseas organizations it supports, the Jewish Agency for Israel and the American Jewish Joint Distribution Committee. There are high-ups at JAFI and JDC who say the current system is falling short in terms of producing additional funding for overseas causes. And some federations are in open revolt against the UJC in terms of not wanting to pay their dues to the organization. How do you respond to such criticisms?
Rieger: We have had to make decisions that were tough to make. We made them and we executed them. We have made tough decisions about what we had to do and how we would do it. We have assembled a team that is second to none. Look at it from a leadership level. We have created the Mandel Center for Leadership Excellence and started a new center in Israel. Those changes weren’t made in a vacuum. They were made in an era where some of those people who are criticizing us want to believe that the past can be the future, and they didn’t make the changes they could have when they actually owned this place or its predecessors. I would look at it as sour grapes.
The UJC has a pretty good working relationship with the Jewish Agency and the JDC. Are there naysayers? Sure. But look at what we have done over the past 24 years. We have provided $9.5 billion to the Jewish Agency and JDC. If this is a failed enterprise, and you have anyone in the Jewish Agency or JDC who feel that that isn’t evidence of the strength of the federation system, then they have another thing coming to them – or I have another thing coming to me.
Having said that, when times are tough, that is exactly the moment when JAFI, JDC and the UJC can sit together at the table and talk about our marketing and our fund raising and how we can use the Web in a way that will be more unified or less so. How can we be totally focused on our mission and on the collective? There is lots of money to be saved.
We are in the midst of a strategic planning process, and there are tough issues on the table. We will engage them. We think this is a time for change. If someone wants to bring back the world of 1967, that world isn’t here today. The world is changing by the moment. I think what we have is infrastructure and continuity and stability. It is not always the most exciting thing, but infrastructure and continuity will get us through. It is inertia that sets in and pulls you back. We are in the midst of doing market research out in the field and asking thousands of people, supporters and non-supporters, that will bring important information to the table at the end of the year that needs to be brought together with a whole different point of view on how to brand the system.
If unnamed sources prefer to bash us because it takes the heat off of them, then shame on them. We will continue to meet and I believe that we will end up in the right place.
JTA: There has also been talk from top lay leaders and professional staff at the UJC, JDC and JAFI that the current structure of the relationship between the three organizations may not look the same in 10 or even five years — that the JDC and JAFI may not continue in their role as sole proprietors of overseas needs for the federation system. How do you see this relationship evolving?
Rieger: There are two ways to look at this thing. Are JAFI and JDC our partners? In a major sense today, yes, and they have been in the past. Do I see that that will change dramatically in the next five or 10 years? Probably not dramatically. But we also have to move towards change. And we won’t be able to do the same things in the same way and continue to be successful. … If unnamed sources prefer to bash us because it takes the heat off of them, then shame on them.
JTA: We are now getting reports that major foundations are starting to pull back money and major donors are starting to cut back grant making. What have you seen and heard from the federations so far regarding foundations and major donors? Annual campaigns over the past few decades have become more and more reliant on major donors, but does the current crisis put the emphasis back on having to court smaller donors as well?
Rieger: I have been involved in as much community fund raising as anyone, and I can state unequivocally that the campaign is a community-building experience and that building community is about making choices. That is why branding is important. Today’s $1,000 donor or $500 donor can be the next $50,000 donor. It happens all of the time.
What we have seen in good times and bad times is a system that for 100 years has been able to respond. And if there is anything from this economic moment that we are in that is the bottom line and that has to be underscored, it is that. That indicates why you have a federation – for when times are rough. Where are people going when they need more food and food pantries? They aren’t going to go directly to a mega-donor or a foundation. They will go to a federation. [The federation] isn’t just about funding a trend or just another experience out there that sounds kind of exciting. It is about basic funds, and I will bet on the federations every time.