NEW YORK (JTA) — In a potentially groundbreaking move, leaders of the North American network of Jewish charitable federations are considering a plan to end their exclusive funding relationship with their two main overseas partners.
Until now, money distributed collectively by the federation system for overseas needs have been divided solely between the Jewish Agency for Israel and the American Jewish Joint Distribution Committee. But a new proposal would allow for the federations to allocate their jointly raised money to additional organizations.
The proposal is expected to be a main topic of conversation at a summit of more than 200 federation system leaders in Palm Beach, Fla., Feb 8-10. It is one of seven proposals drafted by several workgroups made up of 29 lay and professional leaders from federations across the country, and 12 officials from the United Jewish Communities, the federation system’s umbrella group.
When the UJC was created in 1999, it was designed to serve as the conduit through which money from the federations flowed to the Jewish Agency, a quasi-governmental Israeli organization that promotes alliyah and Zionist education, and the JDC, an American-based organization that helps Jews in need around the world.
Each Jewish federation sends a predetermined amount of its annual campaign to the UJC, which distributes that money to the Jewish Agency and the JDC to pay for each of their operating budgets.
But the workgroups are proposing the creation of a new “planning table” to assist in “reshaping UJC’s role on the global agenda of the Federation system.” The new body would bring together officials of the federation system each year to determine how the UJC’s overseas dollars are spent, with the possibility of sending dollars to organizations besides the Jewish Agency and the JDC.
The Jewish Agency is balking at the new proposal. Its board chairman, Richard Pearlstone, sent the organization’s criticism in a letter Jan. 22 to the top two lay leaders of the UJC and its top professional.
“This letter is written with regret at a time that the very fiscal survival of the Jewish Agency for Israel (“JAFI”) is at stake,” Pearlstone wrote to the UJC’s chair, Joe Kanfer; its CEO and president, Howard Rieger; and the chair of its executive, Kathy Manning. “We fear that United Jewish Communities is on the way to abandoning its obligations and responsibilities to the hundreds of thousands of Jews we serve every day, with the clear result of deconstructing the historic partnership between JAFI and the federations of North America while continuing to broadcast a commitment to THE ‘partnership’.”
In response, Kanfer, Manning and Rieger wrote to Pearlstone saying that while the Jewish Agency and JDC will remain the federations’ primary overseas partners, the UJC must re-evaluate the relationship.
“The fact we all have to confront is that, like it or not, we have been in transition for the last twenty years or more. As in all major transitions, when you’re in the middle of it, the outcome is not clear,” the UJC leaders wrote in their letter.
They went on to say that while the federation system’s relationships with the Jewish Agency and the JDC were shaped by the Holocaust and the creation of Israel, and worked well for decades, the world has changed and the system must change.
“But what worked magnificently in 1975 may not work so well in 2010, not to mention 2025,” the UJC leaders wrote. “The Jewish world, both here and in Israel, is substantially different today than it was decades ago. By itself, the sheer growth of wealth and civil society in Israel — developments we can take great pride in — challenges the way we do business and also creates new opportunities for us. And, of course, our donor community has changed markedly. Add to the mix the biggest financial crisis in three quarters of a century and we all have reason to be concerned.”
Both the Jewish Agency and the JDC have had to make significant budget cuts for 2009 as the economy has tanked and dollars from the federation system have fallen — along with dollars from their other philanthropic sources. The Jewish Agency recently cut its budget by $41 million and the JDC by $35 million.
And further cuts could be on the way. The federation system fell approximately $16 million short in the funding it was supposed to send to the organizations on Jan. 1 to pay for last year’s budget because of the difficulties that federations have had in collecting on pledges donors made in early 2008 but could not pay late in the year.
Jewish Agency officials are especially concerned because the UJC provides a much larger portion of its budget than it does for the JDC. Roughly 75 percent of the UJC money goes to Jewish Agency, while 25 percent goes to the JDC.
Jewish Agency sources told JTA that they are upset as well because the agency’s by-laws state that a large portion of its board of governors must be appointed by the UJC. As a result, the sources say, the organization is essentially owned in part by the UJC and thus entitled to an exclusive funding relationship.
The JDC’s executive director, Steven Schwager, was not available for comment.
UJC leaders say they are not looking for a divorce but merely a modification in the relationship.
“We have always worked in partnership with JDC and JAFI,” Kanfer told JTA. “This is a step toward greater collaboration with our partners and being most effective with our fund-raising dollars in a time of financial constraint. I think no one disavows the importance of the partnerships, but at the same time changed circumstances have to be managed together.”
Privately, some federation officials have said they would ultimately like to see the Jewish Agency and JDC have to compete with other nonprofits for federation dollars simply because it would force the two organizations to streamline and become more efficient.
Jewish Agency officials have asked to be included in the February meetings, but to this point the UJC has declined, saying that federation officials want to discuss the proposals on their own first. The officials also note that many Jewish Agency board members will be included in the meeting because they also sit on federation boards.
Federation leaders will decide at the meetings whether they want to bring the workgroups’ suggestions before the UJC’s board of trustees for a vote.