News Analysis: Move to Review Path of Funds to Israel Reflects New Thinking

Pressure from federations around the country has prompted the central Jewish fund-raising establishment to re-examine how donations are funneled to Israel.

That re-examination, triggered by a resolution adopted last week by the board of the United Israel Appeal, turns up the heat on the Jewish Agency for Israel, which is already in the midst of a scramble to reform itself.

The resolution was welcomed by federation executives, who said the national leadership had heard their call for a greater responsiveness to donors and their changing priorities.

For decades, the Jewish Agency has been the principal recipient in Israel of funds raised by the annual campaigns of local federations and the United Jewish Appeal.

The transfer of money is administered by the UIA through what is referred to as an exclusivity agreement between the two parties.

That arrangement brought the agency this year roughly $200 million from the central campaign and $80 million in U.S. government grants for refugee resettlement.

The UIA board resolution challenges the arrangement by exercising an option to review its terms before its natural termination in 1999.

Rabbi Daniel Allen, UIA executive vice chairman, put the decision in a positive context.

“It opens up a dialogue between UIA, on behalf of American Jewry, and the Jewish Agency, which will invigorate the relationship,” he said.

He added that the decision is not so much a referendum on the agency as it is on the wisdom of collective Jewish philanthropy.

But the decision cannot be separated from longtime unhappiness with the agency by some big-city federation executives.

They have maintained that the agency continues to effectively execute its primary mission of resettling immigrants in Israel, on which 65 percent of its program budget is spent.

But they decry what they say are the politics, inefficiencies and inflexibility of such a big agency.

In fact, individual federations are not technically bound by the agreement, and, in several instances, they have been bypassing the agency to fund projects in Israel directly.

Wayne Feinstein, executive vice president of the Jewish Community Federation of San Francisco and an outspoken critic of the agency, said he was “delighted” by the decision to review the contract.

He said he expects the agency to continue to get “the lion’s share” of the national system’s funds for Israel.

In the meantime, he said, “our donors and board would likely support” the “contours of the new directions” being undertaken by the agency.

Nonetheless, he added, the era of exclusivity is over.

“The time has passed when JAFI can be the exclusive agent for UJA dollars raised for Israel,” Feinstein said. “There can and will be other philanthropic agents for collective North American philanthropy.”

For its part, the Jewish Agency, which enjoys an annual budget of roughly $400 million, has been furiously at work on sweeping reforms, in part to win respect and confidence from skeptical federations.

A restructuring plan, slated to take effect on Jan. 1, 1998, aims to streamline and depoliticize the agency.

Among other changes, it calls for the agency to take over the bulk of the functions of its organizational partner, the World Zionist Organization.

It also will take over the formerly semiautonomous Joint Authority for Jewish/ Zionist Education, long a thorn in the sides of federations who have wanted more control over the programs their donations support. Those programs include teacher training, Israel experiences and curriculum development for Diaspora education in Judaism, Jewish culture, Zionism and Hebrew.

In addition, an intensive strategic planning effort is underway to redefine the mission and direction of the Jewish Agency as communal needs and priorities shift.

In an obvious effort to demonstrate the agency’s responsiveness, the UIA has begun to visibly market the agency’s contributions to the struggle for religious pluralism in Israel, a hotbutton topic for U.S. Jewish donors.

The UIA has distributed newly broken-down budget figures showing that the agency contributed $17.5 million in fiscal 1997 for “programs promoting tolerance, religious diversity and the unity of the Jewish people” in Israel.

Of this, UIA’s total contribution was $14 million, $7.1 million of which went specifically to programs of the three major streams.

Jewish Agency advocates have asked for time to let the reform and planning initiatives take effect before rendering a verdict on the exclusivity agreement.

Indeed, WZO leaders have threatened to scuttle the restructuring plan if the exclusivity contract was broken.

The UIA board, 75 percent of which is comprised of federation representatives, evidently tried to find some middle ground.

With its decision last week, it was exercising an option in its agreement with the Jewish Agency, which is supposed to last through 1999, to give notice of a desire to review the terms of the contract.

That review could have led to an early termination of the contract or an automatic termination if no renegotiation was completed by Dec. 31 of this year.

However, the board also decided to extend the termination deadline until the end of June 1998.

That decision was made to permit planned reforms to take effect and the strategic planning initiative to unfold, according to Louise Greilsheimer, president of UJA-Federation of Jewish Philanthropies of New York.

Said Allen: “It was unrealistic to think that in the midst of the important change going on, this conversation could be effectively held between the end of September and the end of December.”