North American Jewish federations overwhelmingly gave their support Tuesday to a plan to provide $900 million in loans to new Soviet immigrants in Israel, which the federations would guarantee.
But the plan does not go into effect until each participating federation signs a formal agreement committing itself to the guarantees. American federations would be responsible for backing an estimated $750 million of the loans.
“I think that the American Jewish community realized that we don’t have an option,” Shoshana Cardin, a past president of the Council of Jewish Federations, said after federation leaders from across the continent voted here at a special assembly convened to approve the loan program.
“This is an opportunity, and maybe the only opportunity, to bring klal Yisrael (the Jewish people) to Israel,” said Cardin, who is also chairman of both the National Conference on Soviet Jewry and the Conference of Presidents of Major American Jewish Organizations.
Four federations — in Cleveland, Minneapolis, Omaha and Madison, Wis. — voted against the resolution authorizing the loan guarantee program. But other federation representatives said they were hopeful that everyone could eventually be convinced to back the program.
“We have to work with every community and get them to say yes” to signing indemnification commitments, said Charles Goodman, president of CJF, which represents some 200 North American federations and was the initiator of the program.
Although the loan program was approved by a weighted delegate vote of 481-22, with 66 abstentions, CJF must still receive indemnification pledges — or guarantees — covering 90 percent of the total loan amount before the program is effective, officials attending the assembly said.
CJF will be the actual guarantor of the loans, but because it has neither assets nor fund-raising abilities, its financial liability must in turn be guaranteed by local federations, Goodman said.
‘WE HAVE TO LOOK AHEAD’
American Jewish federations will cover at least $750 million of the total $900 million in loans that is expected to be made available to Soviet immigrants, with the balance being guaranteed by other Diaspora Jewish communities.
The exact amount to be covered through Keren Hayesod, the major fund-raising arm of Diaspora Jewry outside the United States, has yet to be determined, officials said.
The loan program will allow the Jewish Agency for Israel to meet its financial responsibility for immigrant absorption.
Up to now, the Israeli government and the Jewish Agency have each been paying portions of a first-year absorption grant given to each new immigrant family from the Soviet Union, currently valued at about $8,500 for a family of three.
Under the program approved Tuesday, each immigrant will receive a smaller grant from the government, as well as a $1,000 loan from the Jewish Agency.
The loans will have a 10-year payback period, at an annual interest rate estimated by CJF to be 10 percent.
Most of the four-hour assembly Tuesday was taken up discussing the challenge facing world Jewry by the unparalleled aliyah of an estimated 1 million Soviet Jews by the end of 1993.
The delegates, representing over 100 federated communities in North America, broke into applause as speaker after speaker enumerated the “historical opportunity” of the massive exodus.
“We can’t look back, we have to look ahead,” declared Marvin Lender, national chairman of the United Jewish Appeal.
Under the program, each federation will be responsible for its “fair share” of the total loan amount, a formula that will be determined by its 1990 Jewish population and the amount of funds it raised last year.
If all goes according to plan, though, the federations will not have to pay a cent for the loans, which will be issued by Israeli banks.
A $200 million reserve fund is being established to cover potential loan defaults. Only if the loan defaults exceed that amount will the federations be responsible for repaying the money.
OPPOSITION TO BORROWING CONCEPT
The few federation delegates expressing serious reservations about the program raised the issue of massive loan defaults and how this would finally be covered by federations, which themselves have major financial obligations, such as running social service programs for local community needs.
Henry Goodman, a past president of the Jewish Community Federation of Cleveland, said his federation had to vote against the program for fear of bankrupting themselves in the future should the loan guarantees be called in.
“We’re a philanthropic system of fund raising, not a philanthropic system of borrowing,” Goodman said after voting against the proposal.
But he added that the Cleveland federation is “not stepping back” from raising funds to aid Soviet Jews. “In your family, it’s always difficult to be on the other side, but we believe the integrity of the system is on the line,” he said.
For those federations that will ultimately take part in the program, this is believed to be the first time organized American Jewry will resort to a loan commitment rather than attempting to raise needed funds solely through donations.
Most officials agree that the amount of money needed by the Jewish Agency is far beyond the fund-raising capabilities of American Jewry in the time it is demanded. They see the loan program as the only realistic way to satisfy the financial demands of the massive Soviet Jewish immigration to Israel.
In addition to the loan program, Jewish federations throughout the United States will undertake a special $450 million fund-raising drive under the auspices of UJA, the major fund-raising arm of American Jewry.
Other Diaspora communities, including Canada, will raise $200 million through Keren Hayesod.
All told, organized Diaspora Jewry will provide $2.6 billion for Soviet Jewish immigration over the next three years.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
