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Federations Grapple with Relations Between Local and National System

November 26, 2002
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An undercurrent of tension pervaded last week’s annual gathering of the North American federation system over the relationship between local federations and the national system.

Beyond the workshops and plenaries in Philadelphia that drew some 4,000 people to address topics of Jewish concern, delegates grappled with the resistance of some member federations to comply with the financial directives from the national system.

Many federation leaders call the tension a growing pain for the United Jewish Communities, the three-year-old umbrella group of North American federations.

“We are approaching a fork in the road in the maturation of the UJC,” said John Ruskay, CEO of the UJA- Federation of New York.

“Will it be a network of federations where there are expectations about financial participation that we have collectively agreed to, or will we be a decentralized system in which federations participate at will in each national project?” he asked.

Which path is taken could determine whether the national system holds together or falls apart under the weight of conflicting needs and priorities.

The UJC, a merger of the Council of Jewish Federations, the United Jewish Appeal and the United Israel Appeal, has weathered a series of logistical and leadership challenges.

The organization was created to help streamline the Jewish community’s central fund-raising and social service agency into one that was more responsive to local federations’ needs while effectively directing dollars abroad for overseas needs.

And it was intended to stave off the trend of disenchanted federations, by making them the owners of the new system, said UJC’s president and CEO, Stephen Hoffman.

But the disenchantment among some has persisted, centered mostly on the question of whether federations should be required to contribute their share to keep the national system going.

The issue of noncompliance by federations to contribute to a variety of things — from UJC dues to Birthright Israel – – permeated the gathering, known as the General Assembly.

The issue culminated in a discussion of a resolution to oust federations that do not pay their dues.

The resolution, approved by the Board of Trustees in June, was conceived after Jewish federations in Tidewater, Va., and San Francisco questioned their payments.

Federation members, who discussed the issue at the Delegate Assembly, which represents all the federations, last Friday, are expected to vote on the resolution by conference call within the next 30 days.

But Hoffman downplayed the issue of dues compliance and other acts by the federations.

Until the creation of the UJC, “the actual costs of running the national system weren’t fully understood by most folks. Today, everything’s transparent,” Hoffman said, referring to an itemized bill federations receive for UJC’s costs for administrative and overseas needs.

“That, in part, is what just stimulates the whole discussion.”

The controversy has been further exacerbated by a new dues formula implemented July 1, officials say.

The formula is based on the ratio of each federation’s annual campaign to the total campaign, rather than a formula based on both local Jewish population and its campaign.

Hoffman said the dues issue is the only one in dispute that requires compliance. And San Francisco has now agreed to pay its portion, he added.

Other contributions from local federations are based on a “best-faith” effort — and nonparticipation by some federations has always plagued the system, he said.

“I believe it’s actually better today than it’s ever been. But we had this ideal vision that if the federations were going to vote on something, that they would all come through, and it’s not happening in exactly that way, so the challenge is how to get us closer to the ideal.”

Some federations are still clearly choosing to go their own way. These issues surfaced at several points during the G.A.:

At a meeting of the National Funding Councils, a body of 45 federations that helps to fund nine national agencies like Hillel: The Foundation for Jewish Campus Life, JTA and the Jewish Community Centers Association, four federations declared that they would not pay their portion for the remainder of the year, a total amount of $41,000.

The National Funding Councils will dip into reserve funding to make up for the shortfall, officials say, but the same federations have agreed to replenish the reserves.

It was the first time members of the National Funding Councils unilaterally withdrew pre-designated funding.

Noncompliance also struck the Board of Trustees meeting on Nov. 20 over a discussion of overdue payments to Birthright Israel. Officers discussed a proposal to pay the UJC’s unfulfilled portion of the program that sends 18- to 26-year-olds who have never been to Israel on an organized trip.

The five-year program was conceived as a $210 million partnership among the Israeli government, several major philanthropists, the UJC and worldwide Jewish communities.

The UJC initially committed to $39 million over five years. The proposal would reduce UJC’s portion to $23 million, and ask the Jewish Agency for Israel to pay the balance.

Robert Aronson, CEO of the Jewish Federation of Metropolitan Detroit, said he was aggravated that some communities don’t pay their share, while his does.

He called on UJC to expose the noncompliant communities, thereby pressuring them to pay.

Several member federations have not implemented the second year of the Israel Emergency Campaign, despite the fact that the UJC passed a resolution calling on the federations to do so.

Federations are increasingly falling short on what they are being asked to pay for overseas needs.

In the first two years of the UJC, the committee that funds those needs, the Overseas Needs Allocation and Distribution, known as ONAD, saw an increase in allocations. But it still fell short of its goal for funding its overseas partners, including the Jewish Agency and the American Jewish Joint Distribution Committee, which runs programs such as relief and welfare for Jews in the former Soviet Union and the absorption of Ethiopian Jews in Israel.

And it “will fall significantly short” this year, according to the national G.A. chair, Richard Wexler.

The Israel Emergency Campaign, which has tallied $326 million to date, is separate from the ONAD process.

For those federations resisting their financial obligations, it is often a matter of juggling tight budgets.

At last Friday’s meeting of the Delegates Assembly, several conveyed that sentiment.

Ellen Masters, a member of the Board of Directors of the Jewish Federation of the Berkshires in Massachusetts, explained the new fair shares formula has increased its dues from $13 million to $30 million.

Phyllis Lannick, women’s campaign chair of the United Jewish Federation of Tidewater, which has cited its own budget constraints, called on the UJC to make sure its budget “has been looked at and is as lean and mean as it can be.”

And a representative from the Raleigh-Cary Jewish Federation in North Carolina captured both the impact of lean budgets and dissatisfaction with the system in his blunt comment: “We want more and we want to pay less.”

But many federation leaders echo Hoffman’s distinction between compliance on dues and other areas.

It’s the “difference between a speed limit and a caution sign,” David Mallach, assistant executive vice president of the United Jewish Communities of Metrowest New Jersey, said, referring to paying dues and implementing the second year of the Israel Emergency Campaign.

But Mallach thinks the UJC is strong. Referring to the Israel Emergency Campaign, he said, “If people didn’t trust the system, they wouldn’t have turned over their IEC campaign dollars.”

Mallach used American history to frame the issue as an evolutionary kink:

Although the U.S. Constitution was created in 1789, he said, “most people would agree that it took at least until 1865 to settle the issues of federalism. This system is what — three years old? The issues of federalism have not been solved.”

Others see a more threatening pattern.

“I think one has to be able to connect the dots and see there is a growing issue and that it’s UJC’s responsibility to engage on a 24-7 basis with the federations,” Wexler said.

“We’re at a point where with engagement and with consulting and dialogue, that UJC can emerge from this stronger. Without it, this will spread and that will pull the underpinnings out from a strong national system.”

According to Wexler, increasing noncompliance among federations is an outgrowth of a trend on the local level for donors to designate their dollars to certain needs rather than entrusting federations to appropriate them.

Richard Friedman, executive vice president of the Birmingham Jewish Federation in Alabama, thinks federations are swinging back to a strong, central institution, and they are simply struggling to nail the right blend.

“What’s different today is a recognition that the Jewish people are facing serious and daunting issues,” he said. “When we act collectively, in a creative way, we can make a dramatic impact.”

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