Robert Belfer, a major donor and lay leader at Yeshiva University, lost an estimated $2 billion in the Enron bankruptcy.
Gary Winnick, the largest individual donor to the Jewish Federation of Greater Los Angeles, has given away almost $100 million to Jewish causes in recent years, including to the Simon Wiesenthal Center, Birthright Israel and Hillel: The Foundation for Jewish Campus Life.
His company, Global Crossing, declared bankruptcy last month and now, like Enron, faces an investigation into alleged accounting fraud.
Amid a recession and several high-profile bankruptcies, Jewish institutions — most of whom were already concerned about the tendency of younger Jews to give less to Jewish causes than their parents did — are nervous.
It is not clear how Belfer’s losses will affect his philanthropy. He declined to be interviewed, and spokespersons for Yeshiva University said they do not know of any change in his philanthropic plans.
As for Winnick, he apparently remains wealthy despite his company’s failure. And his charitable foundation, which is independent of Global Crossing, is valued at $100 million.
Rosalie Zalis, director of the Beverly Hills foundation, said its philanthropy will be unaffected by the bankruptcy.
But the real impact of the recession on Jewish institutions, including the federation system, and Jewish giving remains to be seen, according to philanthropy experts.
Indeed, it is not yet clear how the recession is affecting American philanthropy in general.
Patrick Rooney, chief operating officer and director of research for the Center on Philanthropy at Indiana University in Indianapolis, said data on fund raising for 2001 is not yet available.
However, a survey of fund-raising professionals conducted earlier this winter indicated that “the perception by senior professionals was that it is a more difficult climate in which to raise money,” he said.
Historically — and not surprisingly — giving slows during a recession, Rooney said.
If one accounts for inflation, giving has grown by an average of 3 percent each year in the past 40 years, but has declined by almost 1 percent in recession years, Rooney said.
Jewish federations throughout North America collectively raised $850 million in 2001, a 3 percent increase from 2000. But now many are reporting that their fund-raising campaigns are down somewhat compared to last year at this time.
However, many attribute the shortfall to the fact that fund-raising efforts got off to a slow start in the fall, with most groups hesitant to solicit donors in the weeks after the Sept. 11 terrorist attacks.
They say they are now beginning to catch up.
In addition, many federations report that donors’ sense of greater need — particularly the crises in Israel and Argentina — are helping to offset the fact that they are less flush with cash.
Carole Solomon, chairman of the United Jewish Communities Campaign and FRD department, said it is too soon to tell how the economy will affect campaigns.
“It’s like a guessing game,” she said. “The pledges and commitments we’ve gotten so far show us really doing well. But the issue may show up, and if it does, it will show up at year-end,” when the collection of pledges is completed and reported to the UJC.
Paul Kane, senior vice president of UJA-Federation of Greater New York, which is North America’s largest federation, said he is “very concerned” about the economy, but “cautiously optimistic.”
While in previous years, the federation aimed to raise more money than before, this year it simply is aiming to match last year’s $135.6 million.
Despite a campaign that was $9.5 million behind in October, his group has narrowed the gap to $1 million now, and “we’ve picked it up every day,” Kane said.
In New York, the number of donors is down — but contributions from new donors is actually up by $1 million, something Kane attributes to the heightened visibility of federation social service agencies in the aftermath of Sept. 11.
Kane expects giving from middle class people to be affected more than donations from more affluent ones.
“What’s happened is the most generous and most affluent have continued to make substantial gifts to us,” he said.
In contrast, less affluent donors are “the ones most impacted by the economy, and their excess income is not as flexible as among some of the more affluent.”
It is not clear if that trend is true elsewhere.
Bruce Arbit, co-managing director of AB Data, a direct marketing firm that works with many national Jewish organizations, said giving from the small donors his company solicits is not affected so far, despite a brief post-Sept. 11 “lull.”
However, Arbit, who is a lay leader in the UJC and the Milwaukee federation, said he is hearing anecdotally that impact is higher among the “highest end” of donors, whose giving accounts for the vast majority of campaigns.
“Retirees living on a portfolio whose value went down a third aren’t feeling generous,” he said.
Many major donors to federations and other Jewish groups are apparently delaying meetings with fund raisers, Arbit said.
Jon Friedenberg, executive director of the Jewish Federation of Greater San Jose, Calif., said the technology bust that has affected his local economy dramatically has had surprisingly little impact on his campaign.
However, he said that has less to do with fund-raising savvy and more to do with the federation’s failure, so far, to penetrate the pool of young dot-com entrepreneurs.
“Because we weren’t getting that much money from new high-tech wealth in the first place, when the downturn came we didn’t get hammered that badly,” he said.
Young people, particularly ones who — like many of the wealthy in Silicon Valley — are new to town, are statistically less likely to contribute to Jewish causes than older people with ties to the local community, Friedenberg said.
However, there has been one upside of the recession, Friedenberg said.
“When things go exceptionally well, people become defensive — ‘Gee, the vampire’s here to suck my blood,’ ” he said.
With the economy down, potential donors “feel less able to be generous, but less defensive and more receptive to establishing a relationship and having conversations,” Friedenberg said.
“If we can do that now, then as things get better, when people feel secure financially, we’ll already have a relationship with them and they’ll understand what federation is about,” he said.
Mark Charendoff, executive director of the Jewish Funders Network, an association of more than 300 Jewish family foundations and major individual philanthropists, said that “the perception of times being tighter has a great impact on people’s willingness to spend money.”
Funders are more cautious now than in previous years, he said, particularly because their investments are not yielding as much income — even if their net worth has remained stable.
In addition, many are reluctant to fund anything new this year, he said.
Jewish groups seeking money “are going to have to work harder” to make their case this year, Charendoff said, but “there is still a great deal of money out there.”
In addition, Charendoff is urging funders to try to increase their giving, even if it means dipping into the principle of their assets and not just giving away the 5 percent that U.S. tax law requires of foundations.
“It’s the responsibility of grant-makers to respond to extraordinary times and say they are going to give more than they otherwise would have,” he said.
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.