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Merger Plan Clears Hurdle, Picking Up Support from JDC

January 30, 1996
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A controversial plan to merge the central fund-raising organizations of American Jewry survived an important test this week in Florida.

And an agreement reached with one of the key players, the American Jewish Joint Distribution Committee, clearly has bolstered the prospects that the plan will become a reality.

The plan’s authors are now slated to begin consultations with local Jewish federations across the nation to win support. They would like the plan to be implemented by Jan. 1 of next year.

The consultations are important because they could lead to the biggest change in the American Jewish fund-raising structure since the United Jewish Appeal was founded nearly 60 years ago.

Federation leaders met early this week in Fort Lauderdale, where, for the first time, they heard details of the proposed plan to merge their association, the Council of Jewish Federations, with the UJA and the United Israel Appeal. …TX.-The plan could have been derailed by intense opposition to its call for federations to guarantee a minimum allocation to overseas programs.

While there was no consensus on the guarantee, at least eight major federations voiced support for the merger in principle, according to Joel Tauber, president of the UJA and co-chairman of the committee that proposed the restructuring plan.

Tauber said he is encouraged by the “general consensus on the need for a new entity and the benefits to be derived” from it for federations and the needs of the Jewish people.

But he conceded that there is a long road ahead. “We don’t feel we’re at the end of the battle, we’re at the beginning,” he said. Federations are “beginning to understand why we need the floor, and they want time to think about it.”

The federations, in concert with UJA, raise more than $700 million annually, which is funneled to programs at home as well as projects and services in Israel and around the world.

But campaigns have been flat and a CJF-UJA committee has been working for roughly two years to find ways to generate more revenue and make the system more efficient and accountable.

The challenge has been to satisfy all beneficiaries of the campaign that they will get their fair share under the new structure.

The current structure allows for each federation to decide how much money it wants to keep at home and how much it wants to distribute overseas.

The overseas portion is given to the UJA, which distributes the money to the UIA and to the Joint Distribution Committee. The UIA money goes to the Jewish Agency for Israel, which, among other things, helps Jews immigrate to Israel. The JDC provides humanitarian aid to Jews around the world.

In recent years, federations’ overseas allocations have been declining. The UIA and JDC feared that the merger would only exacerbate that trend unless safeguards were put in place in both the funding mechanism and the governing structure.

To assuage their fears, members of the restructuring committee proposed a three-year floor of $310 million a year in overseas funding, telling federations point-blank that the UIA and JDC “would not vote to end the UJA as we know it without transitional guarantees.”

UIA leaders had already thrown their support behind the plan, but the JDC backing was secured only this week, on the assumption that a funding floor will be part of the plan. The agreement does not specify the amount of the floor, however, Tauber said.

The agreement provides for the UIA and JDC to negotiate the division of overseas funding for the period that the guaranteed floor is in effect. What they agree on will be effective as of January 1997.

After the floor expires – from the years 2000 to 2004 – JDC will have 40 percent representation on the entity that determines the division of overseas funds. The UIA’s successor, which will be the new consolidated entity, will also have 40 percent, while the remaining 20 percent will have representatives of local federations.

Seymour Reich, president of the American Zionist Movement, said he is disturbed by the plan, because he fears that “the Israel portion will be lost in the potpourri” of competing needs.

He said a proposed floor does not ease his concern because “it’s not written in stone” and “I just don’t think they can deliver.”

But Charles “Corky” Goodman, chairman of the Jewish Agency’s Board of Governors, believes that the merger will stem the decline in federation allocations to Israel.

Goodman, who is also a co-chairman of the restructuring committee, maintains that the whole purpose of the consolidation is to generate more revenue to meet escalating demands at home, in Israel and elsewhere overseas.

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