World

COMM_NTARY

Jewish rederations:
Working Well?

Editor's Note: The New York-based United
Jewish Communities, umbrella for North
American federations, held its annual Gen-
eral Assembly Nov. 11-13 in Nashville.

or unimportant for federations? How much
do these funds actually help the Jewish
community?
• How should endowments report
their holdings? Endowment funds are
San Francisco
really a mixed bag of unrestricted and
restricted funds under federation oversight.
orth American federations could Philanthropic funds and supporting foun-
and should be doing much better dations are donor-controlled, not federa-
than they are. They matter. They
tion-controlled. How can these funds be
are important. They embody the ideas of
described more honestly and accurately?
community, common cause and the abil-
How can endowments more truthfully
ity to respond to collective concerns. They
report their giving?
are vital institutions and we want them to
• How do endowments measure success?
succeed.
Are endowments doing well if they man-
Federations have been the hub of a vast
age more and more money, give money
system that involves community
to secular causes or give more
centers, family services, bureaus
to Jewish causes? How do we
of Jewish education and so many
assess what the outcomes
more organizations. But this sys-
should be for endowments?
tem is becoming unglued and
• Should endowments spend
changes need to be made.
down? Endowment advocates
This call for action comes from
will tell you that the money they
someone who has worked for three
hold on to is for an emergency
decades with more than 70 fed-
or a "rainy day" Exactly how
Gary Tobin
erations, including New York, Los
hard does it have to rain to
Jewish
Angeles, Cleveland and Detroit. I
loosen up dollars? And where
Telegraphic
have worked as a consultant with
does it need to rain — and
Agency
the Council of Jewish Federations,
upon whom?
the United Jewish Appeal and
• Endowment directors and
scores of constituent and beneficiary agen-
federation executives — who's in charge?
cies. I believe that federations are essential.
Any healthy business has to have a clearly
I don't have all the right answers. But I
functioning chain of command. What hap-
think I have some of the right questions.
pens when the endowment director has
more perceived power and authority than
Endowment Truths
the federation executive, as is the case in a
Endowments are a big federation success
number of communities? How can federa-
story, but trouble is bubbling both on and
tions align their professional leadership to
below the surface. Many federations proud- avoid dysfunctional management?
ly promote the size of their endowments,
noting how much money is under federa-
Retooling
tion management. Is it real?
The federation-agency relationship, the
Touting an amazing growth of funds
core of the federation allocation system, is
under the federation roof paints a not-
outmoded. It does not work anymore, espe-
quite-honest picture. Here are some of the
cially in the context of a single umbrella
key issues that need to be addressed:
campaign.
• Part of or apart from the federation?
Most of the money that federations give
More and more federations are losing
away through the allocations process are
control of their endowment funds as they
entitlements, with the largest amounts
evolve into quasi-independent entities or
going to the same agencies year after year.
completely separate organizations. Should
How can federations develop new, more
endowments be part of the federation?
flexible ways of allocating funds?
Separation may not be good for federations.
There has been an explosive growth in
But is it good for Jewish philanthropy and
the number of innovative programs and
the community?
organizations, only some of which now get
• Are endowments Jewish philanthropies
small, leftover grants. What should the fed-
or not? A close examination of federation
erations' relationship be to these new and
endowment funds shows many, if not most, growing networks of Jewish organizations
of the grants and dollars from donor-
at the local, national and international level?
advised funds and supporting foundations
Who should be in and who should be out?
go to non-Jewish causes. Is this good, bad
Does the constituent/beneficiary agency

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November 22 • 2007

structure make sense any more?
One example of a regular recipient is the
Jewish Agency for Israel, which is one of the
major beneficiaries of overseas funds from
the federation system. Many donors have
no idea what the Jewish Agency is or what it
does, and others are openly hostile to it.
What should the federations' relationship
be to the Jewish Agency? Are there other
organizations in Israel that should be sup-
ported as well, or even substituted?

Annual Campaign
The annual campaign is what built the
federation and generates hundreds of mil-
lions of dollars annually. But in real dollars
it has declined precipitously since 1967
when adjusted for inflation. The donor
base is aging, especially for the largest gifts.
Among the real questions facing the annual
campaign:
• Does an umbrella campaign still make
sense?
Federations provide a small percentage
of the annual operating budgets of many
agencies. Should federations raise and dis-
tribute money to local agencies, or would
it be better to simply help them raise it
themselves?
Should federations once again consider
running one campaign for local needs,
and a separate one for Israel as they used
to? Donors increasingly want to control
where their money goes. Would federations
increase the number of donors and how
much they give by once again splitting up
the campaign?
And what about the American Jewish
Joint Distribution Committee? The JDC is
well-respected by its donors and serves
a particular role in helping needy Jews
around the world. Is it time for JDC to go
its separate way and run its own national
campaign?

Donor Base
The number of donors to the annual
campaign is down over the past 20 years.
Individual federations may see small blips
upward from time to time, especially after a
crisis in Israel.

Federations invest very little in develop.
ing, acquiring and managing donor lists.
How can local federations and the United
Jewish Communities invest in a national
database system?
One potential source of new donations i
non-Jews. The vast majority of Americans
are supportive of Israel, and many use
Jewish community centers, Jewish voca-
tional services and other Jewish organiza-
tions. How can federations expand their
donor base and annual campaign by read
ing out to tens of millions of Americans,
especially those who support Israel?
Part of the problem is name recognitior
The United Jewish Appeal, UJA, once was
the most recognized name or acronym in
Jewish life. Should the federation system
reclaim the UJA name as part of its effort
revitalize its national campaign?
The annual campaign is built on a pyra
mid, with the largest gifts setting the scalc
for all gifts. Major gifts have been stagnan
at the top, and the pyramid is not high
enough anymore. Donors capable of giv-
ing $5 million or $10 million to the annua
campaign do not do so.
How can UJC create national and inter-
national peer groups of the wealthiest
donors to radically change the standards (
giving?

Administration
Federations are shooting themselves in the
foot on some basic administrative issues
that seriously harm their image. Some
internal housekeeping measures will help
them better relate to donors, other Jewish
organizations and the Jewish public in a
healthier way.
• Overhead issues: Federations perform
many services, including community rela-
tions, Jewish education and others, as pro.
grams within the federation that are view
as administrative overhead and make the
bottom-line fund-raising costs look much
higher than they really are.
How can federations structure them-
selves so that programs and services are

Federations on page A26