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Fundraising Debacle
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M
will total about $40 million less than
foundation officials had anticipated
before the recession.
Donations Down
any people in the Jewish
nonprofit world would
probably like to wish away
5769.
At this time last year, most econo-
mists were aware the recession was
on our doorsteps. The financial insti-
tutions Bear Stearns and Lehman
Brothers already had collapsed, the
housing market was in the tank and
joblessness was on the rise.
Nonprofits also had gone from anx-
ious to red alert by the time the High
Holidays hit.
Yet somehow, the situation wors-
ened.
In 2009, according to a recent
Foundation Center survey of more
than 1,200 foundations, overall foun-
dation giving is expected to decrease
and nearly half of the surveyed
foundations predict reductions in
the number and size of their grants.
A substantial share (44 percent) also
anticipate reducing the number of
multi-year grants.
Guidestar, a nonprofit watchdog,
also detected alarming trends in its
survey of more than 1,000 nonprofits
between October and February.
More than half of the organizations
experienced a decrease in contribu-
tions, and about a third of grant
makers gave less in grants over the
five-month period. Of the organiza-
tions that have sliced their budgets,
the majority are making ends meet
by cutting services and freezing staff
salaries, and 30 percent have resorted
to layoffs. Eight percent said they
were in danger of closing down.
In the Jewish nonprofit community,
similar signs of philanthropic reces-
sion have been clear. Even the stron-
gest nonprofits have been hit hard.
The largest foundation, the
Baltimore-based Harry and Jeanette
Weinberg Foundation, lost 13 per-
cent of its assets, or $300 million, in
the past year. The foundation, with
60 percent of its money invested in
the plunging stock market, dropped
from $2.3 billion to $2 billion, and its
allocations over the next two years
Birthright Israel cut $35 million from
its 2009 budget, and it has had to
revamp how it raises money, shifting
toward a more grass-roots approach
focused on smaller donations.
The fundraising of the UJA-
Federation of New York is down 11
percent. The federation in Boston will
cut its allocations by 15 percent. The
MetroWest federation in New Jersey
has a $3 million shortfall. Federations
across the board are cutting back.
The UJC/Jewish Federations of North
America cut staff twice in the last
year and had to slash its budget from
$37 million to slightly above $30 mil-
lion.
The Jewish Agency for Israel has
had to cut $80 million from its bud-
get thus far. The American Jewish
Joint Distribution Committee is fac-
ing a $40 million budget cut. It let go
40 staffers in May and will cut more
this year.
The alphabet soup of the Jewish
world has laid off hundreds and
hundreds of employees; nearly every
organization has had to let go of staff.
And that's before we even get to
Bernard Madoff and his $65 billion
swindle, which completely wiped out
several foundations and took a major
chunk from the endowments of sev-
eral institutions and organizations.
What the long-term effect will be
on Jewish charity remains to be seen.
A philanthropy insider who worked
for a foundation that was closed
because of Madoff's scheme predict-
ed that the Jewish community would
lose more than $2 billion a year in
charitable donations for the next five
years. Conversely, the chief fundraiser
from a $300 million-a-year Jewish
organization said he had yet to hear
one donor say he or she could not
give because of Madoff losses.
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Changes Needed
Despite the carnage, there may be
a silver lining: The current crisis is
forcing communal leaders to figure
out how to build a more sustainable
nonprofit system.
Happy Healthy
New Year!!
FREE SCHEDULED MAINTENANCE ON EVERY SAAB YOU BUY OR LEASE
Welcome 5770! Last year was one
nonprofits would much rather forget.
Jacob Berkman
Jewish Telegraphic Agency
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Fundraising on page 48
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