Federations Drop Overseas Giving Formula

Israel Agency and JDC Will Vie With Others for Share of Funds

New Method: Kathy Manning, chair of the Jewish Federations of North America board, says a new system will give donors more control over their money.
eric stephenson for jfna
New Method: Kathy Manning, chair of the Jewish Federations of North America board, says a new system will give donors more control over their money.

By Nathan Guttman

Published November 10, 2011, issue of November 18, 2011.
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Allocations that the federations send to JFNA for collective allocation to Israel and other overseas needs have dropped by nearly 20% over the past four years. Last year the local federations sent JFNA only $135 million for allocation to the Jewish Agency and JDC. Most federations prefer instead to provide funds directly to individual programs, either by designating their giving to JFNA to a specific program or by contracting directly with agencies and providers abroad, outside the JFNA framework. This provides donors with more control over the use of their dollars, but strips the community of its collective power. Large federations such as those in Boston and Philadelphia already do most of their funding directly, and other federations are struggling to compete with direct fundraising in America being conducted by agencies operating abroad.

“There are increasing dollars going overseas, but there are not increasing dollars going via JFNA through unrestricted means, which I think tells us something,” Manning said.

The obvious loser from the new funding system is the Jewish Agency, which relies on JFNA’s unrestricted funds for nearly one-third of its budget. Under the current system, JAFI received 75% of all federation funds sent abroad via JFNA while the other 25% went to JDC.

With the new plan, this sense of security will disappear.

Despite the potential hit the Jewish Agency could suffer, the organization decided not to fight the decision. “We welcome any process that has the potential to bring to the global Jewish table more players,” said Haviv Gur, the Jewish Agency’s director of communications.

The Jewish Agency has been looking beyond the JFNA funding system for years. It has strong direct ties with leading federations and donors that in fact already bypass the umbrella organization. This year, when the Jewish Agency needed emergency funding for a housing program in Gondar, Ethiopia, it turned directly to the New York federation, which came up with the funds. The Jewish Agency is also relying increasingly on funding from the government of the state of Israel, which partners with the organization in many programs.

For JDC, the new funding policy is seen as promising. The group currently receives less than 10% of its total budget from JFNA’s unrestricted gifts. It has been arguing for years that the 25% share it gets of JFNA’s overseas funds is outdated and unjust. “Money should follow the needs,” said JDC’s CEO, Steven Schwager. “We believe that in a fair process, we will receive more funding.”

JFNA officials dismissed claims that they are abandoning their historic partners. “I can’t imagine a situation that they will not get funded. They have expertise, and they will sit at the Global Planning Table,” Moore said.

The future could spell even more trouble for overseas funding.

Even if the new process succeeds, federations could face growing needs for domestic funding in coming years. Federation officials warned that the cuts to Medicare, Medicaid and Social Security, which are being discussed in Congress, could deal a blow to federations’ ability to continue to provide social services to their members. Cuts could force communities to spend more at home, leaving fewer dollars available for overseas needs.

Contact Nathan Guttman at guttman@forward.com


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