Birthright Israel Faces Challenge as $20 Million Gift in Doubt

Casino Mogul Could Default on Major Donation, Officials Say

By Anthony Weiss

Published December 10, 2008, issue of December 19, 2008.
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Birthright Israel, the popular initiative offering young Jews free trips to Israel, may be unable to pay for thousands of such trips in the summer of 2009 due to the financial meltdown of its largest donor.

A $20 million pledge to the group from casino mogul Sheldon Adelson is now in question. Two sources close to the organization say that, as a result, Birthright is planning its summer trips to the Jewish state on the assumption that this pledge will not come through.

Still, people connected to the organization said they remain hopeful that Adelson will fulfill his pledge.

“What remains up in the air is the summer trips, and there we’ll have to figure out what to do fairly soon,” said Michael Steinhardt, a philanthropist who helped found Birthright and remains a prominent donor and board member. “We’re optimistic that we will get the money from Sheldon and other money to have a solid summer trip as well, but we don’t know that yet.”

A high-level source close to Birthright, who spoke on condition of anonymity, confirmed that Adelson’s donation is still up in the air. The source said that if Adelson’s money doesn’t come through, and if fundraising doesn’t pick up to compensate, the organization could face major cutbacks in the number of young Jews it sends to Israel in the coming summer.

“Last year we had 25,000 kids in the summer. If we don’t raise money, we’ll have only 5,000 kids in the summer,” the source said.

Gidi Mark, Birthright’s CEO, vigorously denied that the Adelson gift was in doubt. Suggestions to the contrary were “false and outrageous,” he said.

Mark told the Forward that Adelson and his wife had always provided Birthright with “real cash that was given to us, until now, exactly as promised on an agreed-upon timetable of payments.” He added, “We are confident that they will stick to any commitment they have made, as they did in past.”

Michael Bohnen, president of the Adelson Family Charitable Foundation, declined to comment.

Both Birthright and Adelson have been rising stars in the Jewish philanthropic world. Launched in 1999, Birthright Israel has quickly expanded to become one of the Jewish world’s most popular, well-regarded and well-funded organizations. In 2008, the group has already spent $110 million — more than $30 million of that from Adelson — and sent roughly 42,000 young Jews to Israel.

More recently, Adelson has emerged as a force in Jewish philanthropy, fueled by the wealth he has earned from building casino resorts around the globe. In 2007, Forbes valued Adelson’s fortune at $26.5

billion, and the casino mogul has been tagged “the world’s richest Jew.” Though Adelson has generated controversy with his donations to right-wing causes in the United States and Israel, his generosity toward Birthright — totaling roughly $70 million over the past four years — has earned him plaudits in the Jewish world.

But now, both Birthright and Adelson are facing harder times. In Adelson’s case, the fall has been precipitous. The stock of his company, Las Vegas Sands Corp., which constitutes the bulk of his wealth, has dropped 95% in the past year, costing him more than $20 billion on paper. Last month, Adelson was forced to invest $1 billion of his own money in the company to save it from bankruptcy. In another sign of his recent woes, Freedom’s Watch, a not-for-profit funded by Adelson to push a conservative political agenda, will reportedly close its doors at the end of the year, after a political season in which its spending and influence fell far short of expectations.

Meanwhile, Birthright, after a record-setting 2008 — boosted, according to Mark, by enthusiasm for Israel’s 60th anniversary — will be shrinking its footprint this year, though by how much is still up in the air. Birthright officials have said that they expect the organization to spend $75 million on 25,000 trips in 2009, although that assumption could change if gifts such as Adelson’s do not materialize.

To cover the costs of the 14,000 trips it will be running this winter, Birthright was forced to take out letters of credit from its donors (a step the organization has taken before, according to Mark) and raise additional gifts. Mark told the Forward that the organization is planning an emergency fundraising campaign, though he would not provide details.

In a recent move seen as an effort to boost fundraising, the Birthright Israel Foundation, which raises money to fund the trips, announced that it had hired veteran fundraiser Bob Aronson, a close ally of Steinhardt, to take over as its head professional at the beginning of 2009.

Mark said that the organization still had the rest of December before it needed to make a decision about the summer trips. He and many others close to the organization voiced optimism that Adelson would still ultimately follow through on his gift.

“These are difficult times, and Mr. Adelson is a man, in my view, of terrific integrity who is under financial pressure,” Steinhardt said. “I have every bit of faith that if it’s at all possible for Sheldon to do this, he will do it.”

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