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Other reasons cited by the ADL are the increase in fundraising activity by Jewish and other not-for-profit groups, and the growth of family foundations as a major player in Jewish philanthropy.
With its donor-base shrinking, the ADL has increased its focus in recent years on building its endowment and on ensuring the group’s sustainability in the long term. According to its 2010 tax filings, the ADL has an $80 million endowment, but the use of part of those funds is limited to causes designated in advance by the donors.
A spokesman for the ADL said the group had downsized its staff because of the fundraising decline but had not cut any of its programs. IRS records indicate the group has shrunk from 528 employees in 2008 to 427 in 2010. Foxman’s salary, meanwhile, has increased at an average of 3.45% annually over the last three years, from $563,024 in 2008 to $621,470 in 2010.
The American Jewish Committee has seen a similar trend. Founded in 1906, the AJC is the oldest and arguably the most prominent Jewish organization, with activity that spans from fighting global anti-Semitism worldwide to supporting Israel, bolstering Jewish life in America and advocating energy independence. The drop in contributions to the AJC, to $38 million in 2010 from $62 million in 2006, represents a falloff of more than 38% over five years. IRS records indicate the group has not resorted to staff cutbacks.
Until recently, the precipitous decline in donations did not seem to affect the AJC’s compensation policy for its top staffer. Executive Director David Harris’s base salary went from $454,435 in 2007 to $499,061 in 2009. But in 2010, Harris’s base salary decreased to $440,209. The 2010 AJC tax filings reveal fringe benefits Harris receives, which include retirement compensation, $25,000 in reimbursement for the property taxes on his Westchester home, “occasional” first-class airfare, coverage of travel costs for Harris’s family members accompanying him on AJC trips and a $1 million term life insurance policy, for a total compensation package valued at $739,676.
Rick Hyne, the AJC’s chief financial officer, said that while donations have declined in recent years, he is “cautiously optimistic” about seeing an uptick in 2011. Hyne attributed the steep drop in donation revenue to the economic crisis that began in 2008, and he said the AJC has adjusted to the new financial reality by laying off personnel, not filling vacant positions and cutting expenses.
Jewish federations are another sector of Jewish philanthropy that is experiencing a decline in donations, and here, too, the decrease is led by donors’ desire to have more control over how their donations are used. It was a sentiment heard repeatedly from federation officials in November at their annual conference, held in Denver. Contributions that in the past would have gone to federations, partly to support overseas programs, are being increasingly given directly to specific programs, thus bypassing the federation system.
The losses for such groups as the ADL and the AJC, however, appear to be the gains of some single-issue organizations of both the right and the left.
The most notable Jewish organization that is steadily rising is the American Israel Public Affairs Committee. Despite some fluctuations, the pro-Israel lobby’s donations have grown by 30% over the past five years. Other organizations on the rise include J Street, The Israel Project and StandWithUs, all organizations that are focused on the single issue of Israel. On the social service front, American Jewish World Service, a group that provides aid and development overseas, has experienced a significant jump in contributions in recent years.
Weinberg said that all signs indicate that major multi-issue organizations need to learn to adapt to the new reality, mainly by offering their donors more of a say on how their contributions are used.
“Some organizations have been more successful than others in allowing donor direction,” he said. He noted that “it should be expected to have a lag in getting large organizations to adjust to this need.”
Contact Nathan Guttman at email@example.com
This article was updated on June 11, 2013, to exclude, for clarity, the donations reported to the IRS during 2008 and 2009 while the AJC was switching its financial year.
AJC 990 for 12 months July 2008 - June 2009: $39.7 million in donations.
AJC 990 for 6 months July 2009 - December 2009: $10.6 million in donations.