Los Angeles — When Stanley Gold, the powerhouse steward of Disney’s financial investments, took over last year as board chairman of the Jewish Federation of Greater Los Angeles, he made it known that business would not be done as usual.
And it hasn’t.
Over the past year, Gold, 66, has steered L.A.’s central Jewish charity — which serves the area’s 550,000 Jews — through sweeping changes. In the most recent indication that life at the L.A. federation will not be the same, its president of 17 years, John Fishel, announced on January 26 that he would step down at the end of this year.
Taking a bottom-line approach, Gold has re-envisioned the work of the 98-year-old institution. His changes at the federation — long plagued by a stagnant annual campaign and known for its inability to engage the Hollywood contingent — have rippled through all corners of the organization. Gold has reshaped how the federation relates to its social service agencies, reconfigured the way that donors give, slashed the board, engaged a swath of younger lay leaders, and potentially created a new paradigm for Jewish federations across North America.
“Stanley has brought a business model into the federation,” said Gerald Bubis, the School of Jewish Communal Service at Hebrew Union College-Jewish Institute of Religion’s founding director, who has published numerous studies on the federation system.
Since he took the reins in January 2008, Gold, president and CEO of Disney’s Shamrock Holdings, has ruffled some feathers. He also has gained admirers, who laud his new approach as bold and necessary in a world that is vastly different from the one that existed when federations came into their own in the 20th century.
Either way, there is little doubt that Gold — the man who warded off the threat of a hostile takeover when corporate raiders attempted to seize control of the Walt Disney Co. in the mid-1980s — has made a major impact.
In a phone interview with the Forward, Gold said that his aim was to make the federation more relevant to the lives of a greater number of Southern California’s Jews. He also said that federations on the whole could use some shaking up. “I do believe, generally, that federations need a new reason to exist, because the old ones don’t seem to be working very well.”
Gold noted that while he is not familiar with the varied problems facing federations across North America, some of the changes he has wrought at the L.A. federation might be applied.“One size doesn’t fit all, but there are some lessons to be learned from the things that we did,” he said.
Traditionally, federations have provided core funding to Jewish social service agencies through annual block allocations. In Los Angeles and elsewhere, that includes such groups as Jewish Family Service, Jewish Vocational Service and the Bureau of Jewish Education. Under Gold’s watch, the L.A. federation has upended that historic model, with annual allocations now going to designated programs rather than directly into the agencies’ general coffers.
Now, the board allocates money toward five different issue areas, known as pillars. Those categories are Israel and overseas, Jewish education, services to the vulnerable, community relations and leadership. Committee members for each pillar determine what money should go to which project, no matter the agency providing the service. The funding shift is part of a broader goal of emancipating the agencies.
“The agencies need, because it is healthier for them and for us, to become more independent,” Gold said.
Gold has also taken aim at the rent subsidization that agencies have come to depend on from the federation. In L.A., more than a dozen agencies and organizations are housed at the federation’s headquarters at 6505 Wilshire Blvd. Under the new rubric, those agencies that have had their overhead completely underwritten by the federation will now see a 10% reduction in those occupancy grants, with the possibility of a further reduction over time.
Critics contend that such a move is tantamount to subverting the core mission of a Jewish federation.
“It should be a federation’s function to provide the occupancy and infrastructure to make it possible for the agencies to maximize the service they produce for the community,” Bubis said. “I don’t think there was a sufficient understanding that in that instance, you don’t go in and act like a business.”
As a result of the reduction in rent subsidization, Jewish Family Service of Los Angeles — long housed at federation headquarters — is looking to move. Paul Castro, executive director and CEO of JFS, said that if the organization were to stay in the building, it would mean an increase in rent of about $300,000 over the next three years.
Castro also said that the shift to programmatic funding from core funding presents a hardship for JFS. “On a total dollar basis, the federation is just as supportive as it has always been,” Castro said. “But changing to a program-specific funding formula does create some challenges for agencies at a time when dollars for general operating support are very, very scarce.”
In 2008, the agency received $6.5 million — out of a total operating budget of some $27 million — from the federation. According to Castro, $600,000 of that money previously went directly to general operational support. But beginning in 2009, only $200,000 will go to general support, while the remaining $400,000 has been redirected to agency programs.
In another bold move, Gold, whose volunteer chairmanship ends in December, slashed the number of board members from 145 to 43. The idea, federation leaders said, was to make it easier for the body to come to decisions and set real policy. Those who were cut are now being reconfigured into a congress that will make recommendations but have no real decision-making power.
At the end of the 19th century, Jewish federations were founded by the leaders of Jewish welfare agencies as a way of coordinating communal fundraising. The first federations cropped up in Boston and Cincinnati in the 1890s, and today there are more than 150 federations across North America.
According to Steven Windmueller, dean of the Los Angeles Campus of Hebrew Union College-Jewish Institute of Religion and an adviser to Gold on some of the structural changes, the original federation model worked for the first 100 years of the charity system’s existence. “The reason it worked is that you had a variety of shared values on the part of the Jewish community, and as long people accepted those values, then the system was quite viable,” Windmueller said.
But things changed in the 1980s, Windmueller said, as a result of several factors — among them, the birth of boutique philanthropy. Donors began to give to specific causes rather than giving to clearinghouse philanthropies such as federations. Younger donors, in particular — long isolated from Jewish federations — skew toward this style of giving, and tend to want to know where their charitable dollars are going.
As a result, federations have found themselves, for the past couple of decades, having to compete far harder for dollars. Many of Gold’s changes have come in response to that fact, federation leaders said.
“One of the reasons the annual campaign stagnated is because the traditional givers continued to give, but they get older and pass away, and the next generation is more focused on specific programs and not necessarily on federation,” said Richard Sandler, the L.A. federation’s vice chairman of the board.
From 1999 to 2002, the annual campaign hovered around $40 million. It began to rise slightly in 2003, and in 2008 it reached $50.2 million.
In terms of donors, Gold has sought to bring in more entertainment industry heavyweights. He has also championed “directed giving,” in which contributors earmark their funds — which historically would have gone solely to the federation’s general pool of dollars, via the annual campaign — to certain causes. Fishel said that the L.A. federation has identified 35 causes to which some donors can now contribute.
According to Windmueller, the jury is still out on whether that approach is sound. “I’m not sure we have enough evidence to evaluate or measure this change,” he said. “Part of this is generational, so it will take a period of time to see how this excites the interest of younger donors.”