Internal Gridlock Stalls Federation Giving Reform

Scant Progress in Fixing System for Dividing Up Overseas Funds

By Nathan Guttman

Published August 31, 2012, issue of September 07, 2012.
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Numerous federation officials involved in the process, who spoke to the Forward only on condition of anonymity, said Moore quickly learned that turning the GPT into a workable system that would professionally weigh allocations and distribute money based on needs was almost an impossible task. JAFI and JDC, they say, showed no willingness to compromise, and federation representatives participating in the GPT’s four committees lacked the willingness or the clout to make tough decisions.

Moore and Silverman declined the Forward’s requests for interviews.

JFNA made clear that the GPT is still in place and undergoing assessment after its first year, and that the committees are continuing their work. “We have made great strides,” Silverman wrote to his board.

But as this year’s deadline neared for allocating overseas funds collected in 2011, it became clear that the new system would not be ready in time. JFNA therefore resorted to the old formula for another year, dividing $182 million of unrestricted funds raised by federations between JAFI and JDC according to the 75:25 rule.

In a statement explaining the need to retreat to the previous allocation formula, the chair of JFNA’s board of directors, Kathy Manning, said that “more time is needed in order to complete the effort, and we want to be sensitive to the needs of the Jewish Agency and JDC regarding their own planning and budgeting processes.” Manning stated that the GPT was making “solid progress.”

This “solid progress,” however, will be dealt with by a new set of officials starting in September. JFNA decided, after Moore’s departure, to shift responsibility for implementing the new allocation system to the hands of the group’s Israel office. The federation’s Israel arm has long been unhappy with its representation on the GPT, and the move is viewed as an attempt to address the concerns of Israeli partners that the new process could lead to fewer funds going for programs in Israel.

Meanwhile, Jewish federation funds for overseas causes have been decreasing for years. The growing domestic needs of the federations, which are now struggling to provide services for members hit by the economic downturn, and a growing interest in having direct influence on where their dollars are going have led to the dwindling of dollars known as “core money” — unrestricted funds that are not designated for any specific program. These funds have decreased by more than 20% in the past four years.

JAFI and JDC have, by and large, overcome this shortfall by seeking other funding sources, which have included partnering with the Israeli government. The two groups have also begun conducting their own fundraising, independent of the federations’ annual campaign.

Still, the “core” funds are seen as a valuable source of income for both agencies, since they are used for daily operations, emergency projects and programs that don’t receive designated donations.

Contact Nathan Guttman at guttman@forward.com


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