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But the debate over that new agenda—over questions of economic and welfare policy, as crucial to the federations’ work as any topic imaginable—never happened. Like the peace process, economics and poverty were discussed only in how-to sessions on techniques for coping with the current dismal reality. The tax, regulatory and welfare policies that underlie Israel’s dilemmas—and America’s—were off the table.
Blandness and conflict avoidance are often blamed for a much-discussed malaise plaguing the federation system. The malaise is starkly visible in the network’s central mission, raising funds to support the many educational, cultural and social-welfare institutions under the federated umbrella. The annual fundraising campaign had close to 900,000 individual donors nationwide at its peak in the late 1980s. Today it has half that number, some 450,000.
Revenues are declining, too. The annual campaign peaked in 1974, following the Yom Kippur War, at $683 million. That’s equivalent to about $3 billion in today’s dollars. The next year, with the war crisis over, it dropped to $465 million, equivalent to about $2 billion today. From there it rose steadily, but more slowly than inflation. This year’s total will be around $900 million. Even ignoring the 1974 postwar emergency, that’s a drop of more than half in real dollars in four decades, despite an explosion in individual Jewish wealth.
With its donor base aging and fewer young Jews coming forward, federations have made up the difference by building massive endowment funds. They currently hold some $14 billion in assets, yielding about $1.4 billion yearly in interest income for programs in addition to the $900 million in donations.
On top of their other troubles, the federations face a decline in the appeal of Israel. Israel was for decades the federations’ calling card and received between half and two-thirds of their combined revenues.
Today Israel is a first-world country, less desperate for aid than it once was. Its share of federation campaigns is down below one-fourth. Moreover, debates over its policies make it as often a divider as a uniter. Paradoxically, while the federations’ task in supporting in domestic welfare and Jewish education is more critical than ever, but they lack the simple mobilizing message they once had.