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‘Front-Loading’ Campaign Offers a Novel Model for Fundraising

An innovative form of fundraising for Jewish day schools in Chicago has met with great success, and may become a model for future fundraising efforts across the country.

The idea is called “front-loading.” Under this arrangement, major donors pledge to donate a certain amount to the local Jewish federation over the next 10 years. The federation then borrows money from a bank against this pledge of future donations, allowing the agency to spend a great deal of money at once for projects that could not be financed piece by piece by the smaller amount it receives on an annual basis.

The Jewish Federation of Metropolitan Chicago began a front-loading fundraising effort last year, officially called the Jewish Day School Guaranty Trust Fund, and has already raised more than $22 million for local day schools. “Distributions will grow from here on out,” said Joel Schatz, media relations manager for the federation, noting that he expects the initiative to reach $50 million eventually, benefiting 15 Chicago-area day schools of various denominations.

The federation will add a 10% match to all payments received this year, and to gifts of $500,000 or more that are paid by 2010.

The money from this fund comes over and above the $3 million that the schools receive from the federation’s annual allocation, as well as the $3.1 million a year that the federation provides schools in the form of social services.

According to Schatz, the program, though run by the federation and Jewish United Fund, has also found support from community leaders, including local rabbis, making the program very much a community effort: “It’s a real coming together of some of the different groups here.”

By providing financial aid and making it possible for some of the schools to lower tuition, the money from the Guaranty Trust Fund will also help make schools more affordable for families who otherwise might not be able to afford a Jewish education for their children.

“The schools are very pleased,” said Steven Nasatir, president of the federation. All money from the new fundraising campaign is going to the Guaranty Trust Fund, guaranteeing transparency in all transactions related to front-loading, which Nasatir said is important in order to develop trust with donors. If people trust the federation, he added, then they might also think of the fund and its good work as part of their estate planning.

“It’s a template for other communities,” Nasatir said of the Chicago program. Indeed, other communities have been impressed enough with the fundraising efforts of Nasatir and the federation to send representatives to learn about the idea. Nasatir sees the campaign as a low-risk idea with very high returns, and thus sure to be of interest to other groups looking for ways to give more money to schools at once, rather than relying on more common methods that sometimes leave schools unable to do anything more than maintain current programs, with no budgetary room to grow.

The Chicago Federation also hopes that national foundations will take up the idea and further stimulate its use among regional and metropolitan federations. “There’s no reason it can’t work in other cities,” Schatz said.

Nasatir said he is very proud to have been involved in the program and glad it is something that will last far beyond this year. “It’s something schools can count on forever,” he said.

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