The Jewish Federations of North America and its two primary overseas partners have reached an agreement in principle over how to divide the money raised by local federations.

The Jewish Agency for Israel and the American Jewish Joint Distribution Committee have been struggling with the JFNA for nearly two years over how to split the more than $100 million raised by the federation system for overseas needs. The two overseas partners have traditionally split the money using a formula that gives 75 percent of the funds to the Jewish Agency and 25 percent to JDC.

But in recent years as the pool of money has shrunk ? dropping from more than $140 million several years ago to slightly more than $100 million this year ? both agencies have become strapped for cash. The JDC in particular has pushed for a larger piece of the funding pie, while the Jewish Agency has struggled to maintain its share.

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On September 21, the three organizations agreed in principle to continue their relationship. While it remains unclear how closely the system will adhere to the traditional 75-25 split, the three sides apparently will return to a process that divides the money based on merit and need, as opposed to simple mathematics.

Also, the JFNA will be able to bring in additional partners in some cases, though ?the bulk of the money? will still go to the Jewish Agency and the JDC, according to a source with knowledge of the situation.

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