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Fiscal Challenges Face Federations

The umbrella organization for Jewish community federations seems to have the stars aligned for a fresh start: a new name, a bright logo and an A-list lineup of speakers, including President Barack Obama and Israeli Prime Minister Benjamin Netanyahu, at its annual General Assembly, which will take place in Washington from November 8-10.

Fresh Start: Jerry Silverman is the new leader of the umbrella organization, now entering its 10th year. Image by COURTESY JEWISH FEDERATIONS OF NORTH AMERICA

But the Jewish Federations of North America (formerly known as United Jewish Communities) is also entering its 10th year of existence with a deep fiscal shortfall. With funds dwindling due to the economic downturn, the umbrella group is struggling to make ends meet. It is also fighting off voices in the Jewish community that still question the group’s necessity.

Established in 1999, UJC combined three existing organizations: the Council of Jewish Federations, United Jewish Appeal and United Israel Appeal. It now represents 157 Jewish federations and 400 independent communities in the United States and Canada.

The idea behind UJC was to increase the Jewish community’s ability to raise funds nationally by combining all these groups’ fundraising drives in a joint appeal. The umbrella organization also provides national services that are usually beyond the reach of a single federation, such as a Washington advocacy office, professional training for staffers and emergency fundraising drives when needed.

This year’s drop in income, while similar to the problems plaguing other nonprofit organizations today, is severe. American Jewish federations brought in 11% less over the first nine months of 2009 than they did during the same time period the previous year. In absolute terms, this represents a decline from $809 million to $721 million.

The Jewish Federations of North America (those responsible for the new brand name refused to establish an acronym in order to distinguish the group in the Jewish organizational alphabet soup), which is funded by dues proportionate to the federations’ campaign revenues, underwent another year of budget cuts. The umbrella group’s operating budget is down to $30.3 million, from $37 million last year. Operations are carried out by a staff of 177, down from 208 in the previous year and from more than 300 10 years ago.

It is against this backdrop that the group’s newly installed leaders are trying to make a change. The selections of Jerry Silverman as CEO and Kathy Manning as chair were greeted with high expectations among federation leaders. Silverman has roots in the corporate world and made his mark on Jewish life at the Foundation for Jewish Camp, which he molded into a serious communal force. Silverman started off his tenure at UJC with a listening tour to learn more about communal needs.

Even federations known for their tense relations with the umbrella organization are impressed. Scott Kaufman, CEO of the Jewish Federation of Metropolitan Detroit is singing Silverman’s praises. “I know there was some rancor in the past in our relations with the UJC, but he reached out to us and we are excited about it,” Kaufman said.

The Detroit federation was among a handful of communities that were in a dispute with UJC leadership over the dues they were required to pay to fund the group’s activities. The issue has yet to be resolved. Joe Berkofsky, communications director for the Jewish Federations, said the organization “continues to examine the formula for calculating the dues.”

Several other federations that had paid their dues in full chose to provide their overseas allocations directly without going though the UJC system. Major overseas partners — the Jewish Agency for Israel and the American Jewish Joint Distribution Committee — have been facing a constant decline in funding from federations and have increased their efforts to solicit donations directly from Jewish communities.

While most federations favor slimming down operations of the umbrella organization, some believe that tough times call for an increase in budget and expansion of services. “When you cut the budget year after year, it becomes difficult to run a national organization,” argued Misha Galperin, executive director of the Jewish Federation of Greater Washington.

The $800,000 re-branding program being implemented by the Jewish Federations of North America is not intended to solve the short-term financial shortfall the Jewish communal world is experiencing. It is, however, aimed at increasing the identification of American Jews with the broader federation system and possibly, down the road, influencing their willingness to donate for causes beyond their immediate community. A study conducted by the organization found that while some 50% of American Jews are aware of their local federation, few knew about the umbrella group.

Contact Nathan Guttman at [email protected]

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