Jewish Federations Struggle With Budget Cuts

The budget deal in Washington and the near certainty of steep declines in federal funding for social services have created a challenge for Jewish communal federations across the country: How to maintain support for hospitals, nursing homes and other services while continuing to provide the education, identity and Israel programs that their donors want?

Federations already spend between one-sixth and one-half of grant allocations on social services. Drops in federal funding may bring pressure to increase the size of those grants relative to other priorities, but federation officials insist that they will instead address the cuts by raising additional money and reducing redundancies.

“It’s very hard for the organized Jewish community and for federations to address this problem squarely and take proactive decisions, because they are understandably afraid of alienating single-issue donors,” said Marshall Breger, a professor at the Columbus School of Law, The Catholic University of America. Breger wrote a widely circulated essay on the subject in a recent issue of Moment magazine.

Jewish federations serve as a clearinghouse for charitable giving, taking donations from members of a local Jewish community and redistributing the funds among grant recipients. In addition to social services, those funds are used to support Jewish education, identity-building initiatives like Taglit-Birthright Israel, and causes in Israel and overseas through the American Jewish Joint Distribution Committee and the Jewish Agency for Israel.

The proportion of federation funds earmarked for social services varies widely by city. Among the 18 largest federations in the United States that provide funding breakdowns on their websites, the proportion ranges from 14% at the Greater Miami Jewish Federation to 49% at the Jewish Federation of Greater Philadelphia.

According to the latest figures available, the federation in New York allocated 47% of grants to local social services; those in Washington, Boston and Cleveland allocated between 31% and 33%; federations in St. Louis and Chicago between 24% and 25%, and federations in Detroit and Pittsburgh, 17%.

In the essay, published in the May/June issue of Moment, Breger argued that those proportions will need to rise to compensate for the drop in federal dollars. But federation leaders said that funds shouldn’t be shifted from fields such as Jewish education and Israel to replace lost federal money.

“If we stopped providing resources for Jewish education and Jewish identity, they would probably stop being interested in working with us,” Barry Shrage, president of Greater Boston’s Combined Jewish Philanthropies, said of his donors. “Part of our success has been to move forcefully in the area of Jewish education and Jewish identity.”

Though the targets of the expected cuts in federal funding are still largely unknown, local federation leaders spoke of the impact that cuts to Medicaid would have on services for the elderly, including nursing homes. Some voiced concerns about funding for vocational training programs.

The Washington office of the Jewish Federations of North America, the national umbrella organization, has lobbied against the cuts. “We’ve been full-court press over the last months, particularly over the last week or so,” said William Daroff, JFNA’s vice president for public policy.

Daroff said that his office was working with government officials to protect discretionary domestic programs that are vulnerable to immediate cuts under the debt limit deal, including social service and human service block grants, housing programs, and emergency food and shelter programs. Once the special select committee that will debate cuts to entitlement programs is convened, Daroff said his office will focus on attempting to limit cuts to Medicaid. Daroff also said that he is concerned about the possibility of reducing tax deductions for charitable giving as a means of increasing revenue, which has been discussed in the context of the debt reduction debate.

Federation executives uniformly maintained that it’s still too early to say how they will respond to the as-yet-undefined cuts. But some hints as to how individual federations may act can be seen in other emergency response programs that have been launched to cope with the overall financial crisis.

Since 2009, some federations have taken extreme measures to come up with extra funds. The New York federation withdrew $6.8 million from its endowment to create multiservice centers that help provide access to services for families hit by the recession. The Chicago federation launched a supplemental fundraising campaign to increase the amount given to social services by targeting the federation’s largest donors. And in Boston, the Combined Jewish Philanthropies closed one agency, then took money from its endowment and raised supplemental funds for social services.

Federation officials say that all these options will be on the table in the coming months. “We can’t not provide some of these services,” said Michael Hoffman, senior vice president of community planning and allocations at The Associated: Jewish Community Federation of Baltimore. “We can’t not provide services to seniors. We can’t not provide some of these services to people with developmental disabilities.”

Hoffman said that his federation would look to donors to fill gaps left by the federal cuts. At Chicago’s federation, executive vice president Jay Tcath said that that his organization would also look to donors. Meanwhile, Jewish Federation of Greater Los Angeles president Jay Sanderson said that his federation would look for inefficiencies at the agencies it funds, in addition to lowering expenses and raising additional money.

Recent changes at the L.A. federation, implemented since Sanderson took over two years ago, may dull the bite of expected lost revenue from Medicaid. Sanderson said that his federation will explicitly prioritize serving Jewish seniors rather than the broader senior population. “Our No. 1 priority needs to be dealing with the Jewish community, and we decided to be upfront about it in a way we haven’t before,” he told the Forward.

In Chicago, Tcath said there had been no proposals to decrease support for non-Jews, and that he had argued against those who suggested that, since federal funds are used by the federation in large part to provide services to non-Jews, cuts would not have a substantial impact on the Jewish community. In fact, Tcath said, without non-Jewish beneficiaries, federally funded federation programs that also support Jews could not exist.

“There’s some sentiment in some quarters that it’s just as well that federations lose the government funding, because it’s not helping our community, it doesn’t directly go to benefit Jews,” Tcath said. “The exact opposite is in fact the case. Oftentimes it’s only that largest platform that allows us to provide certain services to Jews.”

For now, federations are simply bracing for the worst. No matter what federations do to fill the gaps, Shrage said, private philanthropy cannot entirely replace federal funds.

“You’re going to have radical changes in society,” Shrage said. “To the extent that we can be helpful, we will be helpful.”

Contact Josh Nathan-Kazis at or on Twitter @joshnathankazis


Josh Nathan-Kazis

Josh Nathan-Kazis

Josh Nathan-Kazis is a staff writer for the Forward. He covers charities and politics, and writes investigations and longform.

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Jewish Federations Struggle With Budget Cuts

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