November 9, 2010
For Jewish federations, decline in donors dwarfs recession woes
After three days of schmoozing, sessions and feel-good speeches, the 3,000 or so Jewish federation officials who came to the annual General Assembly may have left New Orleans feeling invigorated.
The view expressed by many top officials was that after two years of a tough recession, the worst is over.
The federations collectively raised about $900 million through their annual campaigns in 2009 and, with two months to go in 2010, they have raised $750 million—within about 4 percent of where they were last year at this time, according to the treasurer of the Jewish Federations of North America, Michael Gelman.
“We are feeling cautiously optimistic that we have pushed from out of the depths,” Jerry Silverman, the CEO of the Jewish Federations, said at a news conference Sunday, the first day of the three-day gathering.
But between the feel-good atmosphere—enhanced by the presence of Vice President Joe Biden and Israeli Prime Minister Benjamin Netanyahu, as well as a day of service learning that took the federation on a path outside the traditional workshop boardroom—some suggested that serious problems lurk just beneath the surface.
With an aging donor base—90 percent of federation givers are older than 45, according to a newly released report looking at fund raising in the last six to 10 years—the federation system must figure out how to engage a new generation of Jewish donors to survive. The impending retirement of the American baby boomers could cost the federations a significant chunk of their donor base.
The total number of dollars raised by the federations through their campaigns grew between 2000 and 2006 before falling over the past three years. Meanwhile, the number of federation donors is about 450,000, down from a high of 900,000 a couple of decades ago, federation officials often say.
The report shows that the country’s largest federations saw a 1.7 percent drop in donors between 2000 and 2003, a 3.8 percent drop between 2004 and 2006, and another 3.8 percent decline in the 2006-09 period.
The Jewish Federations would not make public the entire report, which is being put together by the Federation Benchmarking Project and looks at 34 different fund-raising areas, including agency health, per capita total giving and board growth.
But Andrew Pailer, the organization’s director of consulting, said the other findings show that the federations cannot keep doing business as usual.
“It shows that federations have to evolve,” he said. “They can’t do the same things the same way.”
Collectively, the 157 Jewish federations in North America raise just under $1 billion per year through their annual campaigns and another $1.5 billion to $2 billion through endowments, donor-advised funds and other special campaigns.
Pailer said the recession has nothing to do with the federations’ longstanding problems—a sentiment with which the leader of one of the country’s largest federations agreed.
“It is not a good sign,” Barry Shrage, the CEO of the Combined Jewish Philanthropies in Boston, said of the apparent donor loss. “But nobody knows exactly what to do with it. It is not related to the recession. It’s not related to the quality of the federation.”
While much of the General Assembly focused on building Jewish identity among the young and boosting the Jewish service learning movement, a number of insiders said the annual conference missed the mark by not focusing more on helping federations figure out their own identities and how to tell their stories better.
“It was a missed opportunity,” Jay Sanderson, president of the Jewish Federation of Los Angeles, told JTA.
Sanderson said the federations are experiencing an identity crisis.
“What do we stand for as a system? What is our story and how are we telling it? Is it effective and clear? We don’t have a strong story right now,” he said.
“If you call a person who didn’t grow up in the federation, what distinguishes you from the Friends of the IDF?” Shrage said. “What distinguishes you from the Friends of the IDF is that you don’t have as exciting a story that you can tell in 3 1/2 minutes.”
The GA held several sessions on dealing with the recession and growing needs, but the sessions were sparsely attended. Instead, participants chose to attend sessions focused on Jewish identity issues.
In Boston, Shrage’s federation is tackling the challenge of engaging the young with a complicated plan that will allow the philanthropy to better engage large donors with the hope that the programs they build one day will attract new donors. Shrage said the plan has been slowed significantly by the recession.
“The question is how do you use new technologies to get to the masses, the hearts and minds of the Jewish people that don’t have any idea of what you are as a federation?” Shrage said. “It hasn’t gotten worse due to the recession. I think it is a big, long-range problem which will determine whether the federations will be mainly the domain of the people who give over $10,000 or continue to have the possibility of being a broadly based movement.”
Shrage said that if federations like Boston’s cannot get their affiliate organizations and local synagogues to help more in reaching out to the grass roots to tell the federation’s story, the federation system may not be able to sustain itself in its current form.