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February 13, 2003

Pumping Up the Bottom Line

http://www.jewishjournal.com/community_briefs/article/pumping_up_the_bottom_line_20030214

On Sunday, Feb. 23, 800 volunteers from across the Southland will staff the phones from 10 a.m. to 9:30 p.m. to raise money for the Jewish Federation of Greater Los Angeles. They will try to coax extra money out of existing donors and recruit new ones to the cause of Jewish giving.

Just a year ago, Super Sunday, as the single-day extravaganza is known, raised $5 million to help the Federation underwrite the 15 recipient organizations it funds, including Jewish Vocational Service, Jewish Family Service and Jewish Big Brothers.

This year, with the economy softening and the drums of war beating ever louder, the charity faces an even greater challenge in making Super Sunday 2003 super.

"These are difficult times for nonprofit organizations as they try to build support for their programs," said Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University. "Many fundraisers are having to work harder to raise the same amount of money as last year."

In 2002, the Federation's Annual Campaign brought in nearly $42.5 million. That's slightly 3 percent - $1 million - more than in 1997. (The Federation raised an additional $20 million in 2002 for the Israeli Emergency Campaign.) This year, the Federation expects to match or slightly exceed last year's Annual Campaign results.

The local Federation's fundraising woes parallel those of similar organizations across the country. The United Jewish Communities (UJC), an umbrella group representing 156 community federations, raised about $851 million in 2001, nearly a 20 percent increase compared to 1996. At the same time, the number of donors dipped by more than 58,000 to 651,000, a 9 percent drop.

Federation giving has stalled nationally partly because Jewish charities have focused too much time and attention on wealthy donors at the expense of the larger community, UJC President Stephen Hoffman said. Also, intermarriage and a low birthrate have shrunk the American Jewish population, along with the potential donor base, by an estimated 250,000 over the past decade to 5.25 million today, he added.

On the other hand, federations have successfully raised millions in emergency campaigns for Israel and other causes and from contributors earmarking their giving for specific causes, so-called donor-advised funds, said Gary Tobin, president of the Institute for Jewish & Community Research in San Francisco.

Still, "federations are not the central address for Jewish givers that they once were, and it's not going to change," he said.

What has changed, said Tobin and others, is the nature of Jewish philanthropy, and federations find themselves having to adapt quickly to new trends and expectations.

Federations' fundraising problems notwithstanding, American Jews are more philanthropic than ever. It's just that many now embrace a more personalized approach to giving, experts said. Simply put: Givers increasingly want direct control over how their dollars are spent and are willing to bypass federations altogether to ensure that happens.

To that end, an enormous network of Jewish family foundations have sprung up over the past five years, from about 2,500 to up to 8,000 today. These foundations control an estimated $25 billion in assets, said Mark Charendoff, president of the Jewish Funders Network, a 12-year-old organization representing Jewish family foundations and independent givers.

Those foundations, which fund a variety of causes ranging from education to the environment to AIDS research, have undoubtedly siphoned money away from federations. And as wealth is transferred from aging philanthropists to their children, the importance and number of Jewish foundations is expected to rise, he said.

Many of those freshly minted givers probably won't be giving to traditional Jewish causes.

"Younger funders are far more likely to define Jewish giving as a reflection of their Jewish values than giving to a cause with Jewish or Israel in its name," Charendoff said.

Obviously, that could hurt federations across the country.

Closer to home, The Jewish Federation of Greater Los Angeles faces several hurdles - some beyond its control - hampering its ability to significantly boost donations.

Unlike Detroit, Boston and other older cities, the Jewish community here is geographically dispersed and lacks cohesion, making it difficult to reach. Wealthy Hollywood insiders have largely shunned federation and other Jewish giving in favor of higher profile charitable causes like the environment and animal rights. Jewish charities that attract large Hollywood contributions, like the Simon Weisenthal Center and the American Friends of Hebrew University, tend to have more of a single focus. Until recently, the Southland's large Russian Jewish and Persian Jewish immigrant populations segregated themselves and gave little to Federation.

Still, the Federation bears some of the blame for its problems, experts said.

Federations, including Los Angeles, have come under attack for operating like remote bureaucracies more interested in filling their coffers with cash from a handful of wealthy donors than in addressing the spiritual and educational needs of the community at large.

"A federation should be more than just a fundraising machine. It should be a Jew-making machine," said Gerald Bubis, a former Los Angeles Federation board member and founding director of the School of Jewish Communal Service at Hebrew Union College-Jewish Institute of Religion. "Unfortunately, ours is a fundraising machine."

Federation executives said fundraising is only a small part of what the organization is all about and that it is working to tighten its bond to the public. The organization recently formed a committee to examine how it could improve operations and fundraising, and better serve the Jewish community.

The Federation's campaigns are "not fresh or new or interesting. It's the same stuff regurgitated about the poor and elderly needing help," said Irwin Daniels, a former board member. To dress up its message and increase its relevance, the organization should hire an outside marketing firm, he added.

Bill Bernstein, executive vice president of financial resource development at the Federation, said the organization can only afford to spend $1 million annually on advertising and marketing. He admitted that financial constraints have hindered getting the word out.

"There are a lot of people who don't know about us, and we'd love to have more resources to convey our message and educate people on what we do," he said.

The local Federation's efforts to cultivate future leaders and donors among the community's youth has fallen short over the past decade, said a former fundraising executive at the Federation. The ex-employee, who was laid off last year and asked to remain anonymous, said the organization has failed to generate enough excitement among young Jews or clearly explain its purpose.

In an attempt to address that, the Federation recently inaugurated the Young Leadership Program. Designed to increase cooperation among young Jews in the Federation's entertainment, law and real estate divisions, among others, it replaces Access Program, which fell short of fundraising goals. Young Leadership's strategy is still being formulated, but seminars, dinners and concerts are planned, said Jonathan F. Shulman, directory of the Young Leadership Program.

Given the increased competition for charitable dollars and the Federation's relatively flat fundraising, the organization must reinvent itself to maintain its relevance.

"We better start thinking in a very radical sense about how to engage more people in what we do," Federation President John Fishel said.

Toward that end, The Federation has recently undertaken a series of initiatives designed to broaden its donor base and heighten its role.

Fundraisers are now encouraged to go out and meet face to face with donors. The visits serve to educate givers on what the Federation does, get feedback and "make donors feel valued," Fishel said.

To tap into the business community, the organization has established the CEO Leadership Forum, which meets quarterly to discuss topics of interest, including Jewish business ethics. The Federation's Bernstein, who has also begun soliciting gifts from big local corporations, said he hopes to turn many of the 200 participating executives into givers.

One initiative that has borne fruit is the Los Angeles Jewish Venture Philanthropy Fund (LA-JVPF). Founded last year by Jewish professionals in conjunction with the Federation, the self-funded group has raised $250,000 and plans to award grants to new or existing nonprofits that benefit Jews.

Although LA-JVPF members make the final decision on how to earmark their funds, an example of the more hand-on approach to giving, the Federation has benefited from its involvement: Several LA-JVPF participants have become first-time Federation donors, having contributed more than $100,000 so far, Bernstein said.

Its efforts notwithstanding, some consider the organization a vestige of the past.

Its advocates are not so willing to write off an organization that still ranks among larger charities in the city. Fishel said the Federation is moving in the right direction and remains a vibrant, important part of local Jewish life. If not for the Federation, Fishel asked, then who would fund burials for indigent Jews or support poor pensioners in the former Soviet Union?

Indeed, other federations have launched programs that have become among the most-cutting edge in the nation.

The Boston Federation heavily subsidizes intensive adult Jewish education to build a community of "Torah, tzedek [justice] and chesed (kindness)," said Barry Shrage, president of the Boston Federation. Many Jews participating in the program have increased their donations, he said.

The Boston Federation's Annual Campaign jumped to $28.5 million last year, up nearly 24 percent since 1997.

In the Midwest, The Jewish Federation of Metropolitan Detroit gives $500,000 annually to area synagogues and $2.5 million to local Jewish day schools for scholarships, Chief Executive Bob Aronson said.

By contrast, the Jewish Federation of Greater Los Angeles gives about $100,000 to local temples and $2.35 million to day schools.

The Detroit organization is also seriously considering giving Jewish newborns vouchers for free trips to Israel to "make a connection between the Federation and family in a very personal way," he said.

With a Jewish population of 80,000, or just 15 percent of that of greater Los Angeles, it raised $30.6 million in last year's Annual Campaign, or 72 percent of the amount collected locally (Overall, Detroit raised $20 million more than the Los Angeles' Federation when adding the Israel Emergency and other campaigns.)

The Detroit Federation's attempts at community building appear to have paid off, Aronson said.

"The more you can make yourself relevant to the community and what people are doing in Jewish life," he said, "the more you can get them to contribute."  

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