February 4, 2009
One Year Later, Gold’s Changes Face Kudos, Backlash
People are starting to get the message that The Jewish Federation of Greater Los Angeles isn’t going to be their grandparents’ umbrella organization, a place that year-in-year-out supplies office space and significant support to blue-blood agencies without being selective or soliciting competition for funds.
Change has been much more than a buzzword in the 13 months since Stanley Gold, president of the investment company Shamrock Holdings, took over as the Federation’s volunteer chairman with the mission to turn the 98-year-old institution upside down and “make it relevant.”
The Federation’s internal government has been re-drawn, and the board now is less than a third the size of the old 133-member parliament. Beneficiary agencies like Jewish Family Service and the Bureau of Jewish Education now receive funding for specific programs instead of their entire operation and must shoulder more of their own expenses, including part of, and eventually all of, their rent. And, in the latest and perhaps more significant sign of change, the Federation’s longtime president, John Fishel, announced last week that he will step down at the end of 2009.
Yet, when Gold was asked to evaluate his own performance in mid-December, he said: “It’s a B, B-minus. If I told you I’ve knocked the cover off the ball, you wouldn’t believe it, and no else would either.”
Gold has brought in big-ticket board members like Westfield’s Peter Lowy and former Paramount CEO Sherry Lansing and has brought young, new leaders to the table. The Federation also increased its annual campaign by about $500,000, or 1 percent, in a very tough economic year. But 2009 is expected to be even more challenging than 2008, and Gold, who a year ago spoke of not only remodeling The Federation but changing the culture, said much more remains to be done in his remaining 11 months as board chair.
But the question some are asking — inevitable in a city as schizophrenic as Los Angeles with its Jewish community that is both diverse and opinionated — is whether Gold’s overhaul of The Federation will be good for the Jews.
Many believe it will be. Some even wish change would happen more rapidly.
“Everybody benefited from the status quo — except for the community,” said Jay Sanderson, CEO of JTN Productions and a former Federation board member. “Most Jewish organizations in this community are completely overstaffed. They are enormous for what they do. There are tired organizations that don’t have a lot of vision and are spending a tremendous amount of money doing the same old, same old.”
“I like what Stanley Gold’s intention is. It just hasn’t gone far enough in The Federation yet, and hasn’t gone far enough in the community,” Sanderson continued. “That isn’t because of Stanley. The pushback is just ridiculous. Many institutions are functioning like they did in the ’50s. There is not a lot of vision in the community, and most of these organizations spend more money on staff and raising money then they do on what their mission is.”
But others — and not just the agency heads that have lost the guarantee of Federation support — have sounded a voice of caution.
“The dimension that is missing, I believe, and was missing before and has not been filled, is community building,” said Gerald Bubis, founding director of the Irwin Daniels School of Jewish Communal Service at Hebrew Union College-Jewish Institute of Religion.
“The big error of most federations in the country during recent times has been devoting more and more of [their] resources to generating funding from major givers. When that collapses, the model breaks down because so many others view themselves as being either disenfranchised or ignored or seen as unimportant.”
Bubis, one of the many individuals whose opinion Gold has sought, gave Gold “high marks for trying to do something radically different, which was needed in the system and is needed in the system.” But, he feels only “lip service” is being given to the issue of community building, a duty that has long proved vexing in Los Angeles.
And then there is the frustration being expressed by those who fear The Federation is preparing to ditch agencies that have served the community for decades in favor of innovative new organizations, particularly those that may be sexier for donors than, say, maintaining an old cemetery or supporting indigent Holocaust survivors.
In multiple interviews with leaders from various Federation agencies — there are 20 locally — many expressed worries about The Federation’s vision for the community.
“It began as a federation of agencies,” said Gil Graff, executive director of the Bureau of Jewish Education. “I would hope that part of its thinking about what it means to be a federation would be a renewal of interest, a continuity of interest, in being closely allied with agencies that helped create The Federation.”
Until 1990, the bureau was a wholly owned branch of The Federation; last year The Federation provided almost two-thirds of the bureau’s $3.8 million budget. Two years ago, in adopting a new strategic plan, the bureau determined it would need to do more of its own fundraising. That effort has intensified during the past year, because The Federation has raised the price for staying in its headquarters at 6505 Wilshire Blvd.
“We won’t take kids on an educational program, or we won’t have a teacher workshop or won’t have scholarship support for kids — we don’t want to do that because the rent is going up,” Graff said. “So we will have to raise more funds to make up for that, because the bureau is not about paying rent, but giving kids a Jewish education.”
Graff and other agency leaders also are worried about The Federation’s new method for distributing funds to community organizations.
This year, The Federation has ignited competition among the agencies for dollars by funding specific programs rather than organizations. The stated goal is to encourage agencies to improve efficiency — implying that to date they’ve been inefficient — and to ensure that the best programs in the community are being supported, not simply programs that always have been funded.
“I realize more funders want to target their money in a way that feels like they are getting more bang for their buck and they are able to direct resources to particular priority areas. It is just a tough economic time to be doing that,” said Paul Castro, executive director and CEO of Jewish Family Service (JFS). “As an agency head, our greatest challenge is to raise general operating support.”
JFS has been particularly hard hit by the economic downturn. Demand for services has skyrocketed while their biggest source of revenue, the state government, has slashed support. The Federation has stepped up recently to help JFS — with a $50,000 grant for its community food bank and $100,000 for a central intake program for people in need — but JFS anticipates further reductions in government support this year and has already laid off staff and cut services.
“We certainly are not going to raise enough money to supplant the cuts from government. When they are $500,000, $600,000, $700,000 a year, it’s inevitable. What we can do is focus resources to help our clients transition out of programs in these times,” Castro said. “Agencies like us can only help the fall. We can’t prevent it. We need to, together, begin to look at the most important priorities for the community.”
Like JFS, most Federation agencies receive the bulk of their funding from third-party sources: either government organizations or donors or both. But now that they have less to count on from The Federation — based on the fact that their funding remained flat for this year even as they’re being asked to pay The Federation 10 percent of the cost of their rental space — agencies are increasing their own fundraising efforts.
Rent at the Wilshire address will continue to increase, as well — agencies will pay 25 percent of the market rate to remain in the building in 2009, 50 percent in 2010 and 75 percent in 2011. Both Federation officials and agency leaders expect that some of the organizations will look for cheaper rent in other parts of town. It’s unclear what that would mean for the future of 6505 Wilshire Blvd. It’s also unclear how that might affect the integrated sense of community that the current setup reflects.
“Everyone is looking elsewhere. It’s a dollars-and-cents approach,” said an agency president who asked not to be identified.
Rabbi Elliot Dorff, rector of American Jewish University who spent two years as the president of JFS and currently serves on The Federation’s board and as co-chair of its committee on the vulnerable, said he is troubled that plans put into place months before the collapse of the U.S. economy haven’t been reconsidered in light of hard times.
“The stock market has lost 40 percent of its value and people’s retirement funds are shot to pieces and people have lost jobs, and the state is in really bad shape,” Dorff said, not mentioning that agency funding from individual donors has declined, too. “Given the downturn and the fact this means there is even greater need now, those things need to be taken into account by Federation regarding whether it hurts those agencies further to take away their rent subventions.”
Dorff said he had hoped that the board would reconsider reducing the rent subventions this year, but what members decided to do was to forgo passing on any rent increases.
Gold said that the agencies’ rent subsidies need to be brought into focus: “They have had a subsidy that has been unseen for them. It is not because we are anti-agency. They need to go out and raise funds and stand on their own two feet. It was an unhealthy relationship that made them dependent on The Federation, and The Federation could no longer support it.”
Yet Steven Windmueller, dean of HUC-JIR’s Los Angeles campus, believes the vulnerable are particularly vulnerable during this transitional period, and it’s too early to judge whether the changes at The Federation will prove to be for the best.
“Uncertainty is maybe the most pressing point that I hear ... whether it will work and be able to capture the excitement and attention of donors,” Windmueller said. No one needed to be told change would be difficult. But even before Gold took over The Federation’s lay leadership, he warned that it would be especially so. And many understood why.
“This is not just a business; this is the Jewish community and these are people’s lives,” said Rabbi Stewart Vogel, a member of The Federation’s board. “But what people forget is if they don’t take that time to reorganize and re-evaluate, then there won’t be a successful Federation to help these organizations. But that process is painful.”
This pain of change is being felt across the country. In all but a few cities, the old federation model is no longer effective, said Gary A. Tobin, president of the Institute for Jewish & Community Research in San Francisco. Most Jewish communities have outgrown the geography that their federation was founded upon. Tobin said Los Angeles, with its miles of connecting freeways and its transient culture, can’t be served by a federation that uses, say, the same model as Baltimore, which is a centralized, dense and highly affiliated Jewish community. Like many federations, Tobin said, Los Angeles’ needs to change if it is going to thrive.
“The interesting thing, over the next 10 years, will be to see which agencies The Federation chooses to support at all. It should be based on something other than history, habit and tradition. It should actually be based on community priorities and what agencies are doing that serve the community best and most,” he said. “I wouldn’t presume that just because they are in the building now, that they will be receiving support five years from now.”
Senior Writer Julie Gruenbaum Fax contributed to this report.