Federation’s New Overseas Formula: Are There Winners and Losers?

The passage of a new “Global Planning Table” ends a decades-old automatic overseas funding split of 75 percent for JAFI and 25 percent for JDC. What happens now?

(Download this story in Microsoft Word format here.)

Click photo to download. Caption: Harry Weinsaft of the American Jewish Joint Distribution Committee gives food to 3-year-old Renati Rulhater, a Jewish DP in Austria, sometime between 1945 and 1946—a time when the Jewish Federation system's overseas funding split favored JDC. Credit: U.S. Government.

Set in stone for years, the mathematics of overseas funding in the Jewish Federation system are now more malleable. But who “wins” and “loses”—if anyone—following this historic shift?

Up until Nov. 8, the American Jewish community could count on three things: death, taxes, and that 75 percent of the overseas portion of Federations’ annual campaignrevenues would go to the Jewish Agency for Israel (JAFI), with the other 25 percent left for the American Jewish Joint Distribution Committee (JDC).

However, following the Jewish Federations of North America (JFNA) General Assembly in Denver, the JFNA Board of Trustees overwhelmingly approved a needs-based overseas model called the Global Planning Table (GPT)—providinga “new structure and process for Jewish Federations and their partners to analyze the needs of the Jewish people in Israel and 70 nations across the globe,” according to the umbrella organization.

JFNA said the GPT will consist of a committee including JFNA, JAFI, and JDC representatives; chairs of GPT commissions that oversee specific areas; and an executive steering committee representing federations with the three largest annual fundraising campaigns, federations of all city sizes, and JFNA lay and professional leaders.

It’s easy to see this development as a step in the right direction for JDC, which provides relief as well as identity, culture, and social programs for Jews in more than 70 countries. Steven Schwager, the organization’s CEO, said in an interview with JointMedia News Service that JDC has “never been afraid to compete” for funding and that “we hope that once the table is operational we’ll get a fair shake.”

“For the last 10 years, JDC has been advocating that funding should follow need, and now we have a table where people will come together and talk about the needs of the Jewish people and allocate the limited dollars that are available based on needs,” Schwager said.

If JDC comes out a winner, is it fair to call the GPT a loss for JAFI? No, said Brandeis University professor Mark Rosen, who in 2010 came out with a book titled “Mission, Meaning, And Money: How the Joint Distribution Committee Became a Fundraising Innovator.”

“It’s a win for the Jewish people,” Rosen told JointMedia News Service. “If the money is allocated less according to politics and more according to Jews around the world and what their needs are, then it’s only a good thing.”

Alan Hoffmann, JAFI’s director-general, said focusing on the funding split between JDC and JAFI is “oldspeak.”

“We have seen over the past many years a very significant decline in the collective funding, and the entire Federation system is built on the collective, and the overseas global agenda for the Federation has been the glue that has kept the collective together, in my opinion,” Hoffmann said in an interview with JointMedia News Service.

The GPT, Hoffmann said, is an opportunity to restore the collective among individual federations that have departed from the collective and significantly decreased their involvement in the issues of global world Jewry.

Jerry Silverman, CEO of JFNA, also said the relationship between the Federation, JDC and JAFI is “not about the [funding] split.”

“The relationship is about the fact that in the last 80-plus years, the Federation has counted on the JDC and the Jewish Agency for Israel to be our arms to deliver our mission both in caring for the vulnerable across the globe, with JDC, and in building the state of Israel, with the Jewish Agency,” Silverman said in an interview with JointMedia News Service.

Rosen, however, acknowledged the considerable “history of conflict around the split.”

JDC initially received almost all of its funding from the United Jewish Appeal (UJA), and allocated funds based on priorities it identified around the world. But by 2008, nine years after UJA merged with the Council of Jewish Federations and United Israel Appeal (UIA) to form United Jewish Communities (now JFNA), just 13 percent of its funding came from Federation, according to Rosen’s book.

From 1939 to 1952, the overseas funding split was 75/25 in JDC’s favor because the organization ran a large-scale welfare program for Jews living in displaced persons (DP) camps following the Holocaust, according to Schwager. By 1952, the camps were closing, and the formula changed in line with the increased needs of Jews in Israel. Now, “we think it’s time the formula changes to follow needs again,” Schwager said.

After the creation of the state of Israel, JDC took a backseat to the UIA with respect to Federation dollars, and a 25/75 percent funding split between JDC and UIA stabilized in the early 1950s, with JDC receiving the smaller portion. Before Nov. 8, the same 25/75 split existed between JDC and JAFI.

In recent years, JDC negotiated with JAFI for a larger portion of unrestricted JFNA funds. Tensions arose on April 29, 2010 when JDC notified its board members that if JFNA refused to change the 25/75 funding split, JDC would break its policy of consulting with individual federations before fundraising in local communities (to make sure their activities wouldn’t harm federations’ annual campaigns). But on May 17, 2010, JDC backed off that announcement.

Silverman said that in 2009 at a Federation conference in Florida, there was a “very strong decree, frankly, from the [individual] federations, that they wanted to create a new space where we can take on the biggest challenges of the day, and where we could work in new and different ways with our partners who really have been our historic arms in delivering our mission.”

“As we’ve evolved over time, we’ve seen trend changes and shifts in the marketplace and we’ve seen the collective itself, the 157 Federations, begin thinking about things more singularly than collectively,” Silverman said. “We realized that from the point of our process we had not had a place where theFederations could really come could together and really think about the biggest challenges that we face as a Jewish people—where we engage people, where we educate people, where we bring people to the work itself.”

Silverman said JFNA expects that under this new model, JDC and JAFI “will be in the best position to continue to help us in delivering our mission.”

“We think by doing this, the byproduct is that we’re frankly going to have the ability to raise more resources and be able to do more in making a difference in the world,” he said.

Schwager said that if JDC does in fact attain extra funding because of the new model, the organization will focus on expanding its assistance in three areas: care for the elderly in the Former Soviet Union, those classified as “non-Nazi victims” who receive less than $300 per year apiece in services; basic (food, clothing, shelter, winter coats, boots, eyeglasses, etc.) and spiritual needs for Jewish children around the world living in severe poverty; and aid for “the other Israel”—not the “startup nation” where innovation thrives, but the areas with deprived children and adults in need of job training.

JDC’s current operating budget is close to $360 million a year, with $55 million coming from Federation, according to Schwager. JAFI’s budget is roughly $330 million, and $145 million comes from Federation, Hoffmann said.

Experiencing the short end of the Federation funding stick forced JDC “to be creative,” Rosen said. JAFI, by comparison, was receiving much more money from Federation and is now “at least 10 years behind JDC in terms of relative fundraising capacity.”

However, Hoffmann noted that JAFI has a much different historic relationship with Federation than JDC. While Federation is a “stakeholder” in JAFI’s governance, and JAFI looks to Federation as a “portal for the agency’s work with North American Jewry,” JDC “made the decision much earlier than we did to become much more proactive in their fundraising efforts.”

Hoffmann emphasized that “guaranteeing the future of the Jewish people” is the central mission of JAFI, and that he sees the GPT as an opportunity “to get to all 157 [individual] federations.” He said JAFI’s strategic focus on “building a cadre of connected Jewish leaders through Israel experiences and through education” will “bring to the Global Planning Table skills and programs that make collective action an attractive choice.”

At the end of the day, will Federation’s new overseas funding process yield a more “fair” result, beholden to the needs of Jews worldwide and free of politicization? Rosen said “it’s going to be better than the U.S. Congress,” but remains a tad skeptical.

“I have my doubts about whether all the parties can sit down and make decisions that are free of political consideration, but certainly I’d like to see it happen,” he said.

Jacob Kamaras is the Editor-in-Chief of JNS.

Posted on November 21, 2011 and filed under Features.