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Home > Research Articles > Finding ways to cut liabilities

The NonProfit Times

Saturday, October 19, 2002

Fundraising remains strong through United Jewish Communities (UJC), a network of local federations that has been the main vehicle for individual giving to support charities at home, in Israel, throughout North America and abroad -- although some donors want more control over their charity.

While the ranks of Jewish family foundations are swelling, many are taking a more active role in causes they support, and joining other funders to back new initiatives.

And American-born Jews are backing secular causes. The eight biggest gifts by Jewish families or foundations in recent years, for example, totaled $1.47 billion, all to secular groups like New York University and the medical school at UCLA, said David Altshuler, president of the New York-based Trust for Jewish Philanthropy.

The trust, an arm of UJC formed to stimulate, strengthen and connect Jewish donors, plans to map and track Jewish philanthropy as it becomes more hands-on, targeted, collaborative and market-driven in the face of younger and more entrepreneurial donors, and the onset of a huge transfer of wealth between generations.

“This is an enormously interesting and big sector that is making some changes that are parallel to the changes happening more generally,” said Altshuler, who joined the trust as its first chief executive officer in January, 2000 after serving as founding director of the Museum of Jewish Heritage in New York.

“There is a complex mixed market,” he said, “some of which is community-oriented and some of which is more independent and free-market-oriented.”

While they traditionally gave to community funds that supported local agencies and groups in Israel and elsewhere, American Jews are creating their own funds and foundations, said Mark Charendoff, president of the New York-based Jewish Funders Network, a membership group that supports and connects family philanthropies.

“In the past, the department-store approach was more popular, where the donor could contribute to a central address and have his money allocated to a wide array of beneficiaries,” he said. “Younger donors prefer a boutique approach that allows them to select the specific cause that is addressing a more narrow need.”

At least 7,000 Jewish family foundations -- more likely 15,000, up from 2,500 six years ago -- control assets totaling $25 billion to $30 billion, he said.

Individual Jews also are giving more, planning their gifts, designating their support for particular causes and asking agencies that receive their support to measure its impact. And, philanthropic groups are advising and supporting donors.

“There’s a great opportunity for federations and others to really use their ability to understand planning, good allocating and good oversight, and to become the equivalent of money managers on the philanthropic side,” said Jeffrey Solomon, president of the Andrea and Charles Bronfman Philanthropies in New York, Canada and Israel, and former chief operating officer of the UJA-Federation of New York.

Steven Hoffman, UJC’s president and CEO, said individual donors always have been engaged, driving the creation of new agencies and services. “There’s a role for support of the federation and the annual campaign, and there’s a role for individual interest,” he said.

Individuals last year gave more than $850.5 million to annual drives by local UJC federations -- up from nearly $719 million in 1991, said Michael Fischer, senior consultant to UJC.

In addition to raising $770 million this year in annual drives, federations raised another $311 million to protect Israeli children and families from terrorism -- plus $1.2 billion last year for endowment funds and foundations, which grew to nearly $8.2 billion. Fueling that growth have been donors making larger gifts and wanting to be more active in causes they support.

While the number of donors to annual federation drives fell to 650,000 in 2001 from 708,000 in 1996, for example, the decline was among donors giving $1,000 or less and was more than offset by an increase in donors making larger gifts. Nearly 15,000 donors gave $10,000 or more to annual drives last year, Fischer said.

Philanthropy slowly is becoming more businesslike, experts said, with entrepreneurial donors wanting to strengthen charities’ internal operations and effectiveness. “It’s going to become much more a market-based economy,” said Solomon of the Bronfman Philanthropies.

UJC, for example, is enlisting national lay leaders to advise newer federations in communities such as Broward County, Fla., and Las Vegas, said Hoffman, who also wants members to help finance startup needs for emerging communities, whose annual campaigns cannot be expected “to provide enough venture capital to grow the business by itself.”

Some local federations have helped entrepreneurs form venture-philanthropy funds that invest in innovative projects.

Pooling nearly $700,000 over two years in a venture fund at the Jewish Federation of Greater Washington, for example, 25 philanthropists reviewed 165 proposals and funded five, including a for-profit spin-off of Jewish Family Services to provide elder-care and generate profits to serve poor people, said Bob Hyfler, the federation’s chief operating officer.

Misha Galperin, the federation’s CEO, said groups the fund has backed already had built effective operations through years of federation support.

Educating donors and connecting them with one another or with Jewish agencies and causes is a focus of the Jewish Funders Network and the Trust for Jewish Philanthropy.

In addition to offering staff functions to its 900 members, most of which have no staff, the Funders Network is hiring an officer to team philanthropists and philanthropies with one another, said Charendoff, the Bronfman Philanthropies’ former vice president.

The trust’s collaborative role builds on similar efforts in recent years.

Spearheaded by philanthropists Charles Bronfman and Michael Steinhardt, for example, 14 funders, each giving at least $5 million, joined local federations and the state of Israel to raise $210 million to provide free 10-day trips to Israel for young adults.

The initiative, birthright israel, has sent 30,000 Jews ages 18 to 26 to Israel during the past two years, with another 12,000 to visit this year.

The Charles and Lynn Schusterman Family Foundation in Tulsa, Okla., and the national Hillel organization have formed the Israel on Campus Coalition, a partnership of more than 25 national agencies focused on Israel education and advocacy on U.S. college campuses, said Lori Eisen, the foundation’s program director in Washington, D.C.

And, the Trust for Jewish Philanthropy has launched the Jewish Coalition for Service -- raising $500,000 from a handful of foundations and hoping to raise millions more -- to connect, support and expand the work of more than a dozen groups promoting volunteerism and social justice in North America and abroad.

It hopes to develop and expand to other communities efforts by groups such as the Jewish Community Relations Council in Boston to increase volunteerism and social-justice work by college students, young people and others.

And in mapping Jewish philanthropy, Altshuler said, the trust will work with experts in individual fields such as human services, education, culture, community relations, religion, Israel and world Jewry -- measuring giving in each field.

“What we’re trying to do is stimulate this sector, which already is large,” he said, “and make it more effective, efficient and energized.”