The New American Zionism

3. Fundraising and Philanthropy

62 > 63 hovered just shy of $1 billion annually. At this level, the federations joined the largest charitable organizations in the United States, and their annual campaigns, although not increasing year by year, nevertheless reflected a significant fundraising achievement.1 The stable level of year-by-year fundraising, however, masks a sharp decline in the overall number of donors to the federation campaigns. Over the past two decades, the number of donors to federation campaigns has decreased from nearly 900,000 to fewer than 500,000.2 During these years, the larger contributions from donors who remained loyal to the federation system offset the decline in absolute number of donors. In part, the shrinking number of donors is a consequence of federation strategy that has focused on maximizing the gifts of large donors who are much less costly to court.3 The shrinking donor pool, however, is also a reflection of broader dynamics, including the rapid development of information technologies associated with the Internet. Among smaller donors, an increased awareness of the work of diverse charitable organizations reduced the perceived need for the federations’ key function—to identify worthy causes and package and deliver donations .4 Donors increasingly perceived the federations as “overhead” that reduced the effectiveness of their gifts. Similar dynamics have reduced the number of individual donors to United Way campaigns (which were originally modeled on the federation system).5 Individual federations (there are 157 of them) make their own determinations about the portion of their annual campaigns they will allocate to “overseas needs,” which in the early 1990s still meant the United Jewish Appeal (UJA).6 The UJA in turn divided the pooled overseas contributions between the United Israel Appeal (UIA), which received 75 percent, and the American Jewish Joint Distribution Committee (JDC), which received 25 percent. According to U.S. law, tax-deductible donations cannot be made directly to an overseas organization but must be channeled through a U.S.-based nonprofit organization that retains control over allocations overseas. The UIA is the U.S.-based affiliate of the Jewish Agency for Israel (JAFI) and serves the dual function of channeling tax-deductible contributions to JAFI and appointing one-third of its directors. The JDC, in contrast, is an American organization and therefore able to receive UJA funds directly. Although it was once the senior partner in the UJA, the JDC’s 64 > 65 of individual federations throughout the United States and Canada regarding priorities and allocations. By the end of the 1990s, supporters of the federations’ overseas role were ready to try a new approach. In 1999, the Council of Jewish Federations (CJF), the UJA, and the UIA merged to form a new organization , the United Jewish Communities (UJC). (A decade later, the UJC changed its name to Jewish Federations of North America.) One goal of the merger was to increase federation support for overseas allocations to JAFI and the JDC by giving the federations more direct ownership of those organizations. The notion was that the federations would view JAFI and the JDC as equivalent to their local agencies and therefore remain committed to allocating for their needs.11 From a practical standpoint, the change meant that the federations would have a direct role in the governance of JAFI by gaining the right to appoint the UIA’s portion of its directors (the rest are appointed by Keren Hayesod—the equivalent of the federation movement in Europe and Latin America— and by the World Zionist Organization). At the time of the merger, the federations also created the Overseas Needs Assessment and Distribution (ONAD) committee to systematically review the overseas activities. The aim was to address federation concerns that JAFI and the JDC were engaged in duplicative activities and that JAFI’s operations were politicized by the Israeli government and overly bureaucratic. The ONAD process was intended to professionalize decision making regarding the federations’ overseas activities —to assess needs and improve oversight. It also introduced a degree of flexibility, permitting, for the first time, the federations to earmark a small portion of their overseas donations to particular projects. In practice , ONAD did little to change the cultures and operating styles of the federations’ overseas partners. Nor did the new system motivate federations to devote larger shares of their budgets to overseas needs.12 Throughout the 2000s, combined federation donations to overseas causes (i.e., to JAFI and the JDC) averaged about one-quarter of...