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In a defiant move, the S.F.-based Jewish Community Federation voted last week to reduce by $1 million — or one-sixth — its annual contribution to the nationwide fund-raising body for Israel, the UJA.

"This should not be viewed as a vote against giving money to Israel," said Alan Rothenberg, federation board president.

Half the money withheld from the United Jewish Appeal will still head to Israel through other channels. The other half will remain in local coffers to finance Bay Area projects.

UJA national chairman Richard Wexler, who traveled to San Francisco three weeks ago to try to pre-empt the decision, reacted harshly.

"San Francisco's allocation to overseas needs through the UJA system will now become the lowest in both dollar amount and percentage of any of the 19 largest federations in the United States and Canada," he said.

The federation's action will have a "significant and detrimental impact on Jews most in need," Wexler predicted. "There will be people waiting in the former Soviet Union for freedom flights [to Israel] because San Francisco has cut its allocation by $1 million."

Rothenberg said the federation continues to support immigration to the Jewish state. "But it is slowing down," he said, adding that UJA will likely cut lower priority items before it turns away Jews who want to go to Israel.

The federation hasn't formally decided how to spend the newly freed-up money. But JCF overseas committee chair Joelle Steefel said the half-million dollars for Israel will likely finance efforts such as promoting Arab-Jewish coexistence or creating alternatives to Orthodox practice.

The other half-million dollars staying at home is expected to finance new projects from the federation's top priorities: education, outreach, culture, elder care and local resettlement.

The local decision, approved by a federation board vote of 29-1 Thursday of last week, actually stems from a number of factors: impatience with the UJA's internal reform process, a desire for more control over how local money is spent, and concerns about Jewish continuity in the Bay Area.

This isn't the first time the JCF has asserted its independence from the Jewish communal world. In 1984, the JCF set up an advisory board in Israel called the Amuta and diverted $100,000 to fund recommended projects, mostly in northern Israel and its partner city there, Kiryat Shmona. UJA leaders considered the trail-blazing move "total treachery," Rothenberg recalled.

"In 1984, they went crazy. They thought we were so far out. They weren't sure whether to excommunicate us or ignore us."

As the JCF's confidence in its alternative-funding abilities has grown, independent allocations have increased as well. The federation spent $853,000 from the 1996 campaign on overseas projects independent of the UJA, including those recommended by the Amuta.

Nonetheless, the bulk of the federation's overseas money has been and will still be funneled through the UJA. Last year, the JCF sent just over $6 million to UJA from its record $19 million annual campaign. That UJA allocation will now drop to $5 million.

The money sent to UJA in turn goes to the Jewish Agency for Israel through the United Israel Appeal, and to the American Jewish Joint Distribution Committee, which aids Jews and non-Jews worldwide through its humanitarian projects. Chief among the causes funded via UJA are immigration and resettlement in Israel.

The local move comes amid a growing re-evaluation of Israel funding among federations across the country, including the two others in the Bay Area.

Last spring, the Jewish Federation of the Greater East Bay, for example, cut its overseas contribution to about 25 percent of its annual campaign — among the lowest percentage-wise in the country. That's down from nearly 40 percent earlier this decade.

"We have been watching and observing a significant turning inward by Jewish federations around the country," Wexler said.

The average amount federations are sending overseas is now 40 percent of their annual campaigns, he said. Some give more, such as Detroit's federation, which allocates 51 percent, or Chicago's, which hands over 46 percent.

Rothenberg retorted that 35 percent of the JCF's annual campaign money will still head overseas through UJA and other sources — compared to 37 percent last year.

UJA's piece of the federation's, however, will drop to 27 percent of the annual campaign, down from 33 percent last year.

Adding to the complex financial picture is that if the 1997 annual campaign tops last year's — which is expected — the federation is planning to send 35 percent of the additional money overseas. If that is the case, the cut to Israel will not be as high as $500,000.

The single dissenting vote last week at the federation board meeting was cast by Sheldon Wolfe, a longtime member of the federation's overseas committee.

"We've cut our overseas support dramatically over the past 10 to 15 years," he said. "The pendulum has swung too far."

Though he supports the JCF's work in Israel via its Amuta and calls himself "no great defender" of the Jewish Agency, Wolfe said he is worried about funding for immigration and resettlement. Those are Jewish Agency efforts that Wolfe considers "essential, well done and non-duplicative."

"I was concerned, and I guess I was the only one, that maybe we weren't paying our fair share of those functions of the Jewish Agency," he said.

Other local federation leaders emphasized the positive impact of the decision — more control over how money is spent in Israel and more funds for projects at home.

Ron Kaufman, the JCF's representative on the Jewish Agency's international board and a former JCF board president, said the decision wasn't meant to be adversarial.

"We're doing this because the majority of the community feels that we have changing priorities that we have to address," he said. "It's painful for UJA. It's painful for the Agency. But it's going to build Jewish community."

Susan Folkman, chair of the JCF's domestic planning and allocations committee, said the local money hasn't been allotted yet but she expects it will help fund new projects that promote Jewish identity, especially among youth.

In the past, she said, Jews reacted to crises such as the 1973 Yom Kippur War or the airlifting of the Ethiopian Jews.

"We don't want to just react to emergencies," she said. "We want to have our own internal strength."

The Bay Area's two other federations also have been re-evaluating their contribution to Israel.

Ami Nahshon, executive vice president of the East Bay federation, said the decision to decrease the overseas allocations to about 25 percent of the annual campaign came from a "sober" assessment that Israel is no longer a needy, fledgling state.

"We view that as a success," Nahshon said. "When we made our allocation shift, we didn't do it from a sense of disappointment or dissatisfaction."

The Jewish Federation of Greater San Jose sent overseas 27 percent of last year's campaign. But this year the federation is testing a donor-designation program with specific funds for pluralism and overseas rescue and relief. Janet Berg, the assistant executive director at the San Jose-area federation, said the new approach could alter how much money heads to UJA.

The impact of those federations' decisions, however, aren't nearly as dramatic as that of San Francisco.

The East Bay federation's campaign last year brought in $2.68 million and sent $635,000 overseas — compared to the more than $19 million pledged to the S.F.-based JCF's annual drive, nearly $7 million of which was sent abroad.

The San Jose-area federation's campaign last year reaped $1.56 million and sent $417,000 overseas.

Three weeks ago, both Wexler and Joel Tauber, a UJA national officer and former national chairman, traveled to San Francisco to try to pre-empt the move.

Their pleas fell flat.

"They came and said: You should feel terrible about what you're doing. And we feel proud about what we're doing," Rothenberg said.

Steefel added that Wexler "had no creative way to defend UJA. He had nothing new to say. While we've helped the UJA tighten the bureaucracy…there still hasn't been enough change to make members of this community comfortable with how their money is being spent."

In addition, Wexler told the board that elderly Jews in the former Soviet Union will go hungry because they rely on food packages through the Joint Distribution Committee, which receives UJA funds.

But Rothenberg said the federation plans to boost its direct giving to the Joint to make up for any reduction via the UJA.

Wexler also fears that other federations will follow San Francisco's lead.

"If 189 Jewish federations in North America make 189 separate decisions on how people most in need are to be assisted, we will be able to impact even less than we do today," he said.

But Rothenberg said regardless of who handles the money, it will still aid Jews.

"Nowhere in the Talmud does it say write a check to the UJA. We want to help other Jews. We just want to help in lots of ways, not in just one way…We all care about the soul of Israel."