News Analysis: UIA to review how donations from U.S. are funneled to Israel

NEW YORK — Pressure from federations nationwide has forced the central Jewish fund-raising establishment to re-examine how donations are funneled to Israel.

Last week, the United Israel Appeal's board passed a resolution to review its long-running agreement to funnel donations from North America to Israel exclusively via the Jewish Agency.

For decades, the Jewish Agency has received funds via the UIA from annual campaigns of both local federations and the United Jewish Appeal.

Federation executives generally welcomed UIA's move, noting that national leaders had heard their call for a greater responsiveness to donors' changing priorities.

Wayne Feinstein, executive vice president of the S.F.-based Jewish Community Federation and a critic of the Jewish Agency, said he was "delighted" by the decision to review the contract.

The UIA administers the transfer of funds through a so-called exclusivity agreement between the annual campaigns and the Jewish Agency.

That arrangement brought the Jewish Agency this year roughly $200 million from the central campaign and $80 million in U.S. government grants for refugee resettlement.

The new resolution challenges the arrangement, exercising an option to review its terms before its scheduled termination in 1999.

"It opens up a dialogue between UIA, on behalf of American Jewry, and the Jewish Agency, which will invigorate the relationship," said Rabbi Daniel Allen, UIA executive vice chairman.

He said the decision is less a comment on the Jewish Agency than on the wisdom of collective Jewish philanthropy. But the decision reflects big-city federation executives' long-running unhappiness with the Jewish Agency.

They have maintained that the Jewish Agency effectively aids the resettlement of immigrants in Israel, a mission that accounts for 65 percent of its program budget. But they decry what they call the agency's politics, inefficiency and inflexibility.

Individual federations are not technically bound by the agreement. And several federations, including San Francisco's, have bypassed the Jewish Agency and financed projects in Israel directly.

Feinstein said he expects the Jewish Agency will continue to get "the lion's share" of the national system's funds for Israel.

In the meantime, he said, "our donors and board would likely support" the "contours of the new directions" being undertaken by the Jewish Agency. Still, he added, the era of exclusivity is over.

"The time has passed when the [Jewish Agency] can be the exclusive agent for UJA dollars raised for Israel," Feinstein said. "There can and will be other philanthropic agents for collective North American philanthropy."

The Jewish Agency, which has an annual budget of some $400 million, has been making sweeping reforms, in part to win respect and confidence from skeptical federations. A restructuring plan, slated to take effect Jan. 1, 1998, aims to streamline and depoliticize the agency.

It calls for the Jewish Agency to handle most of the functions of its organizational partner, the World Zionist Organization. It also will take over the formerly semiautonomous Joint Authority for Jewish/Zionist Education, long a thorn in the sides of federations that wanted more control over the programs their donations support. Those programs include teacher training, Israel tours and diaspora education in Judaism, Jewish culture, Zionism and Hebrew.

The UIA has begun to visibly market the Jewish Agency's contributions to the struggle for religious pluralism in Israel, a hot-button topic for U.S. Jewish donors. It has also distributed new figures showing that the agency contributed $17.5 million in fiscal year 1997 for "programs promoting tolerance, religious diversity and the unity of the Jewish people" in Israel.

Jewish Agency advocates have asked for time to let the reform and planning initiatives take effect before rendering a verdict on the exclusivity agreement. WZO leaders have threatened to scuttle the restructuring plan if the exclusivity contract is broken.