Jewish funders are hunkering down for the long haul

From the $180 million Walter & Elise Haas Fund in San Francisco, whose namesakes built the Levi Strauss jeans company, to relatively modest upstarts such as the $1 million Joshua Venture, Jewish foundation assets are getting buffeted by the bear market.

Many foundations, it seems, are digging in for a long fiscal storm, by either limiting annual grants or narrowing overall scope.

"By and large, asset bases are way down, and most funds allocate off their asset base," said Mark Charendoff, president of the Jewish Funders Network, which serves as the unofficial clearinghouse for Jewish foundations and the non-federation philanthropic world.

The declining stock market served as the backdrop to this year's 13th annual conference of the Jewish Funders Network, which earlier this month drew some 300 representatives of Jewish family foundations to San Jose, to peer into the future of foundation philanthropy.

So far no one has compiled any precise data gauging the economy's impact on the Jewish foundation world. Yet anecdotal evidence from the conference, one informal survey of participants and one larger study of the wider family foundation world shows everyone is hunkering down for tougher times.

And increasingly for Jewish causes, that matters.

The community still relies on the traditional organized federation world for support, but the more entrepreneurial family foundations have become the alternative form of philanthropy.

United Jewish Communities, the umbrella of 156 federations and 400 smaller communities in North America, raised $840 million in 2002 in addition to $328 million for an Israel Emergency Fund, according to Michael Fisher, a consultant for the UJC.

In the federation world, the faltering economy so far seems to have left little impact. In 2003, the federations have already secured $566 million in general pledges by Passover, Fisher said.

Despite a "lousy" economy, he said, "when Jews are in need, Jews dig deep and come up with big bucks."

It's a different story in the foundation world.

An e-mail survey of conference participants by the Jewish Funders Network found that of 180 foundations that replied, 27 of them, representing $161.3 million in funding in 2002, said they expected their allocations to shrink to nearly $134 million in 2003, a drop of 17 percent.

When asked how they were dealing with the economy, the highest number — 35 percent — said they would be cutting the number of grants they awarded in 2003, while only 11 percent said they would award more grants this year. The rest said the number of grants would remain the same.

Of those survey participants, 19 percent also said they would be narrowing their philanthropic mission, while 3 percent said they would be expanding their focus.

As Charendoff sees it, foundations are taking two main paths. "Either you're viewing this as a time of crisis, and you're hunkering down and wondering about preserving, or you're viewing this as a time of opportunity."

He exhorts foundations to choose the latter.

The Walter & Elise Haas Fund, which awarded nearly $11.9 million in grants in 2002 (about 40 percent to Jewish causes), is raising its annual 5.5 percent giving limit to 6 percent, according to program officer Robyn Lieberman. "The idea was, there was more need out there, and we were not eating into our corpus [total assets] significantly."

The San Francisco-based Koret Foundation, which awards half of its $15 million to $20 million annually to Jewish causes, is keeping a tighter rein on its spending, says Sandra Edwards, the group's director of grants.

The Koret family, which made its money in women's fashion, built a $300 million endowment during the past 25 years. Now it is approaching a "maturation" phase, Edwards says.

"We're scrutinizing projects more closely. We've moved to a proactive kind of grant making," and taking a more "business-like" approach.

Charendoff points out that the rise and fall of various financial markets can dry up the cash flowing into foundations' investments. So while a foundation may meet its $1 million in grant commitments in a given year, it may have less cash on hand for new proposals.

"That new money is the value added that allows not-for-profits to experiment," says Charendoff. "That's an impact on the field that's much broader and deeper than you would normally intuit."

Some foundations are going back to the drawing board and taking a fresh look at what kind of causes they support.

The Haas family has undertaken a "strategic planning process" reorganization, says Lieberman, to identify "those causes which are mission critical."

Jeffrey Solomon, president of the Andrea and Charles Bronfman Philanthropies, which awarded $21 million in 2002, said the Bronfman group is "totally revising our strategy."

There is some evidence that the Jewish foundation picture mirrors the larger foundation world.

Stacy Palmer, editor in chief of the Chronicle of Philanthropy, conducted a study of that world for its March 6 issue, and found most foundation endowments are shrinking.

Their reaction is "really mixed," she said. "Either you've got some foundations saying that absolutely, we have to be giving more because people are having a hard time, or others are saying our assets have been really crushed by the stock market and we're not giving.''