Financial concerns underscore UJCs General Assembly

jerusalem | When the United Jewish Communities began planning last year for its 2008 General Assembly in Israel, the goal was to highlight and strengthen the federation system’s support for philanthropic efforts in the Jewish state.

But as more than 3,000 federation lay and professional leaders from North America gathered this week at the Binyanei HaUma convention center in Jerusalem, their attention seemed more focused on the economic gloom and doom back home.

Many federation officials and lay leaders — like those at virtually every other American nonprofit — are supremely worried about the financial crisis, one which is forcing serious concern about budget crunches at best and threatening their existence at worst.

It was the constant topic of conversation among delegates here for the four-day G.A. that ended Nov. 19 — as well as among participants the week before at the UJC’s Lion of Judah Conference on women’s philanthropy, held in Tel Aviv — with a sense that many are waiting for the bottom to drop out.

The major fear is a drop in donations coinciding with a sharp rise in charitable need. Such a combination would pose significant challenges to a network of Jewish federations that collectively raised more than $2 billion last year for local and international Jewish causes — more than $900 million of which came from their annual fundraising campaigns.

Hallway conversations at the G.A. revealed difficult times. Small federations are in serious trouble; the federation in Washington, D.C., has cut the salaries of its top employees and is facing layoffs; the Las Vegas federation is looking at hard times due to the collapse of the real estate market and the shakiness of the gambling industry.

The UJC, the system’s umbrella organization, is trying to remain optimistic, but realistic about the scope of the challenges.

Many of the system’s largest federations already have had their first major fundraisers for the 2008-09 campaigns and have done well, the UJC’s president and CEO Howard Rieger said at a news conference before the G.A.’s opening plenary Nov. 16.

In Chicago, he said, more than $20 million was raised at its opening dinner two weeks ago — a 13 percent increase from last year. And New York, which has the system’s largest campaign by far, raised $42 million in pledges at its opening fundraising dinner six weeks ago.

The Lion of Judah Conference — which, unlike the G.A., includes a fundraising component — raised $16 million, Rieger said, a 13 percent increase over the previous year.

It is encouraging, Rieger said, but all is not well.

“We’re not kidding ourselves — there’s an economic crisis out there. Will it have an impact? We believe it will have an impact,” Rieger told reporters. “We are cautiously optimistic that it won’t be what people think it might be, which is a total disaster. I don’t think that is what we are confronting.”

Still, even the story behind the positive numbers contains cause for concern. While initial total numbers for pledges may have increased, the number of donors has dropped significantly, Rieger acknowledged.

Those who have made pledges are pledging more money, but a number of major donors have told their local federations that they cannot give right now and that the federations should ask again later in the fiscal year.

There is optimism that large federations most likely will come through 2008 reasonably well because their fiscal years ended in late summer or early fall. Small federations with campaigns of $3 million or less, however, might be in serious trouble. Typically their fiscal years don’t end until Dec. 31, and most do not have cash in hand for the pledges that were made in the early part of the year.

The first casualty might be funding for overseas causes. While most federation-raised money goes to help Jews in North America, about 33 percent is used overseas. But federations already facing increased demand from the local social service organizations they fund in their communities could choose to focus their resources to stave off crises at home.

The UJC knows that this could be a difficult time for the system, but its leadership is trying to stay upbeat.

“We are in a period of uncertainty, but the good news is that the number of donors that are stepping up is increasing,” Joe Kanfer, the UJC chairman, said at the news conference.

“The kinds of people who are making contributions to our system are concerned people in the first place,” he added. “This is not a random move for our donors. This is something they take seriously, and it is part of their identity for Jews. And in some ways greater need may make them stretch harder because of the need and because of who they are.”