An ad from Federation in the Dec. 13, 2002 issue of J. displayed a mosaic of faces of locals who volunteered to make calls for that year's Federation annual campaign. (Photo/J. Archives)
An ad from Federation in the Dec. 13, 2002 issue of J. displayed a mosaic of faces of locals who volunteered to make calls for that year's Federation annual campaign. (Photo/J. Archives)

Federation makes a bold change, moving from community grantmaker to philanthropic adviser

Forty years ago, Phyllis Cook began her long career at San Francisco’s Jewish Federation as a volunteer, soliciting donations. One meeting in particular still stands out in her mind.

It was 1983, and she had been asked to secure a donation from Edgar Sinton, a towering figure in the Bay Area Jewish community; he became Federation president in 1928 and stayed involved in Jewish communal life for decades.

“I was like a kid to him,” Cook recounted in a recent interview with J.

Sinton was in his 90s, and as he and Cook spoke in his office, he shared his admiration and appreciation for what she was doing. (She later went on to help build the Federation’s endowment fund into a billion-dollar enterprise.)

“He liked that this young woman was raising money for the Federation, for Jews. It was continuing tradition,” she said. He recalled how when he was a boy, Jews would come by on Fridays before Shabbat, “raising milk money for the children.” In those days, “Jews took care of their own, because nobody was going to take care of them,” she said.

That imperative has been the hallmark of Federation fundraising for over a century. But in more recent years, the landscape for Jewish philanthropy in the Bay Area has changed decidedly, in step with national trends. The ethic of every Jewish family contributing to the communal pot — what one current Federation board member referred to as a Jewish community “tax” — no longer exists. Gone are the days when the engine of Jewish philanthropy in the Bay Area was thousands of people giving “milk money” to the collective. They’ve been replaced by discerning donors who like to control how they give.

In the past 15 years, the number of people donating directly to the annual campaign of the Jewish Community Federation and Endowment Fund has fallen year over year, while donor investments in charitable vehicles under its management have continued to grow.

(Courtesy Jewish Community Federation)
(Courtesy Jewish Community Federation)

Marking a dramatic shift in its giving model, in September the Federation began rolling out a new strategic plan that changes its role to that of a community foundation, rather than a direct provider — turning its strategic focus toward philanthropic advisory and away from communal fundraising. The Federation is presenting the change as something with great promise for the community, though its full implications are still coming into focus.

“This is a fundamental shift in the model of the Federation, which for most of its history relied on collective giving,” said CEO Joy Sisisky. “People are giving more. They’re just wanting more say in how their dollars are spent.”

A downward trend

A primary catalyst for the change is the pronounced downward trend of smaller donations from large swaths of the Jewish community. In 2008, the Federation raised $32 million from more than 13,000 donors via its annual campaign, which funnels money into a general fund that the Federation can use as it sees fit. That number has been in steady decline: In 2022, the annual campaign raised $18 million, with millions of that earmarked for Ukraine war relief. The number of donors shrank by more than half, to 6,192.

What complicates this story, though, is that the Federation isn’t losing money. In fact, it has seen its total coffers — what it calls “assets under management” — grow to over $2.2 billion, making it one of the largest Jewish community federations in the country.

Between 2010 and 2022, its assets under management increased 42%, according to Federation figures.

a chart showing an increase from 2010-2021, then a drop-off
(Courtesy Jewish Community Federation)

Most of the growth has come from its endowment, largely made up of donor-advised funds (known as DAFs), which number over 1,100, dozens of supporting foundations and other endowed funds.

Millions are granted each year from DAFs, a popular charitable and tax-advantageous investment that allows donors to recommend their preferred nonprofit grantees. Tens of millions more are granted through supporting foundations, often established by wealthy families and managed by Federation staff to support the grantmaking decisions of those families. A smaller portion is allocated for impact lending or “personal philanthropy.”

When it comes to those funds, however, donors maintain an advisory role over how grants are made. The result is that while the Federation’s assets are growing, its authority over grantmaking decisions has become more constrained.

“The pie that we had was getting smaller,” said Arthur Slepian, the Federation’s immediate past board chair. “I’ve been on the board long enough to remember when our annual campaign was raising more than $30 million a year.

“It becomes like a tug-of-war in the community, because that community is also not static,” Slepian said, referring to the shrinking amount of money in the Federation’s general fund, used in large part to fund community programs, as well as the Federation’s overhead.

“It’s not simply that we’re giving a set of existing organizations fewer dollars. There are also new organizations being created … And if you want to fund those organizations, you’re taking money away from the organizations that you’re currently funding.”

With the practice of communal giving waning, and the large majority of donors giving through restricted funding vehicles, the Federation is now fully embracing its role as a philanthropic adviser, cutting staffing on the programming side and hiring staff to support donor-advised funds and supporting foundations.

Meanwhile, the Federation has been supplementing the funds it still raises in the annual campaign with millions in revenue from administrative fees paid by donor-advised funds. These fees, not the annual campaign, will cover the Federation’s overhead moving forward, according to the new strategic plan.

“That’s a really significant shift,” said Sisisky. “It allows every dollar that we raise from the annual campaign to go out the door in grants, or to be invested in programs.”

Community largesse

In 1910, San Francisco’s small but growing Jewish population established the Federation of Jewish Charities, a precursor to today’s Federation. Jews were expected to sign up for “subscriptions,” a 1905 proposed plan in the Emanu-El newspaper reads, contributing what they could to the collective.

This Federation supported organizations like the Eureka Benevolent Society (which later became Jewish Family and Children’s Services), multiple sisterhood groups, an orphanage, a Jewish burial service, Mount Zion Hospital and a free religious school. It even supported purely social groups, like the Hebrew Ladies’ Sewing Society.

Today the Federation directly supports a wide constellation of Jewish organizations across the Bay Area, from Jewish preschools to K-12 day schools like San Francisco’s Jewish Community High School, to college Hillels, summer camps and cultural institutions, such as the Contemporary Jewish Museum and J., this news organization.

In the fiscal year ending in June 2022, the Federation spent about $20 million on its own directed grantmaking, plus an additional $5 million on Federation-run programs.

The building of the S.F.-based Jewish Community Federation. (Photo/From file)
The building of the S.F.-based Jewish Community Federation. (Photo/From file)

A majority of the Federation’s grantmaking, though, relies on its endowment. In the same fiscal year, 2021-22, some $160 million was distributed through a combination of donor-advised funds ($77 million) and supporting foundations ($83 million).

While this shift corresponds with national trends throughout the philanthropic world, it adds a layer of complexity for a Jewish community institution like the Federation. For one thing, DAFs and supporting foundations can give to Jewish causes — but they do not have to.

The $160 million disbursed in 2021-22 from the two charitable vehicles totaled 11,000 grants to over 3,200 organizations. About 17% went to Jewish grantees, according to Federation figures, and 83% went to nonsectarian organizations like civil rights nonprofits, universities, museums, symphonies and social justice organizations. (A massive partner foundation, the Sandler Foundation, is a left-leaning organization that gives mostly to nonsectarian causes, a big contributor to the 83% figure.)

Remove grants made by supporting foundations, and 43% of total dollars from donor-advised funds went to Jewish causes, according to the Federation.

In recent years the top U.S. foundations donating to the Jewish community have given about 42% to Jewish causes, according to a 2018 report sponsored by the Avichai Foundation, “Giving Jewish: How Big Funders Have Transformed American Jewish Philanthropy,” putting the Federation’s DAF-holders in line with national averages.

A new direction

Supporters of the new strategic plan say it has the potential to carry the organization forward into the 21st century, and that it might be very lucrative.

While much of the public marketing and communications for the new plan has been steeped in institutional language, the essence of the transformation is unique among American Jewish federations.

“What I find most potentially exciting about this — it conforms to what I would like to see happen” with federations, said Jack Wertheimer, a professor of Jewish history at the Jewish Theological Seminary who authored the 2018 Avichai report.

“There’s a way of educating donors and informing them about what the possibilities are in the Jewish sector and why they are worthy of support,” Wertheimer told J. “That can’t be dictated, because the donors are the ones who call the shots when it comes to how their money will be spent.”

He described what he hoped would be a “robust holistic philanthropic advisory” service, rather than a “passive hands-off role” that most federations take toward their DAF-holders.

Joy Sisisky in her office at the Jewish Community Federation in San Francisco. (Photo/Aaron Levy-Wolins)Joy Sisisky, Jewish Community Federation, Federation
Joy Sisisky in her office at the Jewish Community Federation in San Francisco. (Photo/Aaron Levy-Wolins)

“We still think that there’s a lot of power in collective giving,” said Sisisky, referring to grant-making directed by Federation staff on behalf of the Jewish community. She described the benefits: “leadership, that represents sort of a broad brush of the community, can put their finger on the pulse and still make decisions that are in the best interest of the community.”

While “we believe that the annual campaign still plays a critical role in our work going forward, I just don’t think it should be the only measure of success for our work,” she said.

“If you focus just on donor-recommended grants that are coming from donor-advised funds and supporting foundations, that has been steadily increasing by tens of millions of dollars each year,” Sisisky said.

Pain points

The transformation has not been without its challenges.

As changes have taken place in the Federation’s financial structuring, some Jewish community organizations have lost their Federation grants or seen dollar amounts drop. Among them is Wilderness Torah, a unique nature-based Judaism nonprofit that melds environmental stewardship and Jewish tradition. Wilderness Torah “paused” its annual Passover in the Desert celebration, the flagship event for the organization, this year.

Wilderness Torah's signature annual event, Passover in the Desert, drew its biggest crowd yet to the Mojave Desert, April 5-10, 2023. (Photo/Julia Maryanska)
Wilderness Torah’s signature annual event, Passover in the Desert, drew its biggest crowd yet to the Mojave Desert, April 5-10, 2023. (Photo/Julia Maryanska)

The Federation also has ended some of its own staff-run programming, which relied on general funds raised during its annual campaign.

It cut a longstanding early childhood education training program for teachers last year, moving some of the funding over to Jewish LearningWorks, and this year it suspended its Federation Fellows program, a leadership training program for up to 20 young adults who are considered “the next leaders of the Jewish community,” its website says. The program was cut abruptly, said one person who applied but asked not to be named to candidly discuss their experience.

“It was a painful process,” the person told J. They submitted an application, and were interviewed for the program. They spent weeks waiting for a response, then were told that the program would not be happening.

“They said ‘we changed strategic directions and we couldn’t say anything [earlier] because we just approved our plan,’” the person recalled. “They said ‘the program doesn’t fit with our new strategic direction.’”

Some of these changes have been happening more gradually. Over the last 10 years or so, the Federation has ended programs such as the dating event Blue Monday, the annual fundraiser Super Sunday and the community gathering Israel in the Gardens.

Some told J. they have felt the loss of the old-school Federation, which was not considered only a fundraising clearinghouse but a convener for the Jewish community for Jews from many different levels of religious observance.

“I’m a big fan of connective tissue, bringing people together,” said a former Federation board member, who asked not be named in order to speak candidly about the new strategic direction.

“Even if it didn’t raise a lot of money, there were benefits to bringing people together on a Super Sunday, where everybody felt like they were rowing together for the community,” he said. “People were reaching out to strangers.”

The person expressed some reservations about the new direction. They mentioned the once-annual Israel in the Gardens, “where you would rub shoulders with people,” and “Blue Monday where lots of people met their dates, and husbands and wives, and things like that.

Israel in the Gardens at Yerba Buena Gardens, San Francisco, June 1, 2003. (Photo/Joyce Goldschmid)
Israel in the Gardens at Yerba Buena Gardens, San Francisco, June 1, 2003. (Photo/Joyce Goldschmid)

“Does the Federation have to do all those things? No. But the Federation is the embodiment of the community,” the person said. “If the Federation is only focused on larger philanthropists, how do we connect the next generation and the wider community to a communal purpose?”

Another former board member said they feared the new strategic plan represents a turn away from the Federation’s historic purpose of raising money primarily to support the Bay Area Jewish community.

“From an ethical perspective I think the Federation to a large extent is abandoning its historic mission,” said the person, who also asked not to be named to openly discuss their concerns.

“The organization was created 100 years ago or so. Its mission was to help poor Jews by raising money from the middle class and above. And then it really became what they typically call the ‘central address’ of the Jewish community, acting to some extent as its representative,” the former board member added. “As a point of ingress to the Jewish community. As a place where Jews could connect to other Jews across various forms of affiliation — Conservative, Reform, Orthodox. You might have been politically conservative or liberal. This was a place they could get together.”

Now, the person said, “the focus is on providing a service to help wealthy Jews fund their philanthropic interests, whether they are related to the Jewish community, or to the symphony, to universities, or whatever else.”

While it intends to continue the annual campaign, the Federation is not putting additional resources into community fundraising. Instead it is hiring staff to bolster its advisory capacity, share its expertise and earn revenue through fees for those services.

Slepian described the promise, and some of the challenges, associated with the new strategic plan, including how much influence the organization will be able to wield with its DAF holders and supporting foundations.

“We’re going to engage the community around being philanthropic,” Slepian said. “It’s not just, ‘give us the money, and we’re going to be the wise, paternalistic leaders who will figure it out.’

“We’re not going to create some wholesale shift in how DAF money is allocated. People have their own ideas about how they want to do their philanthropy,” he said. “But I think a lot of DAF holders are really hungry for information and ideas and knowledge about how their money can be best put to use.”

Shifting community needs

The Federation is not prioritizing replacing grants that have been cut, leaders said.

“We are looking at what the Jewish community’s needs are now, and how we can best support them going forward,” Sisisky told J.

“Many of the organizations that Federation stopped supporting were no longer in line with its strategic vision,” said Eileen Ruby, the board chair.

Ruby added that the organization’s new focus on enriching its total assets under management will, ultimately, benefit the Bay Area Jewish community as a whole.

“This is our new direction. And kudos to Joy for seeing it through.”

Other Jewish community leaders expressed unreserved support for the decision.

“I am excited and optimistic about the Federation’s new strategic direction,” said John Pritzker, a past president of the Federation, a billionaire investor and a member of the well-known Pritzker family. “Change is hard, but the time is ripe for the Federation to adapt to the new philanthropic landscape in the San Francisco Bay Area — and indeed across the country.

“I am equally excited about the Federation’s leadership and have faith that the new plan sets the organization on the right course for the future. In support of this vision, our foundation has made a significant gift to help the Federation accelerate its transformation.”

Wertheimer expressed hope about the Federation’s future.

“Jewish life requires a significant infrastructure if it is to flourish and, more importantly, if Jews are going to be inspired to participate in Jewish life,” he said.

“Whereas donors of means can decide they want to have their DAF funds parked at Vanguard, or Fidelity, nobody there is going to say a word to them what Jewish needs are, what the possibilities are, and what they can do with their money to enrich Jewish life,” he added.

“There’s an opportunity here and it should be seized.”

J.’s CEO on our publication’s independence

Jo Ellen Green Kaiser

People often ask me whether J. is an independent news organization. We are. We are a nonprofit that exists to serve the entire community. Unlike some news organizations that have only one deep-pocketed funder, J. receives support from 2,600 donor households and over 300 advertisers.

That said, our local Federation does stand out among our supporters. The Jewish Community Federation and Endowment Fund currently is our largest donor, giving us a grant of $190,000 this year. The Federation is also one of our best advertisers, buying about $45,000 in ads per year. And it provides us a discount on our office space. In sum, Federation funding accounts for about 10% of our annual budget of $2.4 million.

This support does not mean that J. reports on Federation activities from a perspective any different than we would other community organizations. My role as CEO is to ensure that reporters and editors can do their jobs without feeling any undue pressure. You can expect us to continue to provide you with accurate and transparent information about the Federation’s strategic plan as it unfolds. Where the plan is successful, kol hakavod, we will report on those successes. And if the plan presents new challenges to a part of the community, we will report on that, as well.

J.’s main mission is to tell the stories of our Jewish community, connecting all those who care about Jewish life in Northern California. Please let us know how we are doing. You can reach our editorial staff at [email protected] or reach me directly at [email protected].

Gabe Stutman
Gabe Stutman

Gabe Stutman is the news editor of J. Follow him on Twitter @jnewsgabe.