The (ex)federation stakes it future on the new trend in Jewish philanthropy: donor control. Time will tell whether it will work.
The Allied Jewish Federation changed its name two weeks ago to JEWISHcolorado. The change is the result of some three years of “reimagining” the federation.
The far bigger change announced at the final annual meeting of the Allied Jewish Federation of Colorado was twofold: the merger of the federation and of its endowment fund (the Jewish Foundation); and the elimination of the allocation of funds in favor of grants.
These two structural changes represent a gamble on the future. The logic, as we understand it, is this: In all but a few cities in America (Chicago, Cleveland and Baltimore, for example), the federation system is teetering. That is, no longer will Jews commit the preponderance of funds at their disposal to a representative communal body for decisions on who most needs and deserves these funds.
The reason for the collapse of the community enterprise is the rapid and dramatic growth of private Jewish foundations, coextensive with the “greatest transfer of wealth” in history. With a significant minority of American Jews inheriting significant sums, the desire to administer these funds solely according to the wishes of their owners is a hurdle that a community-based enterprise, such as a Jewish federation, will never surmount. So, if you can’t beat ‘em, join ‘em.
The reimagined JEWISHcolorado will now expect to raise much more funds through donor-advised funds than through contributions to a central pot. Consistent with this expectation, JEWISHcolorado will measure its success or failure by the total of the funds it secures for grants as well as donor advised funds. Put in terms of the old entities, the “campaign” will represent the combination of both direct contributions to the federation, as well as bequests and other donor-directed funds to the foundation. Except that now, all funds will come to a single entity, JEWISHcolorado.
To the extent that it will retain the right of autonomous decision to distribute the funds entrusted to it, JEWISHcolorado will distribute via grant application, rather than communally decided allocations to such agencies as day schools, the JCC and the ADL. “Entitlements” will cease.
Here, too, JEWISHcolorado is pragmatic. At the same time as private foundations have come to represent most of the charitable dollars in the Jewish community, the Jewish agencies have, over the past 20 years, dramatically expanded their own fundraising operations. Long forgotten is the “blackout period,” during which every single recipient of federation funding, no matter how large or small the recipient, was bound to close down its own fundraising operation, and instead to encourage its supporters to give to the federation. The old compact said: You raise funds for us, the federation; this will make us successful; and we, in turn, shall finance a hefty part of your operations.
In the early 1980s, as the ambitions of local Jewish agencies grew, and as the Allied Jewish Federation refused to acknowledge that the Israeli economy had drastically improved over its early years, the Jewish philanthropic compact broke down. Allied still shipped the bulk of the funds it raised to an Israel that needed them far less than in earlier decades, while neglecting Denver Jewry. Because Allied did not invest heavily in local Jewish youth, a generation later it became difficult to convince young adults to invest in Allied. More broadly, the breakdown of American Jewry proceeded apace without major funding to help build the institutions necessary to stem the tide of assimilation.
Out of necessity, local Jewish agencies — especially those way underfunded by Allied, namely the day schools — began to reach out to major funders. Seven-figure donations and six-figure loans — very large sums that in the past would have gone to Allied —now came directly to Jewish day schools and to DU (for an endowed chair in Jewish studies), as well as to other agencies. The capacity of Allied to control the community diminished in direct relation to the proportionate reduction of funds it allocated to local community needs.
This reduction spawned tensions between Allied and the community agencies, leading eventually to Total Choice Tzedakah as a way to reduce the tension by increasing funding for local needs.
Such, in broad strokes, is the situation that current Allied leaders inherited, and to which they have now responded. Their strategy — JEWISHcolorado — is a gamble. It may be the wave of the future. It may represent the sober acknowledgement of the changing nature of American Jewish philanthropy, and the wise alignment with the new thrust. It may become a national model. Or maybe not.
Time will tell.
We wish JEWISHcolorado well in its brave new world.
Copyright © 2013 by the Intermountain Jewish News
