Local Jews hike donations but seek more control

Bay Area Jews want more control over how their donations are being used in Israel.

Many donors, therefore, are giving more than ever to Jewish charities that allow them to direct exactly how their money is spent.

While federation campaigns in the Bay Area have experienced modest increases over last year's earnings, local fund-raisers for Israeli universities and grassroots causes have made very significant gains.

The reordering is part of a national trend that pits the old communal stalwart against highly focused fund-raising groups that can promise donors the control they are seeking.

As a result, local federations are receiving proportionally less of the market share than in years past, according to reports by the other fund-raising organizations.

"Donors are becoming much more sophisticated in their giving. They are asking more questions" about where their money is going, said Diane Portnoff, director of the San Francisco office of the American Committee for the Weizmann Institute for Science.

"We are well past my grandfather's generation when someone would say that money was needed and he gave. No questions were asked," she added.

While local federation officials acknowledge that campaigns are down elsewhere in the country, none is worried that the national trend will eventually seduce its own loyal donors.

Wayne Feinstein, vice president of the S.F.-based Jewish Community Federation, said he even feels encouraged by the community's willingness to spread the wealth.

"I don't think that a dollar [given to another fund-raiser] was lost to the federation," he said, calling the trend "a rising tide that raises all the boats."

Certainly, none of the area federations — the JCF, Jewish Federation of the Greater East Bay and Jewish Federation of Greater San Jose — feels the pressure yet. All three have experienced annual increases in campaign contributions in recent years. And the S.F.-based JCF in one year generates millions more than all the other local fund-raisers for Israel combined.

Those fund-raisers are quick to say they aren't competing with the federations. But they are taking significant donor dollars the federations may otherwise have collected.

Many of the donors have grown disenchanted with political and religious affairs in Israel yet still want to help the Jewish state. They are now giving directly to specific Israeli hospitals, universities, business startups and grassroots social projects, according to San Francisco demographer Gary Tobin.

In a recent edition of the Wall Street Journal, Tobin cited a 50 percent increase in revenues — from $1.5 billion to $2 billion — over five years for such fund-raising groups. During the same period, UJA/Federations of North America, the primary American fund-raising arm for Israel, saw its annual U.S. contributions decline by some $5 million.

Numerous nonprofits are attracting local donors. Among them are American Friends of the Hebrew University of Jerusalem; American Committee for the Weizmann Institute for Science; New Israel Fund; American Associates, Ben-Gurion University of the Negev; and American Society for Technion-Israel Institute of Technology. All five have offices in San Francisco.

Weizmann's Portnoff said her organization more than doubled local donations during fiscal 1998 over the previous year. It brought in $3.8 million in fiscal 1998, up from $1.6 million in fiscal 1997.

"People like to invest themselves in what they are supporting," she said. Some donors explicitly told her they wanted to avoid giving to the Israeli government and to fervently religious institutions.

"The changing face of philanthropy and the political and religious issues of the federation world are interlinked and can't be separated," Portnoff said. But, "they are combined to make my job wonderful."

Many philanthropists, she explained, "have a vision of how their money will make a difference."

Through organizations like Weizmann, donors can have control by directing the gift to a specific area of research, a campus project or to a certain scientist.

"They can't do that through communal channels because [contributions] are pooled" and allocated to the UJA by the federation, she said.

Donations to Hebrew University also are up, reports Daphna Noily, regional director of the American Friends of the Hebrew University.

Locally, the university's fund-raising arm brought in $2.83 million in pledges and $2.5 million in cash during fiscal 1998, up from $2.4 million in pledges and $2.5 million in cash the year before.

Noily contends that her newest donors are attracted by the prospects of targeted giving as well as an immediate tax break. American Friends places the contribution in a "donor-advised philanthropic fund," to be used in the future at the donor's discretion.

"The minute they put into the donor-advised fund, they get the tax credit," Noily said, and "there isn't a sense that the money goes into a great black hole."

American Associates, Ben-Gurion University of the Negev locally raised $1.8 million in cash and currently payable pledges in fiscal 1998, up from $1 million during fiscal 1997 and just $425,000 in fiscal 1995.

American Society for Technion-Israel Institute of Technology locally raised $4.3 million of cash and pledges in fiscal 1998, up from $2.9 million in fiscal 1996.

New Israel Fund had not yet released its 1998 income. But in fiscal 1997, it brought in $1.1 million locally, up from $642,700 in fiscal 1995.

Administrators of area federations are aware of donors' shifting attitudes. Three years ago, the S.F.-based JCF took heed, surveyed its membership and reviewed its giving priorities.

Since then, the JCF tailored its program to members' directives. As a result, fewer donor funds are funneled to UJA, which doesn't give donors a say in how the money is used. The JCF allocated to UJA $5 million from its 1998-99 campaign, down $1 million from the previous year .

The diverted funding now supports causes in Israel that resonate with local Jews, such as pluralism and Arab-Jewish relations projects, said the JCF's Feinstein.

"This is what federation is about — not some myth or an old thought that has no bearing on what we are today," he said.

At the East Bay federation, Ami Nahshon, executive vice president, said he also has adjusted to the trend of target giving. His organization provides 8 percent less money to UJA than it did two years ago, contributing $600,000 from the 1997-98 campaign. To compensate, the East Bay federation now directly funds specific causes in Israel in addition to its UJA contribution.

Nahshon said he is not as concerned about donors wanting more control as he is about younger generations' tendency to not give at all. When they do give, he said, their contributions are sporadic and the favored cause may vary from year to year.

"It's hard [for the federation] to sustain a network of services that way," he noted.

Jon Friedenberg, director of the San Jose federation, said communication with his membership usually dispels any misunderstanding that would discourage donors from giving.

While he acknowledged rising discomfort over sending money to Israel, he said that "most have not translated their unhappiness to their unwillingness to support federation and UJA."

None of the federation leaders, nor demographer Tobin, thinks that the increased giving elsewhere spells future extinction for the federation-UJA system.

Tobin recalled hearing such doomsday forecasts as early as the 1970s.

"I think people are misreading the tea leaves here," he said.

He cited the combined federations' top 10 standing in the philanthropic world as affirmation of the organizations' resilience.

"There's no question that [the federation] needs to make some serious adjustments." But, "if 20 years ago anybody had predicted that federations [today] would be the agents of billions in unrestricted funds," he said, "nobody would have predicted that."

Lori Eppstein

Lori Eppstein is a former staff writer.