Jewish groups fear drop in donations as markets fall

American Jewish federations comprise largest US charity network after United Way.

By HAVIV RETTIG GUR
stock market down 88 (photo credit: )
stock market down 88
(photo credit: )
The crisis rocking financial markets in the United States and in more recent days markets around the world, has not yet reached the Jewish federation system, according to senior federation officials. The 155 American Jewish federations and several hundred smaller Jewish communities together comprise the largest American charity network after the United Way, raising $2.4 billion in 2007 and holding some $13 b. in endowments. The numbers are large, maintaining one of the most extensive social and welfare service networks in the world. Government funds add some $6 billion annually to the hundreds of soup kitchens, food banks, work programs, community centers, elderly care facilities and other charities operated by the federations. With the financial tumult following bank closures and stock crashes in recent weeks, the federation system has begun to plan how to deal with the possible effects of the crisis. "It's too early to feel it," said Jeff Kaye, director of resource development at the Jewish Agency, one of the federation system's largest recipients. It will take a few weeks for the effects of the market to be felt in a drop of philanthropic dollars, according to several federation officials who spoke with The Jerusalem Post. But when it does, the hit is expected to come from several directions simultaneously, according to William Daroff, vice president for public policy and director of the Washington D.C. office of the UJC, the umbrella organization of Jewish federations in North America. Demand for federation-funded services is expected to rise as more and more people losing jobs and fortunes due to the weak market will need to rely on these services. At the same time, donor dollars will shrink as many can only afford to give less. Finally, and perhaps worst of all, the decline in tax revenues could lead to cuts in the government contributions that make up a large part of the funding for many of these services. For this reason, some federations are already acting to raise extra funds to deal with the expected crisis. The Sunday kickoff of the UJA-Federation of New York's annual campaign raised $43 million, $2 m. more than in 2007, the federation announced. Despite the grim news from Wall Street, all but six of the federation's 125 largest donors either maintained or raised their contributions. "Our largest donors stepped to the plate," said John Ruskay, Executive Vice President and CEO of the UJA-Federation of New York. While the funds raised will allow the Jewish community "to respond to acute need," Ruskay still admitted the community will be hard-pressed to make up funds already missing due to government cuts and the rising cost of food. Similarly, the JUF-Jewish Federation of Metropolitan Chicago has established "a special fund to help members of the community being hurt by this," said Michael Kotzin, executive vice president of the federation. "We're conscious of the fact that this fund will be helping people who have never needed help before." No one - including senior federation officials interviewed for this article - could offer concrete figures for the expected shortfall the federations will face in the wake of the collapse of some of America's largest financial institutions. But all were firmly optimistic that the federation system would weather the storm. "The Jewish community will figure it out," said Daroff of UJC. "We will stretch dollars farther and more effectively, and we will make the case that now more than ever social service agencies are in need of support." The government will play a big role in making up the gap, added Daroff, who also serves as the UJC's welfare lobbyist in Washington. "The government needs to step up to the plate and it will step up to the plate. Part of dealing with economic stress is to put more money into the economy. Deficit spending is pretty universally seen as a necessary ingredient in helping to get an economy back on its feet," he said. Echoing Ruskay, Kotzin and others, Daroff said he was "optimistic [about] our ability to come through and ensure that those who are vulnerable in our society will receive the services that they need."