Friday, January 27, 2006

Should This Marriage Be Saved?

When Leonard Block died in November at 93, the obituaries mentioned his leadership of the large drug company that bears his family name and also his philanthropy, including as a former treasurer of Lincoln Center. Scant mention was made of his Jewish communal involvement, perhaps because it occurred many years ago. I knew him a bit in the 1970's, thanks to my close friend, William T. Golden, then and still at 95 one of America's great public servants. Mr. Block was active in Federation, but that would soon end because he was strongly opposed to its merger with the United Jewish Appeal. He did not want Federation to change its identity.

That merger resulted in the loss of UJA's identity. Whatever its financial consequences - a question that must remain speculative - at a time when droves of American Jews were on a path away from Jewish identity, one of our primary symbols was jettisoned. This was a symbol that had resonated among American Jews, especially in times of crisis for Israel, as in 1967 and 1973. The Federation-UJA marriage was not made in heaven.

It was symptomatic of the federation mentality that had gripped organized American Jewry since the early 1900's, the idea being to bring together Jewish hospitals, charities, child care agencies, senior programs and educational initiatives. This would result in greater coordination and, in turn, there would be fundraising and programmatic benefits. Although New York was among the last to join, the federation movement carried the day. We now have more than one-hundred federations.

For a while, the concept seemed to work, as large donors channeled their gifts via federation, which in turn launched major capital campaigns that benefited constituent agencies. This process continues to work in some communities, mainly those that are medium or small-sized and are experiencing continued Jewish population growth. In older communities, the story is one of a tired marriage, of going through the motions because while it was relatively easy to federate, there is no ready formula for a divorce.

Over the past generation, the federation concept has been undermined, especially in New York. Hospitals had been a cornerstone of the system and also the recipients of the largest allocations, yet the arrangement unraveled as nearly all of the operating income for hospitals now comes from third-party reimbursement, primarily Medicare, Medicaid and private health plans. Other constituent agencies have also found that what federation can offer covers a shrinking share of their budgets.

When our society moved away from the idea and ideal of the melting pot and embraced the notion of ethnic identity, federations responded to the new Jewish activism by channeling a greater share of grants to more parochial Jewish causes. In turn, this move alienated some major givers who, as a consequence of their personal assimilation were moving away from parochialism. At about the same time, the federation world was confronted by a new challenge as a growing cohort of super-rich Jews who remained committed to Jewish identity established private foundations that became the primary conduits for their significant philanthropy. Federations were being hit in both directions and they were being deprived of financial support, as well of people of vision and creativity.

Federations are not in the poorhouse. They sit on billions of dollars in endowment funds and while much of this cache is restricted, the sums will continue to grow from new bequests. Federations obviously cannot do all that they are asked to do or want to do, but financial limitations are not their major limitation. There is a lack of freshness, as bureaucratic imperatives, including rounds of meaningless meetings and conferences, dominate the work of senior staff. What creativity there is finds expression in fundraising and public relations. The federation world is largely anachronistic and imbued with unmerited self-importance. There is no way to favorably compare this world with what is evident in the far more creative world of private Jewish philanthropy.

Are we permanently bound to a tired arrangement that each year produces a hugely expensive yet fundamentally irrelevant extravaganza known as the General Assembly? We probably are wed to the system because the path of least resistance is to maintain this Humpty Dumpty rather than to take it apart. Like conventional marriages that are preserved because the alternative may be worse, we may be stuck with the federation model even though it provides little synergy or energy.

Still, if the powers that be have the capacity to be creative, they might explore alternative approaches, beginning with recreating a centralized and direct fundraising mechanism on behalf of Israel. The aim would not be so much to raise additional funds, although that would be important, as to buttress a connection between American Jewry and Israel along the lines advanced by Birthright Israel. In addition to what Birthright accomplishes among younger Jews, there is evidence that it has an impact on the participants' parents and families.

On the domestic front, since there is no prospect that federations will go out of business, at least not any time soon, the best that it can hope for is that they would be less bureaucratic, less expensive to run, less immersed in meaningless meetings and events and more focused on what can be done to foster meaningful Jewish identity. Federations should downsize. They should have smaller staffs and far less overhead. They should concentrate their resources on institutions and activities - education and outreach are foremost - that cannot count on public funding.

Inertia is a presence in all organizations, yet change is inevitable. Nearly all of the Jewish leaders whom I have spoken to over the last generation know that the federation system is in deep trouble. Instead of challenging what is wrong from the inside, they have calculated that they can make a greater contribution from the outside. This is understandable. It is also unfortunate.