New agency funding procedure marks new era for federation

New agency funding procedure marks new era for federation

United Jewish Communities of MetroWest NJ — headquartered on the Aidekman campus in Whippany — is revamping its allocations process to better communicate its mission to donors.
United Jewish Communities of MetroWest NJ — headquartered on the Aidekman campus in Whippany — is revamping its allocations process to better communicate its mission to donors.

United Jewish Communities of MetroWest NJ is revamping its process of allocating funds to local agencies in a move meant to sharpen its focus on programs serving Jews and to better communicate its mission to current and potential donors.

Starting in October, some 80 percent of the federation’s allocations to five key beneficiaries will be earmarked for specific programs.

It is a notable departure from previous years, when 100 percent of allocations to federation beneficiary agencies were received without instructions as to how the monies must be spent.

“With less to allocate, we needed to think about which programs and services most needed our support, to the extent that their revenues through program fees, grants, and fund-raising do not cover their operations,” explained Diane Klein, UJC’s associate director of planning and allocations.

She outlined the changes in a Sept. 21 phone interview with NJ Jewish News.

Under the new process, 80 percent of the federation’s allocation to Jewish Family Service of MetroWest, for example, will be targeted for counseling for adults and seniors and for the Rachel Coalition, a program designed to help victims of domestic abuse. The remaining 20 percent will be unrestricted.

“I think it will be helpful,” said JFS executive director Reuben Rotman. “Today’s donors want to support specific program areas rather than agencies. On paper, this has the potential to help with UJC fund-raising, which continues to be down. It will help attract new donors who are very program-focused.”

For MetroWest’s Jewish Vocational Service, 80 percent of the allocation from UJC must be spent on career services, the middle-income unemployed, and immigrant services. The 20 percent balance is unrestricted.

The new process will also affect Daughters of Israel nursing home in West Orange, JCC MetroWest, and The Partnership for Jewish Learning and Life.

“The strategy is a good one,” said DOI executive director Susan Grosser. “I think it is good that they are taking a closer look at this. How it will affect our home in the long run remains to be seen.”

Joyce Goldstein of Essex Fells, chair of the federation’s Unified Allocations, has been a part of developing the revised plans since they first came up for discussion two years ago.

“I see the new system as very powerful in a variety of ways,” she said. “It is a way of helping people understand why they give to UJA.”

The designated funding decisions will also underscore UJC MetroWest’s mission to the Jewish community, she said.

“Funding will go specifically for programs that serve the Jewish community,” said Klein. “If the agencies come to us for funding something outside the Jewish community, chances are that with this new model, our funding wouldn’t go there.”

Like many Jewish-sponsored nonprofits, JFS, JVS, the JCC, and Daughters of Israel provide services on a nonsectarian basis.

But, Klein was quick to add, “we don’t expect to filter out people who aren’t Jewish. In allocating this way, we are not saying to the agencies, ‘You shouldn’t serve non-Jews.’ But we are focusing more on programs that serve Jews primarily. Money that comes from the Jewish community is supporting programs important to the Jewish community.”

Klein said the allocations would be determined as part of an “ongoing conversation with the agencies.”

The changes will also see the creation of two new planning and allocations committees: the Center for Jewish Connections and the Center for Jewish Responsibility.

The Center for Jewish Connections, with Mindy Kahn of Randolph as its chair, “will be focused on Jewish identity-building activities,” such as The Partnership, JCC MetroWest, day schools, and outreach programming in Morris County, said Klein.

The Center for Jewish Responsibility will focus on “human service needs within our community,” as it deals with the programs and services of JVS, JFS, Daughters of Israel, and special needs and eldercare services. David Hyman of West Orange chairs the center.

A Center for Agencies, chaired by Caldwell resident Ira Steinberg, will continue to monitor the financial health and governance of the agencies “as a second set of eyes, where conversations about finances will take place,” Klein explained.

‘A reflective manner’

The designated allocations process reflects broader trends in Jewish philanthropy, according to Stephen M. Cohen, professor of Jewish social policy at Hebrew Union College in New York.

“For years, philanthropists have sought to make their contributions more targeted and effective,” he said. “They used to give as an act of affiliating. Now they want to give as an act of expressing how they feel the world could be a better place.”

Cohen said federations and other Jewish institutions “are trying to be adaptive of the ethos of American-Jewish life. They may be guessing right, or they may be guessing wrong. But they are to be commended for acting in a reflective manner.”

For UJC MetroWest, that reflection began in anticipation of a changing philanthropic culture and was accelerated by the harsh economic downturn.

Since 2004, allocations to local beneficiary agencies have been reduced by a cumulative average of 46 percent, except for a 2 percent increase during the 2004-05 fiscal year, according to Klein.

In the current year, the reduction was an average of 8 percent, with some agencies receiving as much as a 19 percent reduction in federation funds.

Klein said the decline in local allocations was caused by “an annual unrestricted UJA campaign that has been virtually flat since 2003 and less reliance upon draws from the Stabilization Fund,” the community’s financial reserve.

Federation officials emphasized, however, that it has worked in partnership with its Jewish Community Foundation and others to expand resource development for its partner agencies. The community-wide Day School Endowment Campaign has allocated hundreds of thousands of dollars for academic excellence and affordability to three area day schools. Some $300,000 in incentive grants have been provided to send new campers to Jewish residential camping.

Last year, $300,000 in supplementary funds were raised to send college students to Israel on Birthright Israel programs, and UJC raised nearly $500,000 in supplementary funds to address the needs of middle-class MetroWest families suffering from the economic fallout.

UJC MetroWest officials emphasized that the designated allocations to agencies are not meant to supplant the agencies’ own internal decision-making.

“No, we are not micromanaging,” said Ruth Steckelman of Short Hills, chair of the federation’s Local Allocations Committee. “We are not telling the agencies how to run things. They are coming to us and telling us what programming they do that focuses on the needs of the community and asking us to help them out.”

The centers’ three chairs have been meeting together all summer, preparing for meetings with their members during the first week in October to discuss allocations.

Goldstein said, “We are very excited by the process. I think the agencies recognize that when people understand where the money is being used, they are better off.”

“The next few years for us will tell how well it works,” said Klein, who has been deeply involved in the fiscal makeover since its conception in 2008. “The initial conversations we’ve had with the agencies and lay people have been promising. The most gratifying thing is that it allows us to partner more with the agencies in discussions about community needs. For me, that is the best part.”

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