Fundraising’s Chilly Air: the View from Jerusalem

In the Jewish world, September marks the practical beginning of a new fundraising cycle. Organizations, and synagogues, gear up for High Holiday appeals, and development departments solidify strategy for their year-end push. And with most functioning on a January-December fiscal year, budget fine-tuning discussions are high on the communal agenda. And the question on everyone’s mind, what does the coming year look like from a fundraising perspective?

One of the benefits of being based in Jerusalem is the diverse range of communal professionals and board members constantly rotating in and out of the city for short visits, allowing us the opportunity for continuing access at the highest levels across the communal world. And, what are we hearing – particularly from the U.S.? A slower than expected economic recovery, continued high unemployment and underemployment, and the remaining uncertainty around a range of fiscal policy issues – including the possibility of changes in the tax laws – that combined do little to suggest that this will be a positive year for fundraising. In fact, most professionals have expressed deep concern about 2012.

With this as background, the release earlier this week of a new study, American Friends: US Philanthropic Support for Israel, gives us solid data to look at in one, important, segment of Jewish world fundraising – giving to Israel.

The study examined the trends of philanthropic support from 2006 to 2009 for 80 US-based non-profit organizations that fundraise in the U.S. to support defined sets of services in Israel. The study is complete with facts and figures, challenges and recommendations. Giving to four key areas are examined: Education, Human Services, Health and Arts and Culture. Take-away’s include:

• Giving declined significantly since the Great Recession began in 2007. Although giving increased 8.26% in 2007, which was also the high point of giving in the US overall, American Friends giving declined by 5.64% and 17.79% in the next two years, respectively. Overall, giving decreased by 16.02% in this period across the 80 organizations we studied, representing a $138 million decline.
• In 2009, American Friends giving significantly lagged behind donations to US causes. This was driven by a significant drop in giving to American Friends organizations for Israeli universities in 2009. Organizations with significant losses over this period include American Friends of Tel Aviv University (65.14% decline) and American Friends of Open University (79.50% decline).
• During this period, giving to American Friends Arts and Culture organizations decreased by 10.16%. 2008 was an exceptional year for organizations in this sector; in every other year, it significantly lagged behind US giving overall.
• Health giving increased by 1.89% in 2007, only to decrease by 18.21% and 8.15%, creating an overall decrease of 23.45% in this period. Hadassah Medical Relief Organization, part of the family of organizations that supports the Hadassah Medical Organization in Israel, experienced significant declines in giving, going from $103.6 million in 2006 to only $67.9 million in 2009, a decrease of 34.41%.

The study was not all depressing news. Among others, the American Society of the University of Haifa, saw an 85.09% increase in this period, and the Institute for the Advancement of Education in Jaffa (aka the Jaffa Institute) saw a 61.85% increase. In the Arts and Culture sphere, the American Friends of the Batsheva Dance Company, saw giving grow by a significant 720% over these four years!

The study focuses primarily on American Friends organizations. Yet, in looking at U.S. Jewish philanthropy, we also need to also take into account giving to the various Jewish federations. For while “aggregate giving to American Friends organizations is about three times larger than giving through the Federation system”, the latter commands the highest profile in most communities. From here, in looking towards 2012, the message being received by the system’s global partners is worrisome – campaign giving for 2012 will be lower overall. And while at least one significant recipient has been told they will receive an increased percentage of monies raised, it will still result overall in less revenue.

As the year-end push begins, where does this leave us? Anxious, for sure. Perhaps also pessimistic. But as Avrum Lapin of EHL Consulting told eJP yesterday, “pessimism creates an imperative for action not surrender. You need to work harder, innovate, focus on making a difference.”

And I would add, we need to understand our donors better, how they identify with us, and why they give.

To receive a copy of the full study, American Friends: US Philanthropic Support for Israel, please contact EHL Consulting at info@ehlconsulting.com.