Federations’ mission used to be providing direct funding. Now, Federations are needed to provide operational capacity and expertise.

By Rabbi Jeremy D. Sher

With some of the worries I read in the Jewish press, it seems as if Federations are in danger of becoming a fifth wheel. A century ago, new Jewish immigrants like my great-grandparents needed to band together locally to raise funds for all the Jewish community’s needs. By midcentury, the heyday of civic organizations, service-minded Jews found their social lives revolving around house parties, fundraising galas, grantmaking meetings, and ribbon-cuttings in sparkling new suburbs. Everybody who was anybody gave to the Federation and got involved. Today, that cohesion is talked about most often in the context of lamenting its loss. Much ink has been spilled on what happened. Narrowing private control and expanding alternative ways to give have undoubtedly been factors. My purpose here is neither to lament nor to explain, but to point out a present need for the kind of central hub Federations have always provided, albeit different from Federations’ historic role.

True, new technologies have displaced Federation giving. Online grassroots fundraising is a big culprit – or, depending on your perspective, perhaps a savior from layers of inefficiency. And people today are more individualistic and entrepreneurial, starting new initiatives that could make great contributions but often have trouble getting off the ground. Finally, despite the shrinking dominance of Federations, the Jewish population is burgeoning. (Yes, burgeoning; for all the worries about assimilation, there are some 7 million Jews in the U.S. today, compared with about 5 million in 1950 and 1 million in 1900.) People don’t all know each other in a local Jewish community. Above all, why would people give through Federation when they can give to their favorite organization directly on a website?

But new opportunities have brought with them new needs, which have our smaller Jewish organizations constantly reinventing the wheel, doing a range of activities they’re not good at and are not interested in, just to make it possible to start work on their missions. Uncool, unsexy back-office chores like technology investigation and adoption, database management, website maintenance, graphic design, keeping social media current, developing bylaws, policies, and procedures, maintaining business insurance, accounting, payroll and healthcare, procurement, sending out blast e-mails, even being able to answer incoming phone calls – all these and more have one thing in common: they present enormous fixed costs with low variable costs for smaller organizations. They are major barriers to entry, and few organizations have the know-how to accomplish them well. They lend themselves very directly to centralization for economies of scale.

Federations’ mission used to be providing direct funding. Now, Federations are needed to provide operational capacity and expertise. If 20 organizations each urgently need 0.05 FTE (two hours a week of staff time) to run social media, or to do accounting, or to answer the phone, why not hire one centrally managed professional in each of those areas and use their time to support those 20 organizations? What if, instead of everyone floundering to raise money by e-mail and on social media, one centrally located new-media fundraising consultant worked with Jewish organizations throughout a local area? What if Federations acted as staffing agencies, centralizing health insurance and payroll operations along with their associated fixed costs, and distributing the streamlined costs back to client organizations through predictable fees? If centralized funding gave way to centralized consulting and back-office operations, that would be a pretty good capacity-building service. It just might be a better wheel.

Old-style thinking could easily destroy all the benefits of this idea. There will be enormous pressure to begin denying access to these valuable resources based on ideological, lifestyle, halakhic, or a mushrooming plethora of other litmus tests. We must resist these and all temptations to divide our Jewish community. The whole point of combining resources always has been to do more together with greater efficiency than we could do separately. Federations work best when they provide a collaborative, mutually enabling environment for people who don’t always agree or even like each other, not merely for people who do, especially in today’s polarized world. The more we insist on dividing ourselves into mutually boycotting factions, the more we all reinvent the wheel, the more our duplicative, wasteful fixed costs go up, the more barriers to entry become daunting for small organizations, and the less any of us can do.

Therefore, Federations should above all return to their historic place as the hub of the Jewish community’s wheel. A local Jewish community still needs a hub. The design of that hub needs to change, as society and technology change. Automobile wheel hubs in 2017 don’t look as they did in 1917, and neither should community hubs. But their role is the same. Their role is not to be where the rubber meets the road on any issue, but to be the stable, sturdy center around which all the flashy details revolve.

Rabbi Jeremy D. Sher, M.Div., is rabbi of Ha-Emek: Honest, Inclusive, Progressive Judaism in Silicon Valley, a Jewish Renewal congregation. An experienced business and nonprofit leader, he recently published his first book, Growth through Governance: What Every Jewish Nonprofit Leader Needs to Know. He can be reached at jdsher@gmail.com.