Shifting Paradigms at Federations

Among the various Jewish institutions buffeted by change, Federations may face the greatest challenges. Their value proposition is losing traction as cultural values shift, while their style of governance and management are ill-suited to reacting swiftly to change. As a result they may become victims of their own success.

Federations have traditionally dominated the Jewish terrain in their communities through their size, power, and influence. They were created in response to the huge influx of Jewish immigrants that began in the 1880s, whose needs overwhelmed the small Jewish service organizations already in existence. These new umbrella organizations could coordinate available resources more effectively, and could raise money more efficiently too.

Then the flow of immigrants was drastically curtailed by the Immigration Acts of 1921 and 1924. Federations began to turn their attention to aiding Jews in Europe, fighting anti-Semitism, and supporting the Jews in Palestine, while continuing to provide for the basic needs of Jews in their home communities. In time their portfolios expanded to include non-Jewish causes as well, at home and abroad. Federations became trusted intermediaries for Jewish donors, vetting potential grantees and responding both to emergencies and ongoing needs.

In recent years, many of the things that made Federations so successful have become unimportant or even liabilities. It used to be impractical for individual donors to do their own research into charities. Now anyone can do it quickly and easily online. There’s no need to rely on a Federation to collect and disburse relief funds when disaster strikes; you can text a donation from your cellphone.

On a more fundamental level, underlying values have changed dramatically. Younger people are less interested in supporting someone else’s idea of the greater good and more interested in making their own decisions. They are less likely to make long-term commitments to a general cause than to take a series of individual actions that express their beliefs and interests. The result is that the basic rationale of federated giving holds little value for them.

Federations do have a number of important institutional strengths. Their relationships span the entire Jewish community, and beyond. They have special competence in research. They often enjoy unmatched access to many of the wealthiest Jews in their areas. And they can serve as a neutral meeting place for diverse interests. Using these strengths, Federations could conceive and execute innovative new programs and raise the money to support them.

To their disadvantage, however, Federations are typically committed more to process than to outcome. Their traditional business model has relied more on building confidence in the institution’s impartiality and integrity than on making imaginative decisions, and that has become a liability as innovation has become essential. Another handicap is that bureaucratic organizations like Federations tend to favor consensus – the predictable, the middle-of-the-road, the gradual – while success now depends on novel, timely responses to change. Last but not least, Federation governance is complicated by the ill-defined but persistent influence of lay leaders, whose prerogatives can seriously distort the decision-making process.

The overall challenge for Federation leadership is to maintain the trust and confidence of older generations while responding to the profound shifts in the values and behavior of the younger generations. Revolutionary change would alienate the current donor base, and purely incremental change will leave younger Jews disenchanted. Steering the right course between the two would be hard for any big organization. With so many hands on the tiller at Federations – major donors, professional staff, board members – success there may prove even more elusive.

Bob Goldfarb, a long-time consultant and a Harvard MBA, is president of the Center for Jewish Culture and Creativity in Los Angeles and Jerusalem. He writes regularly for eJewishPhilanthropy.

Be sure to also read Bob’s posts Shifting Paradigms and Shifting Paradigms in Synagogues.