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Pressure mounts for Jewish groups to merge
January 28th, 2009
New York (JTA) — Over the past year, the faltering economy and tight fund-raising dollars have forced several Jewish institutions to cede their independence and fold into larger organizations.
Recent months have seen an open push for such institutions to consider how they can work together to streamline an organizational world that apparently has become too robust to fund.
The Coalition for the Advancement of Jewish Education announced two weeks ago that it was canceling its annual conference and seeking to fold its programming into another organization.
“In some ways, the CAJE closure is a big flashing red light of warning to other Jewish not-for-profits who should be looking for combination because if you wait too long, there may be nothing left to combine,” said Jeffrey Solomon, the president of the Andrea and Charles Bronfman Foundation.
The Jewish nonprofit world went through a dramatic change over the past two decades. It moved away from a model funded primarily by a centralized Jewish federation system to more of a free-market system funded increasingly by private philanthropists working on their own accord.
While that system allowed for innovation and growth, it also created layers of fat and overlap. These could have been streamlined along the way, but must be trimmed now, according to Jonathan Sarna.
Sarna is the Joseph H. & Belle R. Braun professor of American Jewish history at Brandeis University and the author of “American Judaism.”
“Hard times will promote consolidation,” Sarna said. “Initially there will be great sorrow at the loss of this organization or that organization, but if we do it right, we will find that we are leaner and meaner.
“We will see significant efficiencies produced by this kind of downsizing. Though no one is unsympathetic to the people losing their jobs who have also done important work, when looked at from the Jewish community as a whole, there is a sense that we expanded a bit too rapidly and far too many organizations came into existence.”
This expansion bubble has started to deflate. Some organizations have cut pre-emptively to make sure that despite fund-raising woes, at least their core mission would be carried out.
Baltimore Hebrew University announced that it would become part of Towson State University. The Philadelphia Jewish Archive Center said it would close and its collection become part of Temple University’s archive.
But the closing of CAJE, Sarna said, is an example of what happens when an organization runs its course and does not adapt quickly enough.
When it began some 35 years ago, CAJE was a platform for young, innovative Jewish educators to share what then were avant-garde ideas about Jewish education that were being given short shrift by the establishment.
As CAJE aged, Sarna said, it went from an innovative to an establishment organization in the world of supplementary Hebrew schools.
Meanwhile, new innovative organizations emerged that included, among others, the Partnership for Jewish Education and RAVSAK: The Jewish Community Day School Network; and the Jewish Educational Services of North America resurged.
“You can keep that going in good economic times,” Sarna said. “But once bad economic times hit, it is clear that we are going to see a consolidation in the world of Jewish education. With JESNA and PEJE so much better funded, it is not surprising that CAJE has to shut its doors.”
The call for mergers has become louder of late. When the Jewish Funders Network met in December to discuss how to deal with fallout from huge losses taken by nonprofits in the Bernard Madoff scandal, it proposed creating a list of organizations open to merger to save community money.
Most Jewish professionals and funders are reluctant to name organizations they think should merge; but the American Jewish Congress is a potential casualty of the crisis, those interviewed told JTA.
The AJCongress lost $21 million of its $24 million endowment in Madoff’s Ponzi scheme. Some observers have long thought that its mission — defending civil rights and advocacy for Jewish social causes — overlaps with other organizations, including the larger and better funded American Jewish Committee.
However, according to Dana Raucher, executive director of the Samuel Bronfman Foundation, the philanthropy of billionaire Edgar Bronfman, mergers are not a cure-all and are difficult to pull off — and can only be successful when the cultures of two organizations align.
“The for-profit experience teaches us that mergers are a mixed bag,” she said. “Seventy percent of for-profit mergers destroy share value. I think the mergers that work best are when one organization is so big it’s a buyout situation. That doesn’t tell you that you shouldn’t merge, but you should walk into it carefully.”