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Birthright tries to fix its Adelson ‘problem’

By Jacob Berkman

February 18th, 2009

New York (JTA) — Birthright Israel is faced with an interesting fund-raising conundrum: How does an organization known for relying on mega-donors convince grass-roots donors that it now needs their money?

The program sends Jews aged 18 to 26 on free 10-day trips to Israel. It has become widely regarded as the most successful Jewish identity-forming initiative launched in recent decades.

Over its first 10 years, it also has become one of the community’s best-funded initiatives, thanks in large part to a small cadre of wealthy donors.

With backing from Michael Steinhardt and Charles Bronfman, it not only receives seven-figure gifts each year from a dozen or so philanthropists, but is heavily funded by the government of Israel, the Jewish Agency and the Jewish federation system.

Most recently, it has become the philanthropic godchild of Sheldon Adelson, the casino mogul who as recently as a year-and-a-half ago was the third wealthiest U.S. citizen.

Adelson has given and pledged about $100 million to Birthright since late 2006. That ranks with Ronald Stanton’s $100 million gift to Yeshiva University and Bill Davidson’s $75 million gift to Hadassah as the most generous displays of Jewish philanthropy.

But like many organizations, Birthright has found that mega gifts like Adelson’s are a double-edged sword.

While a huge grant may go a long way toward solving financial problems and could help produce gifts from other mega-donors, such a gift can also dissuade less-endowed donors from giving more modest gifts because they believe the organization doesn’t need their money.

More urgency

Birthright has long struggled with trying to figure out how to engage donors who give more modestly.

But now the question has taken on added urgency, as the economy tanks and Birthright, like every other nonprofit, sees its big-money fund-raising pool shrinking. Adelson and other big supporters have made clear that they don’t plan to carry the funding burden indefinitely.

Against this backdrop, leaders of the organization in the past six months have been split on how to deal with their embarrassment of Adelson riches.

One faction wanted to paint Birthright as strong and financially indestructible. This helps explain why the organization emphasized news that Adelson had pledged $20 million to the organization for 2009 and $15 million for 2010.

Ignored in the publicity, however, was that the totals represented a drop in Adelson’s annual support and underscored the need for Birthright to identify new donors in the coming years.

Meanwhile, another Birthright faction wanted to cry poverty. The group downplayed Adelson’s gifts, and some sources associated with Birthright are suggesting there was concern that Adelson, who has lost more money than any other American in the economic crash, might not deliver on the 2009 and 2010 pledges.

Such talk seemed plausible. Adelson lost nearly $25 billion over the past year.

I heard rumors from top lay leaders in October and November, but was told repeatedly and publicly by Birthright’s top professional and by those close to Adelson that he had every intention of paying up.

Still, an “unnamed source” fed a story to the Forward saying that Adelson might not come through.

That was coupled with a public plea from the organization’s top lay leader, Dan Och. He told hundreds of donors gathered at the organization’s annual gala Dec. 11 that Birthright’s numbers might shrink drastically unless they found more money because it was not enough to rely on mega-donors.

Unfortunately, if the leak to the Forward and Och’s speech were meant as a coordinated one-two punch aimed at lining up new sources of support for Birthright, the plan backfired, in part because of unfortunate timing.

Och’s plea came the night that Bernard Madoff’s scheme became public — along with news that a Birthright-like program run by the Lappin Foundation was forced to shut down due to the Ponzi scheme. The confluence of events fueled talk that Birthright might be broke.

Those who planted the initial story with the Forward, or someone else in the Birthright orbit, apparently realized the gaffe and backtracked. The Forward ran another story a month later — this time directly quoting Robert Aronson, Birthright’s new professional head — stating that Adelson was going to fulfill his pledges. (Aronson has not returned calls from JTA.)

Now Birthright seems to have settled on a middle-ground marketing approach to figure out how to benefit from Adelson’s generosity while also reaching out to small donors.

The organization issued a statement recently announcing that Adelson will give Birthright $20 million this year, but will do so only in matching grants. According to the latest news release from Birthright, the organization must raise $10 million on its own, and Adelson will give it two dollars for every dollar it raises up to $20 million.

The new campaign is “intended to broaden and deepen the scope of fundraising nationally,” the release said.

Och and Aronson will lead the drive with support from a “national team of experienced fundraisers.”

Birthright also stated that while the number of young people it sends to Israel may fall in 2009 after a huge spike in 2008, Israel’s 60th anniversary year, it still plans on taking 10,000, about the same as in 2007.

Now that Birthright has settled on a strategy for answering the why-do-you-need-my-money-if-you-have-Adelson question, it can focus on arguably an even bigger challenge:

At a time when the economy is in the gutter, social welfare needs are high and charity dollars everywhere have disappeared, how do you convince American Jews that sending relatively wealthy Jewish kids on free trips to Israel should be a top charitable priority?

This article appeared originally on the JTA blog The Fundermentalist.