2011 was mixed year for Federation fundraising

By David Baugher, Special to the Jewish Light

The numbers are a study in contrasts this year for the Jewish Federation of Greater St. Louis as the agency continues to pick its way through a turbulent economy and a rocky philanthropic environment.

According to figures released Tuesday, the Jewish Federation’s Annual Campaign endured yet another bruising year plunging to $9.4 million, a 5.5 percent drop from 2010’s figures, which were already the lowest seen in more than a decade.

At the same time, the Jewish community umbrella organization’s overall fundraising picture, which includes longer-term commitments, was significantly healthier. Buoyed by strength from other revenue streams it reached about $25 million, a 47 percent increase over last year.

“It’s great news long-term,” said Bob Millstone, chair of the agency. “It’s a little more of a challenge in the short-term but I would say we are responding to those challenges in the best way possible by making the strategic changes we are making.”

The campaign

Largely successful in the middle of the last decade, the campaign has fallen on hard days of late. This was the fourth straight decline for the troubled fundraising drive, which shed another half million dollars off last year’s totals. The annual effort has retreated nearly 15 percent since its high-water mark in 2007 when it cracked the $11 million plateau, an achievement that capped five successive years of increase.

Federation officials say the decrease this year was due largely to two factors. One was the disappearance of a few major givers at the top end.

“Six gifts made up a significant amount of the losses from donors who have died or moved out of town and from a corporate sponsor who is no longer giving,” said Ruth Lederman, vice president/director of development.

Barry Rosenberg, President and CEO, said three of them alone accounted for a decline of a quarter million dollars.

The other half of the problem related to the erasure of effects created by one-time programs staged in recent years to keep cash flowing in. In 2010, initiatives like the Visionaries effort and a major dollar-for-dollar challenge grant sponsored by 21 families raked in hundreds of thousands of dollars helping to cushion a campaign sagging under the weight of a stagnant economy.

“Those programs brought a lot of money into those years’ campaigns but those are dollars that are not replicable,” said Rosenberg. “When you back out the one-time money, we began 2011 with an inventory of contributions of $9.4 million and that’s where we ended.”

Lederman said similar efforts were discussed this year but were decided against though four smaller challenge grants were issued and were successful.

“The leadership really felt at this time we needed to get ahead of the curve and hopefully make 2012 a success and not expend so much energy and effort trying to do a one-time thing, so one-time gifts were significantly lower than in the past,” Lederman said.

Despite the drop, Lederman noted there were about half a million dollars in increased donations, mostly among mid-to-high level donors but it simply wasn’t enough to negate the losses at the top. She said major donors, those giving five figures or more, typically make up about 60 percent of the campaign total though she hasn’t worked out those figures yet for this year.

Lederman said about 5,600 donors contributed to the 2011 campaign, about 700 less than last year’s effort. Most of that drop came from the low end, she said, so the impact on the bottom line wasn’t excessive but she adds the issue goes beyond the figures. She said it’s important for everyone to have a stake in the campaign from big donors to small.

“The dollars are not large in those areas but it’s significant because the campaign is about building community,” she said. “The key that I would emphasize is that while we fundraise, we’re not about fundraising. We fundraise because there are needs in the community and the fundraising is a mechanism to meet those needs and deliver services.”

Rosenberg said those services could see effects.

“We will have fewer dollars to allocate in 2012 than we did last year, a result of many factors, one of which is the decline in the annual campaign,” he said.

The big picture

Despite the campaign’s woes, other revenue streams were presenting a far rosier picture. They pushed the organization to the $25 million mark in total development for the year, a significant increase over the approximately $17 million from 2010.

Rosenberg said those figures were a very positive sign, particularly in a bad economy.

“We’ve had some years that are better but this is a very good year overall,” he said.

Much of that cash is in the form of longer-term commitments from donors, often bequests and similar gifts that help build endowments. That’s been the rationale behind Create a Jewish Legacy (CJL), a recent Federation partnership with 18 agencies and congregations to help them attract more dollars. So far, the effort has collected nearly $14 million in 2011 rising from just over 20 gifts in its pilot year to nearly 200 this time around.

Unlike campaign cash, which can be injected directly into the allocations process, monies collected through CJL are mostly commitments of future dollars and may not solve immediate fiscal challenges.

Still, Lederman said they are important for the community to focus on decades in advance and can help sustain it during lean campaign seasons such as this one.

“Had the community been this focused on that 20 years ago, we would have been in a better place,” she said.

Bequests can also be an easier conversation to have during hard times than simply asking for cash now.

“Given the economy, people are more willing to talk about longer-term types of planning versus – with the stock market in 2011 going up and down – it made it hard for people to think about it,” Lederman said. “They’re insecure and don’t know from one day to the next what’s going to happen.”

Meanwhile, Rosenberg praised professional staff and volunteer leadership at the Federation for special fundraising efforts that have blunted the aftershocks of the economic crisis. He said things could have been much worse.

“I think we’re still in a position where, because people have lost jobs or had reduced incomes, they feel more uncertain and it’s harder… to raise funds these days,” he said.

Rosenberg said the agency continues to look for innovative ways to attract donors including partnerships, such as a recent initiative with Randy and Nancy Green. Federation contributions from members of Congregation Shaare Emeth who hadn’t given the previous year were matched with a donation to the temple.

“We’re looking at those kinds of projects that will bring people back onboard and we’re going to keep working on it,” he said.

Millstone said he thinks the dichotomic nature of this year’s figures indicate a challenging environment but one that leaves him optimistic. He said many around the nation have been impacted even more sharply than St. Louis.

“That’s why we’ve changed our development model and our planning and allocation model and we’re making the strategic changes we’re making to Federation because we’re trying to respond to donor needs,” he said.