For the first time in six years, the Jewish Federation Annual Campaign has declined, with the 2008 drive’s totals down by 3 pecent, and the 2009 effort continuing “to be a challenge,” according to JFed officials.

“Unfortunately, the height of the financial crisis in 2008 hit just before the end of the year, when we typically bring in the largest amount of donations,” said Sanford Neuman, JFed Campaign vice president.

Neuman said the final campaign result for 2008 was $10.7 million, down 3 percent from the $11.03 million raised in 2007. He added that the total from all income streams, which includes, in addition to the annual campaign, endowments, capital and targeted gifts, planned gifts, government funds and grants, was $14.1 million, compared to nearly $26.5 million in 2007. “This is especially tough at a time when our community desperately needs the extra funding,” Neuman said.

Barry Rosenberg, executive vice president of the Jewish Federation, said the downturn in giving was not from a lack of effort or passion by Federation leadership, volunteers and professional staff. “Rather, it’s a result of declining investments, business declines and closures, plus fear and uncertainty,” he said.

Both Rosenberg and Ruth Lederman, Federation associate vice president and director of development, stressed that the dip in the campaign was likely to persist into the 2009 Campaign, noting that the current economic downturn has vastly increased the demand for such services as the Jewish Food Pantry, job searches and family counseling.

“As we begin a new year, we are bracing for a continued slowdown in charitable giving,” Lederman said. “Yet, at the same time, we must continue to meet the most basic needs of our families. We need to maintain our support of Israel in the face of rising threats in the Mideast and continue to support at-risk Jewish communities around the world. It will take each of us contributing — what we can — and collectively we will continue to feed the hungry, give financial support to families on the edge, send our kids and seniors to day care and educate people of all ages.”

Lederman said the 2008 campaign was “very, very strong” for the first three-quarters, with several successful mission trips to Israel and strong relationship-building with donors. “And then, with the hit of the stock market and the decline in the economy that happened in the fourth quarter…the news or the implication of that news affected donors. Either they were financially impacted or they were psychologically impacted,” she said.

“In September our view of the economic world changed,” Rosenberg added. “On one hand, you had very serious and broad financial impact on the population. People truly had significantly less money than they had before in terms of their wealth, portfolio or assets. The enormous cloud of economic uncertainty really scared people. As a result, contributions dropped off.”

Rosenberg noted that the Federation’s investments were not affected by the Bernard Madoff scandal. “The Jewish Federation had no direct or indirect exposure to Madoff,” he said. “Our assets were secure from that perspective. I think there is a question about what role Madoff plays in the psychology of the philanthropic community. Does it contribute to a larger sense of insecurity — a donor saying are my investment assets really secure? That doesn’t help.

“Secondly, it raises legitimate questions about whether all non-profits are managing and protecting their assets,” Rosenberg continued. “We take fiduciary oversight and careful management of assets as an exceedingly high priority and responsibility. One of the strengths of an institution like Federation in terms of its size and the sophistication of its volunteer and professional leadership is that we can provide first-rate oversight and financial management. That doesn’t mean we won’t lose assets in a down market, but we will do a very good job of managing through difficult times.”

Asked what the impact of the Federation Campaign shortfall will have on both the Federation and the agencies which receive Federation funding, Rosenberg said, “The simple fact which everybody will appreciate is that if you have less revenues coming in, you’ll have less revenues to give out.”

Making cutbacks and determining allocations

The Federation has already started trimming its internal operating budget, Rosenberg said, eliminating several positions and freezing salaries for 2009. “We’ve committed to monitor the financial situation very closely, and have identified contingencies if further reductions are warranted…and we will make sure to keep our resources focused on essential and priority needs in our community.”

Rosenberg said JFed is in the process of determining allocations.

“It’s too early to say what the ultimate results will be on individual agencies or the agencies as a whole, but unquestionably we will have reductions in our allocations in 2009 and 2010.”

Lederman noted that with the economic downturn, agencies and organizations depending on JFed allocations are also seeing unprecedented demand for services.

“I think the community has to remember that…there are people in the community…who have been hit hard, and will be even more dependent on our agencies. It increases scholarship needs, whether it be for Jewish camps, Jewish day schools, or for pre-school. The needs for job re-training, and job searches, the need for food and general counseling at the Jewish Family & Children’s Service, and for short-term cash assistance all have gone significantly up,” she said.

“You also have the people we serve in Israel and Jews all over the world. The reduction in our Campaign has forced the Jewish Agency to cut significantly, and the JDC (American Jewish Joint Distribution Committee) has also had to cut significantly. What that means is that the delivery of human services is impacted,” Lederman said.

Rosenberg added, “The world changed, and we’re living in unprecedented times for our generation. One of the best moments, and a strong indicator of the importance of the Federation, was our ability to mobilize immediately a half-million dollars for the Lifeline Fund to address the needs of the very people who have been hurt by the economic situation. We undertook that half a million as a first step. We’re prepared to continue to respond to those needs as they unfold. Those dollars are helping people who have lost jobs or who are unable to make payments get through a little bit better.”

“We’re going to stay very focused,” Rosenberg continued, “on the needs of people who have been hurt, and we’re prepared to raise additional funds for prioritized resources to help them.”

Looking toward the 2009 Campaign, Rosenberg said, “We’re going to continue very multi-faceted fundraising, reaching out to existing as well as to potential new donors and resources. I think what’s different in 2009 is that we have to have new conversations with our donors to help them think through their response to these times,” Rosenberg said.

“We also want them to share the pain that they felt. And so, we will be engaging them in conversations, helping them understand what’s at risk for the Jewish community if we don’t succeed in maintaining a reasonable level in the Annual Campaign. That will take some additional time and effort this year on behalf of our lay leadership and staff, but we think it’s important to work with people in these difficult times to figure out how we collectively serve our community.”