New Projects and New Insights

It has now been more than three years since I left the Jewish Federations of North America after many years as Associate Vice President for Planned Giving and Endowments, and a year since I completed an assignment at CJA Montreal as Senior Advisor to its very successful Centennial Campaign.  Since then, I have been acting as consultant to the Jewish Community Foundation of Greater MetroWest and the Foundation for Jewish Philanthropies in Buffalo. 

All of these assignments have been challenging, rewarding, and educational.  They’ve given me the opportunity to work with old friends and new, and watch highly disciplined and remarkably focused thinking and achievement at work. 

I’ve reinforced some long-held beliefs and learned some new things, particularly as they relate to endowment and foundation growth in our Federation and JCF systems.  My learning reinforces the ideas we encouraged as best practices in so many seminars and training sessions sponsored by JFNA’s Financial Resource Development department.

Here are some of the insights I’ve acquired:

  • Integrated resource development of all revenue streams is not only a good idea that will only grow the    bottom line, it’s one that has been adopted successfully by sophisticated and advanced charities.  This        approach encourages enhanced collaboration between annual, special and capital campaigns with      endowment or foundation activity, to the benefit of all.
  • Changes in tax policy are not likely to constrain the growth of endowment programs and community foundations over the next 10 years.  “It’s like the sun and the stars.” Supporting evidence can be found in any number of places, including Giving USA’s annual survey, which can be purchased online. 
  • Donors will readily accept the idea that Jewish Federations have more than one trick up their sleeves. Their association with other institutions—colleges, universities, hospitals, museums, etc.—have prepared them to see Federations in an evolved new light.  Very few will be surprised when senior staff or key leadership ask them to take part in unique campaigns that stretch the institution beyond the annual campaign.
  • My informal analysis of the Centennial campaigns of at least half a dozen federated communities in the U.S. and Canada—including the remarkable Chicago project—supports the above conclusions.  Centennial campaigns enable Federations to talk to donors in a wholly different way about the community’s needs. These communities also found that overall giving increased during the Centennial campaign period. And guess what? You don’t need to be celebrating a centennial to apply these strategies to your financial resource development.
  • In 35 communities in which a Federation and a Jewish Community Foundation coexist in support of each other, excellent collaboration around not only grant distribution, but fund development occurs as we speak.  Their relationship benefits the community.

In a 50-year period, the Federation system has accumulated over $21 billion in current or future commitments.  One of the questions that I—and others as well—have been pondering is this:  Where will the next $10 billion of assets in the Federation system come from, and how long will it take to raise it? 

The collaboration of JFNA and the Harold Grinspoon Foundation around legacy development continues to be at least part of the answer, but none of us can ignore the implications of the new tax act and investment policy on the growth of the entire endowment and foundation asset base.  

I’d be happy to talk with you about how I can help your community understand and benefit from these insights. Along with my own expertise, I have organized a unique advisory committee composed of highly experienced professionals who can assist you on a wide variety of endowment legal, development, governance and financial topics.

On a personal note, I am considering expanding my practice to include executive searches for endowment personnel.  Our field is unique, technical in nature, and requires specialized skills.  If I can be of help to your community or organization in this regard, please write or call. 

Joseph C. Imberman LLC, “The Endowment and Foundation Consulting Group”


Donor Advised Funds: A Good Time to Revisit an Old Friend

By Avrum Lapin

The passage of the new tax law has many nonprofits concerned about its impact on their bottom line. Donors who previously itemized deductions may see that it is no longer beneficial to do so and may limit their contributions. According to a study from Indiana University, $13 billion a year will potentially be lost by nonprofits nationally and over 230,000 jobs could be lost due to the changes in the tax rules.

The “dust has yet to settle” on the bearing this new law will have not only on the philanthropic marketplace, if any. So, in general … stay tuned.

One increasingly popular philanthropic instrument that remains untouched by the new law are Donor Advised Funds (DAF), along with the rules and regulations that monitor them. These funds have long been emerging as a preferred vehicle for many, largely – though not exclusively – high net worth individuals, supporting nonprofit causes. The fact that the tax law left them untouched means that now is a perfect time to refocus on and revisit these increasingly important modes of giving, and sources of funding for nonprofits.

The Lapin Group spoke with Rachel Gross, Esq., Director of Planned Giving and Endowments at The Jewish Federation of Greater Philadelphia, to learn more about this trend. She has personally seen the use of Donor Advised Funds increase as vehicles for making charitable donations. From the donor’s perspective, DAFs are a way to structure giving and to make organizing taxes easier. For instance, there is one receipt for a charitable gift, issued on the day of the donation to the DAF, not the day in which the DAF sends funds to a nonprofit. This makes the process much simpler to track and review. According to Gross, using DAFs will increase in popularity in the coming years.

What is a DAF?

Donor Advised Funds are classified as any separately identified fund that is managed by a qualified nonprofit (501c3) organization. Once the donor makes the contribution setting up the DAF, the organization assumes legal control over the funds. The donor, however, retains advisory privileges as to where the funds will be allocated. The benefit of a DAF to donors is the immediate realization of the donation and the combined ability to control where and when the allocation is made. Since the overhead is absorbed by the sponsoring organization, there are much lower costs than forming a family foundation.

Are the Use of DAFs Growing?

According to a recent survey conducted by the National Philanthropic Trust, DAFs are quite attractive to donors and have continued to grow, representing an increasingly large part of the philanthropic landscape. According to NPT, “In 2016, there were approximately 285,000 individual donor-advised funds across the country. Donors contributed $23 billion to these donor-advised funds and used them to recommend almost $16 billion in grants to qualified charities. Both grants and contributions are at record highs. Charitable assets in donor-advised funds totaled $85 billion, an increase of 9.7 percent over the prior year. This growth reflects increased contributions to donor-advised fund (up by 7.6 percent) and investment gains.” Indeed, DAFs are a growing force, and their proliferation demands continued attention from nonprofits.

How do DAFs differ from Foundations?

  • A Donor Advised Fund is easier to set up and requires less overhead than a foundation. Donors can set up a DAF was as little as $5,000, though most are reflective of a desire to better manage increasing philanthropic capacity. The administrative costs for set up as well as ongoing fees are less with a DAF than a foundation.
  • Using a DAF does not require the donor to be transparent or open to public accountabilityeven though they are availing themselves of legal frameworks. They are the only charitable-giving vehicle that allows donors to make grants 100% anonymously. When an organization such as a Community Foundation makes a donation on behalf of their client, the charity is legally distributing its own assets, which means donors’ identities are often hidden. The reporting process does not require that the donor’s name be identified, making solicitation and recognition more difficult, among other challenges for nonprofits.
  • DAFs are growing in number. Due to their accessibility of DAFs, the sheer number of them (284,956 in 2016) has eclipsed the number of registered foundations (83,276 in 2016). In addition, DAFs are becoming the platform for more annual gifts. According to Fidelity Charitable, over the last 10 years, the average number of grants per Giving Account has grown from 6.2 to 9.3 annually, while the average grant amount has remained at about $4,200.
  • Donor Advised Fund donations tend to be smaller in scope. Private foundations control substantially more money. There are nearly $85 billion in donor-advised funds and an estimated $750 billion in private foundations. Foundations granted $45.15 billion in 2016, compared to DAFs’ $15.75 billion. DAFs are not required by law to pay out a percentage each year while foundations are required to give away 5% of their assets annually.

Some thought leaders in the philanthropic marketplace are wary of the growth of this new trend. Indeed, we at The Lapin Group have advised how to build relationships with the gatekeepers at community organizations to help channel funds. Some nonprofits worry that DAFs will make the philanthropic landscape harder to navigate, and harder to connect personally with individual donors.

How is it Best to Approach a Donor Advised Fund?

According to Gross, from a nonprofit’s perspective, the best way to approach a DAF fund holder is remarkably not different or new. Here are some points to keep in mind:

  • DAF donors are Individual Donors. It is the responsibility of the organization to steward and cultivate donors, regardless of their vehicle for giving. Though the DAF can be anonymous, Gross explains that most of her donors still tend not to be. Though this is not true for every donor, many want to have a relationship with the organizations that they support.
  • DAF donors encompass a broad spectrum of demographics. Since the threshold for starting a DAF is relativity low and the process is easy, these charitable vehicles are attractive to many donors, across age, gender and ethnicity. The profile of the average DAF mirrors general giving trends.
  • Community Foundations and other gatekeepers do not make the decision of which charities to fund. Fidelity Charitable found that donors are consistent in their support, in 2016; three-quarters of donor-recommended grants went to charities that donors had previously supported.
  • Connecting with the fund management is never a bad idea. While most donors who have DAFs are clear about which organizations they want to support, there are some times where a DAF manager, based at the nonprofit, will make recommendations. In this case, knowing a nonprofit’s mission and impact will help a DAF manager to steer a donor to a cause that matches their interests.
  • A key difference between an individual with a DAF versus using just a checkbook, is that the amount of money in the fund fluctuates with the stock market. A donor may have written a check to a DAF in January and by the summer, the funds may have grown. This means that there is more to donate. Often donors do not check their balances before making donations. Nonprofits can use this to their advantage and perhaps ask for a larger gift, or an additional gift, when the stock market rises, like it has recently. (It can also contract.)

As with any emerging trend, it is important for nonprofits to have a strategy to capitalize on and embrace this growing segment of the philanthropic marketplace. The reason motivating donors to give largely remains unchanged. They want to see impact on the community that the nonprofit serves and to feel connected to the mission of the organization. The difference is that nonprofits can now connect with community foundations and other DAF managers to spread their message perhaps to a wider audience. Due to the volatile nature of the tax laws, nonprofits that remain focused on their value proposition and forge deep relationships with their supporters will fare best.

My colleagues and I are interested in your experiences. Let us know what you are thinking.

Avrum Lapin is President at The Lapin Group, LLC, based in Jenkintown, Pennsylvania, a full-service fundraising and management consulting firm for nonprofits. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading-edge approaches and strategies. A Board member of the Giving Institute and a member of the Editorial Review Board of Giving USA, Avrum is a frequent contributor to and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.

Basic Terminology

Here are some basic terms in the world of philanthropy that are useful to know:

Basic Terminology:

  1. Endowment   /inˈdoumənt,enˈdoumənt/

    1. the action of endowing something or someone. 
    2. an income or form of property given or bequeathed to someone. 
    3. a quality or ability possessed or inherited by someone.
  2. Legacy/Quest  /ˈleɡəsē/

    1. the amount of money or property left to someone in a will.
  3. Charitable gift giving
    1. a gift made by an individual or organization to a nonprofit organization, charity or private foundation. Charitable donations are commonly in the form of cash, but can also take the form of real estate, motor vehicles, appreciated securities, clothing and other assets or services.
  4. Charitable remainder trust
    1. a tax-exempt irrevocable trust designed to reduce the taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and the donating the remainder of the trust to the designated charity.
  5. Charitable gift life insurance
    1.  a method of contributing to charity by taking out life insurance on yourself with the charity as a beneficiary.  Using charitable gift life insurance may allow donors to amplify their giving power.  Rather than giving large cash gifts as part of a will, some donors find it easier to simply pay the life insurance premiums.

Visionary Ways to Reap the Benefits of Community Based Philanthropy

2000 of our closest friends were recently in attendance for the General Assembly of the Jewish Federations of North America (GA). The GA gives all participants the opportunity to network furiously with each other and at the same time take part in some wonderful programming about Jewish communal life. For those of us past or current professionals, there are during GA sessions after hours investment receptions by entities such as the State of Israel at which one can learn and after the GA continuing education which takes place largely by discipline. These sessions in particular make us think hard about life’s big questions. The big questions made us think about several points regarding donor advised funds (DAFs) and how integrated financial resource development is practiced at federations and maybe other charities.

As the first draft of this article was being written, on the last day of 2016, donors all across the U.S. with substantial portfolios and interest in charity were being advised by counsel to make very large gifts to charity in 2016 rather than 2017 because of potential changes to the law which might make giving less financially attractive going forward. One of us spoke with a mid sized foundation executive who was in the final stages of securing approval to accept 15 million dollars of real estate gifts on December 31. Unlike Canada where such changes seem to occur the day after a new administration takes office, in the U.S. any major change to the tax treatment of charities requires major debate in significant committees of Congress and the involvement of large federal bureaucracies like the U.S. Treasury and a long gestation period.

At one of the endowment presentations at the GA, Charlie Glassenberg, Vice President of Gift planning and Investment partnerships at Combined Jewish Philanthropies in Boston took exception to this approach. He asserted that contributions to DAFs should not be solicited based on possible tax advantages. He explained that in Boston, donor advised funds are seen as a mechanism for building trusting relationships with philanthropists and helping donors make grants which have more impact. This is an end in and of itself. The community’s management does not measure the success of the DAF program based on how much is granted from all donor advised funds to the annual campaign. Rather, he shared some wonderful stories about how this approach has led to some very large gifts, both during lifetime and at the death of donors for community priorities.

At least 100 years after Jewish charities began acquiring substantial sums of “special” assets not directly related to their annual operating budgets (or campaigns) the leadership of these same institutions still debate how much to invest in the management and development of special assets such as donor advised funds or “private foundation substitutes” which are not true endowments but which assist charities to carry on their functions and allow donors to:

  1. separate the decision about what to give to charity and when with the decision on which public charity will ultimately get how much and at what point;
  2. retain the ability to recommend grants to qualified public charities over time;
  3. receive personal recognition by both small and large institutions for their giving;
  4. contribute assets other than cash or publicly traded securities to a fund whose administrative cost is generally as low if not lower than that of for profit financial institutions;
  5. secure the best expertise in the community on a pro bono basis as to how the money should be used to secure maximum leverage and influence;
  6. create truly special charitable entities which mirror the activities of private foundations with less cost, at least as much family involvement, and remarkable community investment expertise.

We agree with Glassenberg that the business of managing donor advised funds and even supporting foundations (participatory philanthropy) can be a very valuable one for large charities. But many charities offer these vehicles without properly assessing the costs and benefits. Many smaller charities, without sufficient resources to cultivate these donors, as Glassenberg does in Boston, are overwhelmed by the administrative requirements in running a DAF program. DAFs are viewed solely as charitable cash management tools for donors in these communities. One can question whether these same communities would be better off closing their DAF programs and focusing their scarce resources on building their permanent endowment funds.

The real issue for Federations which offer DAFs is determining what the objectives of the program might be, such as building meaningful relationships with the top philanthropists in a community or increasing funding for community priorities and at the same time honestly answering the question whether the costs to manage the program properly are worth the effort. We believe that in most of the larger communities and more developed Jewish community foundations, DAFs are a fantastic vehicle, but only if properly staffed and managed. We do question whether or not some of the smaller Federations should be deploying their scarce resources to offer DAFs when they are not likely to reap sufficient benefits. There are too many options for donors to create these funds outside of Federations and community foundations. And smaller communities should be focusing their efforts on building their financial foundation through legacies.

In an earlier piece we asserted that charities like federations which manage many fund development activities essentially have three or even four separate businesses… annual campaign, permanent endowment development, participatory philanthropy and everything else (special campaigns, capital campaigns, etc.) Clearly the most urgent current needs met through the annual campaign and special campaigns should continue to be the highest priority. But it is short sighted to not adequately fund the permanent endowment efforts, though the benefits will only be reaped years if not decades after the investment is made. And if a Federation decides to continue to offer services in the participatory philanthropy realm, it must devote sufficient resources to reap the benefits that are available.

In addition, bringing data to the conversation which documents the fact that all of the businesses benefit the bottom line is sometimes difficult, particularly in research resistant environments (for profit banks and trust companies as well as larger single focus organizations like the Common Fund are much better at research on certain financial resource development topics than operating charities). Simply put why spend thousands of dollars on the three or four separate businesses if there is less benefit to the bottom line today?

Part II

This leads us to the point about integrated financial resource development. Those who miss the opportunity to integrate their fund development operations and train up staff members whose skills could be used more effectively are suffering. The second business line or permanent unrestricted and restricted giving as differentiated from donor advised fund management (and foundations) unfortunately has a long lead time, a fact which decreases the eventual value of a gift for accounting purposes when looked at today. But no one can dispute the long term value of a federation or community foundation (or other charity) mounting efforts which accumulate up to hundreds of millions of dollars in the pipeline (whether as a service to the donor or the community).

Our university colleagues learned these lessons many years ago and have reaped the rewards. And the benefits accrue … UJA/NY funds fully one third of its operating budget from endowment income. Others fund up to 25% of their grant making budgets from endowment. Our basic point is still relatively simple in concept but complex in execution. Messaging, solicitation and branding for all streams of resource development should be balanced, clear and nuanced to show that the institution prizes all revenue streams. All of those hired to manage the process over time should come to understand in greater detail the entire set of ways to give, rather than treating one as inherently more important than the other because it produces a gift today as opposed to tomorrow. And training those in this business to be able to interact with families of wealth at a sophisticated level across the spectrum of issues including but not limited to multi-generational philanthropy, family succession planning, investment of assets as well as grant making, administration and charitable aspects of estate planning will produce a fully knowledgeable and competent team, a team much more capable of interacting around complex philanthropic issues and acting as advisors and confidantes as well as annual solicitors. Yes this is a complex task and probably not possible in all settings and with all staffs for a variety of reasons – time, skill level, complexity of tasks, etc. And yes there will always need to be specialists to whom the rest of the team looks for counsel on specific technical issues. And there may be two businesses and two staffs required to do this correctly but it must be done.

And there will always be institutions which are structured in such a way that for governance purposes these functions are entirely separate. Such is life in the big city and in our work. None of it changes the basic message. Out of complexity will come more giving and grant making!

For wonderful and important current background on the current issues see:

Gilded Giving: Top Heavy Philanthropy in an Age of Extreme Inequality,” released by the Institute for Policy Studies and, raises the specter of a philanthropic sector dominated by wealthy mega donors and their foundations and donor advised funds.

Philanthropy outlook, 2016/2017 and 2017/2018, Indiana University Lilly Family School of Giving, presented by Marts and Lundy. An extract from the report follows:

“The projections of The Philanthropy Outlook point to some dramatic changes in American philanthropy. Contributions to donor advised funds and to family foundations continue to grow significantly, leaving enormous amounts of charitable dollars waiting for future distribution. These donors are seeking meaningful relationships with organizations and the kinds of inspirational ideas that will fulfill their philanthropic aspirations. … the need for vigorous and meaningful engagement on the part of recipient organizations has never been greater,” John M. Cash, Ph.D, chair of the board of directors, Marts and Lundy

Special recognition: This is an appropriate time to note the passing of Mandell L. Berman, a visionary philanthropist from Detroit who supported endowment development in all of its many facets during his entire life as a lay leader and donor and who provided inspiration to many of us to continue in our work and examine its validity and importance. Another Detroiter recently passed and whose memory should not be forgotten is Sol Drachler, former leader of the Jewish Federation of Metropolitan Detroit, a visionary professional and role model for all of those who knew him.

Joseph C. Imberman is an endowment consultant, former Associate Vice President of Planned Giving and Endowments for the Jewish Federations of North America, and Senior Advisor to the Centennial Campaign of the Federation Combined Jewish Appeal of Montreal and the new 2017 Legacy Initiative of the Foundation of Jewish Philanthropies of Buffalo. He has assisted dozens of Jewish federations and agencies over the years to grow and develop their endowment and grant making efforts and helped them to raise millions of dollars.

Donald P. Kent is an investment advisor and partner in the firm of AB Bernstein where he helps dozens of clients achieve their financial goals. He is also former Vice President, Financial Resource Development, United Jewish Communities, and a national expert and resource on these issues.

​ The Gift that Continues to Give:Financial Resource Development


At a recent yearly gathering of 275 of the most devoted and highly committed  donors to the Montreal Jewish community several trends in fund and community development  were conspicuously on display.  
At the meeting 29 million dollars of gifts to the annual campaign and 100 million of new legacy commitments to the one year old  Centennial campaign were announced.  

What can our entire field of North American federation and community foundation philanthropy learn from the trends…?

-the capacity and ability of Jewish donors to support with enormous sums projects and organizations (including the traditional federation annual campaign) through their local federation and/or community foundation is alive and well.  In the case of Montreal 60 million dollars will go into the construction of a new school and the complete renovation of the local YMHA because of the generosity of a few…and both projects are next to each other on the same block and across the street from the Federation. 

-trust in the Jewish community foundations and federations is still highly visible, although it may be based in some communities on a special combination of money management and administrative skill as well as the  belief in the power, knowledge and integrity of particularly skilled professionals.  Donors trust and respect certain pros to help generate and manage gifts which were undreamed of 30 years ago….gifts which in some places would go directly to create private foundations anywhere in North America.  Such gifts can still come to the local community foundation or federation endowment… in very large sums.

-the long term low burner competition between federation and Jewish community foundations to design and deliver mutual trust and admiration sufficient to assure community harmony in fund development will evolve away and become a thing of the past .  Or it will grow worse as it becomes clearer and clearer that the community foundations hold the cards to long term fund development in at least 35 places where two entities exist….unless (and until) the two entities finally realize how to thoroughly integrate their fund development efforts (read the annual campaign) with the individually donor specific concerns of the community foundations, and to do so in a way which is constantly respectful of the mission and vision of each.

-bickering and even animosity or misunderstandings between two boards or two executives on the campaign trail of integrated fund development for the long term should now and forever more be dead.  The notion that federations and foundations can’t change and become what Rabbi Donniel Hartman (at the same event) called Zionism 3.0 (collaborative, concerned about partnerships, flexible and innovative and willing to give in order to get) has to go away or the entire movement is threatened.  (Rabbi Hartman’s comments were said in reference to Israel, not the federation movement.  I have stretched the notions for effect).

-resentment, animosity, and isolation by federations of the Jewish community foundation movement is folly.  For 15 years while I was head of the Planned Giving and Endowment department at JFNA several times per year the blow back of resentment by federations for not controlling every last dollar of allocations in the community would surface.    The only way to complete harmony around use of charitable dollars committed by concerned donors is to have open and regular communication about the creation of shared mission, vision and values amongst all of the grant making and development based institutions in the community.

-the current climate includes the creation of very substantial private foundations, existing large federation endowments, Jewish and even general community foundations, plus several influential  national and international entities which provide services to these same entities.  Many now have next generation leadership concerned and highly knowledgeable about Jewish life.  The scenario needs to be appreciated for what it is….the flowering of the philanthropic impulse from a time when donors made commitments from their hearts and because of their love of Israel first , memory of the holocaust second and community third to a time in which our newer leadership is as or more sophisticated than ever before.  Accept it and embrace it and treat everyone with respect.  And most of all don’t complain!

-the most sophisticated next generation leadership can be 30 or 60 in age depending on the family, and for the most part is interested in substance and getting things done in our philanthropy space.
The impulse to lead old line charities like federations or even community foundations among these leaders is an acquired taste and generally one which is borne in involvement with the annual campaign.  Treasure this opportunity to train and involve the next generation in a non judgemental way regarding both federation and foundation!

-in order for one federation to announce 129 million dollars of new annual and legacy giving in one evening it needed to accomplish several integrated objectives.  First, internally at federation, appropriate resources and direction had to be provided to market the case, train the staff and message the leadership that at this time the two development objectives were crucial.  We call this integrated financial resource development.

  Second the partnership between federation and Jewish community foundation had to be deepened and supported in a way  which would not threaten the foundation or minimize the federation.   In the communities in which two institutions coexist such behavior should be everyday operational necessity in order to manage successful donor relationships and institutional success.

September 19, 2016

Joseph C. Imberman is former Associate Vice President, Planned Giving and Endowments, JFNA and currently serves as a consultant and Senior Advisor, Centennial Campaign, Federation Combined Jewish Appeal, Montreal


Is the Zuckerberg/Chan LLC another nail in the coffin of collective philanthropic responsibility or ...?

by: Joseph C. Imberman and Donald P. Kent

Mark Zuckerberg recently announced the most dramatic commitment yet of a Silicon Valley billionaire, 99% of his Facebook shares to charity.  But he chose to not use one of the charitable vehicles widely used in the current philanthropicworld, let alone the Federation system.  Instead he established an LLC, a common corporate entity which need not have a charitable purpose but may be used charitably.  He therefore can make distributions of all types whether or not they qualify for a charitable income tax deduction.  He receives no charitable deduction when setting up the LLC, only when the LLC makes qualified charitable contributions.

If it catches on, Zuckerberg’s LLC could change the way ultra-wealthy Jewish families structure their philanthropy.  They, like Zuckerberg, might expand their definition of philanthropy.  They might be drawn to for-profit enterprises that provide a social benefit, but are not charitable and might actually be profitable in the traditional sense.  They might engage in global activities that do not qualify for an income tax deduction in the US.  It could be the next great wave and the way in which the next generation of ultra wealthy Jewish philanthropic families think! 

The Zuckerberg announcement comes on the heels of the most recent US Trust sponsored study on high net worth AmericansLast year, virtually all high net worth households donated to charity, compared to 95.4% percent in 2011.  This marks the highest rate of high net worth participation in charitable giving since the study began in 2000.  This high rate of giving among the wealthy compares with 65 percent of the U.S. general population who donate to charity”. …

This years study, more than ever, tells us that when wealthy donors are intentional about and engaged in their giving when they find that meaningful interaction between their ideas and ideals they give more, are more impactful and more personally fulfilled,said Claire Costello, national philanthropic practice executive for U.S. Trust(from the

2014 U.S. Trust Study of High Net Worth Philanthropy).

What percent of Jewish high net worth donors are giving to the Annual Campaign of JFNA and the federations? Is it at or near capacity?  Has this presumed number shrunk or grown over the past 50 years?  Countless community based demographic studies tell us the answer we do not want to hear.  We are more and more dependent for the annual campaign’s receipts on fewer and fewer donors while, at the same time, direct giving to other Jewish organizations, local, national and global continues to soar


Part 1 – The Beginnings

The philanthropic landscape has changed dramatically, especially in the Jewish community.  Choices have mushroomed in a way that was unimaginable 50 years ago.  For many years after JDC and the Jewish Agency joined forces to form the United Jewish Appeal (UJA) this was virtually the only way for Jews to express their desire to help build Israel and serve Jews in needaround the world.  For millennials, this is all ancient history and literally unknown to many of our children.

Today, umbrella or federated giving is less appealing in the Jewish and secular communities.  Donors want to have more control over their charitable dollars.  They question the efficiency of charities, and how much of their donations actually benefit the intended recipients directly and many have very definite opinions about how to spend the wealth they have made or inherited.  Unfortunately, many do not understand the benefits of the Jewish Federation system beyond being a conduit to a multitude of charities domestically and abroad.  Sadly many see the Federation as an inefficient bureaucracy with an inflexible distribution system. 

The wealthiest Jewish families are contributing billions to private foundations, supporting organizations and donor advised funds to extend influence over their families’ charitable giving for generations.  Increasingly, these families are being drawn to a wider array of worthy charitable causes.  These same donors are insisting on a higher level of due diligence, thoughtful review and scrutiny for all dollars granted by their families.  Entire industries have developed over 20-30 years to support this phenomenon.  As we have indicated in earlier pieces, enlightened Federations have responded to this development and attracted a significant share of these families’ philanthropies under the Federation umbrella by expressing broad and deep interest in emerging philanthropic trends in both the Jewish and general worlds.  And those Federations which can prove their knowledge of these trends and interact with the deepest thinkers about philanthropy are able to change the philanthropic world in their communities.  Montreal’s Generations Fund campaign is a case in point…a 70 million dollar hybrid endowment project designed to support middle income family identity building efforts and supported by a comparatively small number of families deeply concerned about the issues. 


A note on donor advised funds (DAF’s)

While our earliest endowment efforts go back to the turn of the last century, donor advised funds (DAFs) became a popular and desirable bridge between donors and Federations in the late 70s and 80s (and continue to today).  But DAFs, alone, are not a synonym for endowments. 

Both Federations and general community foundations pioneered DAFs as an alternative to private foundations and dominated the field until 1990 when Fidelity introduced the first DAF program sponsored by an investment firm (from that point forward this flexible form of philanthropy blossomed among commercial institutions).  DAFs have not caused the demise of collective responsibility.  They are simply a natural outgrowth of a powerful trend in philanthropy that now accounts for over $70 billion today in charitable assets.

In fact, the growth of DAFs has clearly helped Federations  fulfill their mission during the past 30 years even if there have been lost opportunities or the focus has been to much on administration of the funds.  Importantly, Federation sponsored DAF programs have enabled engagement in a different kind of conversation among donors, Federations, and the communities they serve.  The primary goal of these programs must be to better understand each donors philanthropic needs and priorities and to help donors become greater and more effective philanthropists.  In the process, dollars can be made available to fund communal priorities, through the annual campaign or directly with specific agencies or programs.  The anecdotal evidence is clear.  A donor who sets up her DAF at a Federation or Jewish Community Foundation is more likely to maintain and increase support for Federations priorities than a donor who sets up a DAF at Fidelity or any other financial institution.

Unfortunately along the way, many  federations and community foundations became overwhelmed by the requirements of soliciting and managing these programs and neglected the most important part of their work the building of permanent endowment assets for the community.  And in turn may have missed the opportunity to use the DAF program as a way to bring the next generation into a more philanthropically active position with the local community.


Part II Building two development systems

Old fashioned permanent endowment fund development requires entirely different conversations with an overlapping pool of prospects.  We contend, as we outlined in an earlier piece, it is an entirely different type of dialogue.  Focus on DAFs and Support Foundations was the key driver behind the explosive growth of “endowment” assets, from $1b to $16b in less than 20 years.  But, the assets in these vehicles are not all endowment assets.  Providing the resources necessary to manage the relationships with “endowment” families is vital for Federations.  And in many communities investing staff and financial resources in attracting more families and dollars to partner with Federations by creating these vehicles is dollars well spent.  But not if managing these programs fails to result in greater connection with these families and ultimately greater resources for the Federation’s priorities, the highest priority being the building of permanent endowment funds to support the Federation’s mission in the decades ahead.

At universities the highest form of giving, often referred to as the "ultimate gift," is an endowment to the institution to achieve some sort of individual and collective philanthropic goal..  At universities, donors who make a meaningful commitment for a permanent endowment gift might not be expected to continue their annual giving.  In contrast, for Federations the annual campaign has been and still is the sine qua non.  It is the modern expression of collective responsibility.  Perhaps this helps to explain why there has not been a high priority consistent campaign-like approach to building Federations’ permanent endowment funds until quite recently.In the early days of Federation endowment development, (pre-DAFs), many Federations attempted to build permanent endowments through their legacy programs, sometimes referred to as "Letter of Intent" or "Declaration of Commitment" and then Book of Life programs.  In some communities, these programs resulted in a significant increase in permanent endowment assets, typically a decade or two after the programs were initiated.  But it was rare that the “campaigns” which produced the commitments persisted more than a few years.  They would come and go with the capacities or interest of staff or leadership until the advent of the Create a Jewish Legacy and the Life and Legacy programs.  Congratulations to JFNA and the Harold Grinspoon Foundation for funding and managing these programs over a now sustained period!

Not surprisingly the most effective campaign to build permanent endowments in the Federation system has been the campaign to endow annual gifts.  The women who created the Lion of Judah endowment program (LOJE) deserve tremendous credit for spearheading this effort first in Miami and now nationally.  The bulk of these commitments estimated to be in excess of 1 billion will only be realized on the death of the donors.  The annual grants from these endowment commitments will likely exceed $50 million, accounting for 5-7% of annual campaign revenue in the future. 

A brief note about permanent endowment funds would be helpful.  Permanent endowments are endowments that have been designated by donors or Boards to provide perpetual support.  Typically charities “spend” ONLY 3% – 5% annually to ensure that the principal is preserved and ideally the annual grant can keep pace with inflation.  This annual grant can either be for any purpose (unrestricted) or for a specific purpose (restricted).  Most charities would prefer that endowments be as unrestricted as possible while most donors would prefer their endowments to be restricted in some fashion. 

Federations are unique in building endowments to perpetuate annual giving.  But given the role of the annual campaign in Federations, it is no surprise.  Technically PACE (Perpetual Annual Campaign Endowment) and LOJE (Lion of Judah Endowment) funds are restricted endowments, but since the annual campaign funds the allocations process, it is considered by some the equivalent to a unrestricted endowment.

Chicago Federation’s Centennial campaign, raised over $750million in permanent endowment and capital commitments and is now in its 17th year with over 5000 gifts.  It is likely the single most successful activity of its kind in 50 years and provided many opportunities for donors to restrict their gifts for a wide variety of purposes.  Chicago planned givingprofessionals believe,  based on their experience, that“listening to a donor” is the single best strategy to secure a major endowment gift, often resulting in endowments to support specific themes or agencies under the Federation umbrella.

But nosingle broadly based program/s have risen to the remarkable success of the JFNA and Grinspoon Life and Legacy programs both of which were built on a model developed in San Diego by the Jewish Community Foundation .  CJL and Life and Legacy provided the support and resources to encourage many communities to mount community wide permanent endowment campaigns as well as crucial resources to support the program locally. AND THEY ARE WORKING.  They are working because the focus is not solely on the annual campaign.  The goal is to undergird all of the critical Jewish institutions and develop permanent endowment assets which will ultimately be managed by the Federation or Jewish community foundation.  This represents a new type of collective responsibility and is reestablishing the Federation as a central address for financial resource development in many communities.  This is an important point that might get lost…so these programs are building endowments at local Jewish institutions but the funds will be held and managed by the Federations/community foundations…a win-win for the Jewish community as well as emphasizing another unique role that the Federation/JCF plays in the community

As Federations and their leadership consider goals and strategies to continue to best serve the Jewish community at home and abroad it may be helpful to consider how best to answer the following questions.

1.     Should federationsrealign their endowment, planned giving and donor advised fund efforts into separate activities with full support for each (as in the case of UJA Federation of New York and the Jewish Communal Fund)?

2.     For communities not large enough to fully support all threefunctions, should their DAF programs be shifted to either larger, sister Federations or to a newly created national DAF platform operated on behalf of most or all Federations?

3.     How to continue working at the construction of a fully integrated resource development structure in every community, particularly in those with separate governance for endowment assets?

 4.      How should professional staff be optimally aligned and trained in response to how the prior three questions are answered?

 5.     What can be done to more powerfully explain to donorsthe need for continued growth of endowment resources withpublic charities dedicated to address communal needs?

 6.     What is the next generation of electronically based social media which can be brought to bear on the development businesspresently reliant on long term individual relationship building?

 7.     What if anything should be done nationally to learn from the potentially game changing implications of the Zuckerberg/Chan gift?  Will the availability of a charitable deduction be less meaningful to the more significant Federation donors?  Should Federations seek to pioneer the use of for-profit entities to fulfill their mission as they did with DAFs 30+ years ago?

 Donald P. Kent is an executive with Alliance Bernstein.  Joseph C. Imberman is Senior Advisor, Centennial Campaign, Federation CJA, Montreal.  Both are former Vice Presidents of the Jewish Federations of North America and its predecessors (UJC and CJF’s) Planned Giving and Endowments department.

Note:  the authors wish to express their thanks for suggestions and edits made by Alan Gross, Edward J. Beckwith, Steven Woolf and David Saginaw

 Next article:  “Implications for further developing the donor advised fund program”.






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Think Forward – the truth about Federations, donor advised funds, and supporting foundations (or “what is participatory philanthropy”).

Joseph C. Imberman and Donald P. Kent

The authors are former heads of United Jewish Communities and the Jewish Federations of North America’s Planned Giving and Endowments department and represent 30 years of experience in endowment development and management with these two charities.  Today Mr. Kent is a Bernstein investment management specialist and Mr. Imberman is a consultant on endowment and foundation management currently acting as Senior Advisor, Federation Combined Jewish Appeal of Montreal (FCJA).

As of the end of 2014, Jewish federations and affiliated Jewish community foundation endowments (collectively referred to as federations), donor advised funds and supporting foundations totaled over 17.5 billion (from initial results of JFNA 2014 Annual Endowment survey). Understanding endowment development at federations requires a special set of eyes and an understanding of the growth of philanthropy in our system.  The centralized fund raising and distribution model of federations and United Ways has deep historical and biblical roots.  The idea of collective responsibility is a concept that federations act upon each day and must continue to promote to be true to their roots.  It is understandable that federations would like to control the distribution process of all funds held internally.  But many donors in the Jewish community and beyond want to have as much influence over  their charitable dollars as possible.   Luckily, in the 1960’s and 70’s, a small group of enlightened professionals, mostly attorneys, persuaded federations into becoming leaders in the emerging world of donor centered philanthropy.  

Over the next four decades, federation communities created and greatly expanded their planned giving and endowment efforts but unlike universities, hospitals and other non profits concentrated primarily on building donor advised fund programs and “family supporting foundations”.  The founders of this effort probably had no idea how big it  would become and what impact it would have on federations and many other charities.  Luckily, many large city federations in particular now understand the importance of partnering with enormously wealthy and influential families to help them develop their own concepts of enlightened giving as well as their Jewish legacies to the community.  The use of this type of philanthropic power by families is now a fact of life in communities such as Greater Metrowest (NJ) which have used their expertise  to drive campaigns which develop very substantial resources for Jewish education and identity from families who care deeply about the subject.

  The changes to the laws of federal taxation dating back 40-50 years have helped to spawn the growth of donor advised funds as the single fastest growing philanthropic phenomenon in North America.  At the same time, donor advised funds have helped Jewish philanthropy to morph into a more entrepreneurial and less centrally controlled enterprise.  With little fanfare, the most mature federations have embraced this opportunity and greatly increased their relevance and impact.  Enlightened communities such as Chicago, Baltimore, Cleveland, Los Angeles, San Francisco, Boston and San Diego have created enormous programs to grow and enhance the philanthropy of their wealthiest families.  They understand that these new sources of philanthropy (including donor advised funds, restricted and unrestricted funds, trusts, etc.) do not undermine the annual campaign.   In fact being relevant with many of these families requires a different kind of partnership. The most experienced managers interact with key donors by being a resource for information and counsel.  Doing so helps with the inevitable intergenerational dialogue over the role of the Annual campaign and deemphasizes the role of Federation as a one dimensional charity devoted only to the annual campaign.  By providing resources and guidance, far more dollars ultimately are devoted to addressing federation priorities, but not solely through the Annual Campaign.  

Note:  Thinking this way should remind the reader that the perennial Investment committee conversation about spending rates is really about much more than simply cash flow.   It is really a philosophical conversation about the need to balance future community needs against the urgent needs of today.  

The complexity of federation endowment programs is better understood when one thinks about the need for balance between both lines of business (see note below describing permanent and participatory philanthropy).   Thirty to forty years after the tax legislation mentioned earlier and the growth of donor advised fund portfolios, communities find themselves desperately in need of unrestricted or restricted resources to help grow and respond to change and emergencies every day.  
All endowments sources (depending on restrictions and purpose) can be drawn upon as potential resources.

Quick Case study

  UJA Federation of New York has proven that devoting sufficient resources over time to the development of unrestricted endowments can make a huge impact.  Due to a historical anomaly, New York’s donor advised fund program is housed in a separate charity, the Jewish Communal Fund (JCF).  JCF is one of the oldest and largest of its kind in the business.   And besides the amazing philanthropy it promotes, each year its “revenue over expenses” pour into the federation annual campaign; over $2 million in 2015.  But perhaps even more instructive is the impact this has had on the federation’s endowment program.  Without a donor advised fund program to manage, the bulk of the substantial resources devoted to planned giving for decades has focused on building its permanent endowment.  As a result, in the last allocation cycle $70 million of the total $205 million allocated came from current and accumulated bequests and endowments. 

Selected other communities have created special endowment campaigns in both the U.S. and Canada.  These efforts complement the dollars available from the annual campaign currently, and perpetuate  the annual campaign of each federation (e.g. the Lion of Judah Endowment program).  The vast bulk of donors see their campaign giving as a yearly commitment and literally need to be reminded that they could do for federation what some donors do for other charities….endow their giving for designated purposes.

As interested observers who have spent many years in the system and out, we note the budgetary and philosophical woes of federations as well as the rhetorical flourishes of leadership who indicate commitment to endowment development but have difficulty funding it.  Most importantly, we notice innovation over a period of 5-8 years among the federations willing and interested in supporting education about investment activity through JFNA’s Investment Institute, as well as the  Harold Grinspoon Foundation’s Life and Legacy initiative now operational in 29 communities (out of 150 plus federated communities) and the JFNA’s Washington office  which monitors and works with legislative authorities each time an issue impacting philanthropy arises.  It is also reassuring to know that selected legal and investment firms continue to support endowment development in the system.  The link between the law and endowment development has never been stronger and the need for endowment professionals to understand the role of gift planning and compliance is crucial.  

 In order to continue to expand federations’ philanthropic foot print and enhance its impact, all federation leaders will need to embrace the model which some of the more advanced have developed for 15 years.  The annual campaign must continue to be a core business of federations (if not all charities), but more can be accomplished by partnering with major philanthropists than by insisting that all philanthropy fit a single model of control. 

So what are the teaching points for communities?

-Showcase the benefits of endowment development to the board and agency leadership.  Do so with financials and emphasize the power of endowment to significantly impact the budget.
-Provide adequate staff and financial resources for these programs to grow and flourish.
-Get to know and identify each member of the most philanthropic families in your community and engage in long term education and cultivation of these uniquely positioned individuals.  
-Develop supportive policies and procedures to assure continuity of the program and as well as staff continuity.
-Develop more effective ways for endowment development to flourish in a culture  which still advocates the primacy of the Annual campaign.
-Make sure that senior Annual campaign pros are trained in the basics of endowment development and assure that both Annual campaign and Endowment  responsibilities are shared by all.  
-Create and support a group of leadership dedicated to working on these issues.
-Educate key federation executives about the benefits of evolving beyond a central planning model reliant solely on the annual campaign to fund the allocations process.
-Introduce a new model combining collective responsibility with participatory philanthropy to broaden the horizons of board members, donors and staff.
-Bring agency leadership together with the federation’s leaders to consider how to develop permanent funds focused on the long term needs of the community.
-Assure that marketing resource is put to the task of branding and developing the endowment product.


Permanent endowment style philanthropy  - designed to develop unrestricted or restricted funds created by donors who trust the decision making structure of a recipient charity.  Think Harvard, Yale, UCLA, Federations of North America.

Participatory style philanthropy – a system in which a charity manages/owns certain funds in order to guide families to become more philanthropic while developing deeper relationships with  donors.  In this way, Jewish federations have helped countless families to become active participants in philanthropy for many years.


Why does Endowment Development in the Federation system continue to be an underappreciated asset?

A:  The vast bulk spend most of their fund raising budget and hours raising annual funds to keep their operations whole during any given year.

 Case statement:  What can happen in a Jewish community which spends significant time and energy on a restricted endowment concept crucial to the Jewish future?  (And which is neither a PACE, LOJE or Donor advised fund!)

 Recently Mr. Imberman became a consulting resource to the FCJA or Montreal Jewish Federation to assist in crafting a new Centennial endowment campaign.   While Centennial is the big current story several years ago the lay and professional leadership of Federation CJA engaged in an unprecedented and innovative initiative to develop an endowment fund specifically focused on strengthening Jewish identity in this very unique community.  That fund is called Generations.   Close to $70  million dollars has been raised toward a goal of $100 million from a small number of major donors highly vested in expanding access to and excellence in areas that bridge the gamut of Jewish experiences for children, young adults and young families.

  Centennial in Montreal follows on the heels of other communities celebrating their 100th year anniversary with a variety of major initiatives.  Similar large city projects have been mounted at least 15 years ago in places such as Chicago, Cleveland, San Francisco and Greater Metrowest and in smaller communities such as Birmingham and Hartford.

 A common fear of endowment efforts is that they will sap annual campaign revenue from key donors.  None of this has happened in Montreal.  In fact, the same 15-20 donors to Gen J (as it was originally called) now contribute individually more to the annual campaign than they did before.

 Another common fear is that federation does not have the time or resources to spend on endowment in the hard pressed environment of annual campaigning, particularly in places where as in Montreal the annual campaign takes place in a highly compressed 3 month period.

Understanding the need to support fund development infrastructure, Montreal invested in a Director for all of the Generations fund activity pre and post fund development, and all the departments of federation worked together to assure its success.

 Another supposition is that where there is a separate community foundation, all of the activity surrounding fund development for endowment purposes should be the bailiwick of that entity.  Not true in Montreal!  Gen J was a wholly collaborative effort by both federation and foundation.   Federation and Foundation staff met frequently to assure that all fund development activity in particular was appropriately integrated with the annual campaign as well as normal and ongoing Foundation education and solicitation of donors.

 Another common concern in communities where two entities co exist is that they will have difficulty agreeing on goals, means and how to accomplish a big project like this, even when it can benefit both.  Not true in Montreal where as in other places leadership of Federation and the campaign is integrated with that of the foundation and highly collaborative.  In fact the foundation recently voted to turn over the income from its unrestricted fund to federation for integration into its yearly grants process, a remarkable exercise in philanthropic leadership and one which will be monitored closely by both organizations to assure that new and innovative projects as well as more traditional activity is supported.

 Generations proves that different kinds of successes can be identified.  While the fundraising isn’t complete, some of the critical components and success factors of the Generations Fund to date have included:


1.       FCJA taking the lead by laying out a forward-thinking vision with a credible action plan, and boldly front-ending $1million dollars of seed funding for high impact initiatives.

2.       Creating and fostering strategic partnerships among the Federation, the Jewish Community Foundation of Montreal and major donors.

3.       Engaging philanthropists and foundations in serious discussion of the community’s needs and the potential for exciting programs to address them.

4.       Aligning major donor’s visions for transformative change with community priorities.

To date, the dollars raised for the Generations Fund have had the following impact on community:


Jewish Day Schools:

-          7 Jewish Day School Systems with close to 3,500 students are impacted by the CAPS program. The CAPSprogram has provided 640 students with access grants for Jewish school that freezes theirtuition and provide their families with comfort of mind as to the cost of Jewish School for the duration of their studies

-          Over $3.5 million has been allocated to middle income parents through our CAPS Program since its inception

Jewish Overnight Camps:

-          4 Jewish overnight Camps with close to 1,580 campers are impacted by the Generations Fund

-          Through the Generations Fund close to $1 million of incentive and access grants have been allocated. Thanks to these grants 1,333 campers have experienced a Jewish summer camp experience!


Jewish Day Schools:

-          7 Jewish Day School Systems with close to 3,500 students are impacted by Generation Fund Excellence Grants

-          Over $3 million have been allocated directly to the 7 schools over the past 4 years to help bolster the educational excellence in the schools and provide them with the much needed capital infusion to remain attractive in the competitive market place.

Jewish Overnight Camps:

-          4 Jewish overnight camps have received $300,000 to help support their governance, programs and Jewish content programming for the summer months


-          100 leaders from 22 synagogues have participated in the “Tools for Shuls” initiative, aimed at empowering synagogue leaders to re-imagine synagogue life in Montreal and strengthen the synagogues’ capacities for long-term growth. 


PJ Library

-          A total of 5,145 children have received monthly mailing of books with Jewish content, inspiring their parents to engage in Jewish conversations and Jewish learning from a very young age

-          Fostering a love and passion for Jewish culture and traditions through reading

Young Adult Engagement

-          Over 2,500 young adults have created and/or participated in programs that they have incubated to connect them in relevant ways to their Jewishness as they define it.

Promise & Cultural Grants

Over 130 one-time grants have been awarded to Jewish organizations, grassroots groups and individuals to seed innovation for programs that have enriched Jewish life and literacy, increased connections and promoted social networking among over 10,000 teens in non-Jewish high schools, young adults, young families, and less connected groups.

 For Federation CJA, Gen J was a major first endowment accomplishment.  The mounting of a Centennial campaign to raise $115 million dollars of new endowment commitments in the form of estate planning and other legacy vehicles over at least a 3 year period will build on the success of the former effort.  Both current and future revenue from the campaign will be managed by the Jewish Community Foundation, now almost $500 million dollars in assets and vastly experienced in investment and endowment management.  The Centennial Campaign will be chaired by Stephen Bronfman and Stephen Gross, both long time distinguished community leaders.  Gen J was led professionally by Natana Shek Dor and was chaired by Claudine and Stephen Bronfman, and Joel Segal (chair of fundraising), incoming Annual Campaign chair and former President of the Jewish Community Foundation of Montreal. These leaders who provided key intellectual capital for the Generations Fund will do so for Centennial as well.  Deborah Corber is Federation CEO and Kathy Assayag is Foundation Director.  All earlier donors to the community foundation who left bequests and other gifts for federation totaling (over many years) 200 million will be acknowledged as the federation begins its total 300 million dollar effort. 

 The Centennial campaign is one of three major projects which the Montreal community is mounting for its centennial year in 2017.  The other two are a major celebration and a second Mega Mission to Israel.  X participated in the first mission held in 2015 (?).

Yair Szlak is Chief Development Officer and responsible for the majority of the activity described above.

 Robert Kleinman is Executive Vice President of the Jewish Community Foundation and its former long time Director. 

 Evan Feldman is President of Federation CJA.  Michael Etinson is Chair of the Jewish Community Foundation

Listening to donors share their most important interests and dreams for their own families as well as a community and not being impatient to create another transaction can result in transformative gifts, even in the often old style annual campaign structure in which endowment departments generally find themselves in our federation system.  Doing these things in the context of Federation’s most important priorities can change the course of our ability to serve our communities.

Next article:  Think Forward (our GA theme)…more on the past and current structure and prospects for endowment development at federations, a collaboration between Joseph C. Imberman and Donald P. Kent.

Raising restricted and unrestricted endowment funds

“No single thing is more difficult than asking a donor to part with a major endowment gift for unrestricted purposes – be it now or tomorrow. “


The very act of  becoming a philanthropist in today’s environment seems to demand that donors carefully think through their motivations, capacities, mission, vision and values.  A host of books trumpet this idea…the self examined philanthropist.  And yet we know that of the very small number of gifts received by charities for endowment purposes each year, a number are unrestricted and even more are restricted in some fashion.   And from the charity’s point of view nothing could be more important than the former.  So why don’t charities work harder at raising truly unrestricted gifts?  In the federation world, funds endowing the annual campaign come as close to unrestricted as one could wish.  And for many senior leaders such funds in fact represent our highest aspiration…for many reasons…the primacy of the annual campaign is one of the oldest concept in our lexicon of fund raising ideas.  And the campaign has suffered terrible reverses in terms of numbers of givers over the last 25 years.   One can scarcely imagine where it will be 25 years hence. 


Unfortunately raising unrestricted gifts requires unique donors and unique spokesmen.  Unrestricted giving requires a leap of faith about the future of the charity, its current mission and vision, or at the other end of the spectrum someone who simply hasn’t considered the issues deeply or trusts that the institution will do the right thing.  Even restricted giving, the current golden child of permanent endowment contributions requires a committed soul, a soul who believes in the mission and the past and current leadership’s ability to execute on mission and a desire to be there for the leaders.  The lure of restricted giving and what makes it so powerful is the win/win nature of the transaction.  Both charity and individual presumably get something they really want,, unless like the Community foundation with which I visited recently, giver, gift and priority seem to come together to the benefit of the community in a way which is wholly unplanned. 


Particularly as we continue to expand our dialogue over legacy giving and extend our efforts in this area how can we assure ourselves that we are doing our best to encourage permanent giving  for unrestricted or restricted purposes, or what should we expect from our donor population as it continues to morph  in front of our eyes?


There are old truths and new..


1.     The oldest truth is that no one gives who is not asked.  There is ample evidence of this fact among pros who have been involved for many years.  But many donors who were early and continuous contributors to the annual campaign were reflexive legacy donors and simply asked their estate planner to “add something” for federation…thus producing a wellspring of unrestricted giving unfettered by purpose clauses.  Nobody ever had to ask these donors…they simply stepped up.


2.     Those who are cultivated and simply queried as to their philanthropic motivations as part of an organized campaign sometimes bring themselves along over a period of weeks or months and make much larger gifts than they thought would to begin with…see the same prominent small community’s current 40 million dollar endowment campaign I mentioned earlier.


3.     Many donors see “their” donor advised fund as a permanent endowment and for all intents and purposes have misunderstood the purpose and functioning of the fund they created with federation and or foundation.  These are really in need of education.


4.     Others get lost in the rhetoric and types of funds and literally move in reverse from the solicitor.  This kind of individual needs a simpler solicitation.


5.     For many years Jewish federation endowment and foundation activity has coexisted in the same philanthropic space as the general community foundations…sometimes a trifle competitive and sometimes more collaborative.  Permanent giving could only become a larger phenomenon in any community by collaboration on selected key fronts like joint programming for professionals in order to get the word out effectively.   The sense that we are in different universes should diminish.  Relationships should increase, we should learn from each other, we should showcase our desire to benefit the entire metropolitan community, we should take advantage of mutual training opportunities, etc.  Build relationships!



6.     The wisest do many things at once…


-they know the interests and backgrounds of their donors

-they have a real sense for community needs and can articulate them in written and visible technically attractive ways.

-they are good listeners and can help a donor achieve alignment between personal interest and community need.

-they are able to clearly articulate the profoundly Jewish nature of their organization and differentiate it from the “competition”.

-they can point their senior leadership at the most important donors

-they educate their professional advisors about the most important needs of their organizations rather than simply relying on them for professional counsel.

-when able to do so they specifically campaign for permanent unrestricted and restricted funds and minimize other kinds of giving.

-they involve and integrate into the sales team all staff members who bring something to the plate.

-they assure that the messaging for permanent funds is so clearly of prominence that no donor can miss the importance of these efforts.

-they allocate resources to marketing and development efforts for unrestricted and restricted endowment in ways that are adequate to get the job done.

-leadership makes the case internally that unrestricted and restricted permanent funds will support the budget of the overall organizational budget in ways that no other source of funding can…



So what’s actionable here?  Follow the yellow brick road and see whether the wizard of oz turns into your greatest donor and don’t be surprised if he or she turns out to be your greatest supporting foundation family, a relatively unknown widow who consistently supported the annual campaign with small gifts,  a female major donor to the campaign who truly waned to create a major scholarship campaign or a former annual campaign chair who wanted to create a fund to do something wonderful overseas or in Israel.




About the Author:

Until recently Joe Imberman was Associate Vice President, Planned Giving and Endowments, Jewish Federations of North America, a position he held for almost 15 years.  Prior, he was Endowment Director of both the Miami and Detroit Federations for a total of 18 years.  He currently manages a consulting practice for endowments and foundations and serves as Senior Advisor to FCJA, the Jewish Federation of Montreal.  He can be reached at



Why Endow the annual campaign? Or “How did they do that?”

We hold these truths to be self evident”…..just as one of the great speeches of our nation makes its truths clear to the listener,  those of us who have been insiders in the world of  Jewish federation philanthropy see the need to continue the role and the strength of our annual campaign as our most important objective.  There is only one problem with this statement.  The campaign has relied for its strength on larger and larger gifts from a smaller and diminishing group of aging and committed donors over a long period.  Despite our greatest efforts to involve next gen donors and women as well as the major giver we find that each year we grow by 1-3 % in receipts only.  Ironically some of our oldest truths seem to continue – those who participate in federation missions seem to give at a higher level than they did before or in relation to their peers as donors.   But little else we seem to do produces a desire by the next generation to give in great numbers to an umbrella campaign supporting local, national and international agencies.


For the last 5-8 years we have seen the growing influence of a legacy program which has as its biggest objective nothing less than the endowing of each local Jewish community.  In some communities CJL (Create a Jewish Legacy) as we call (or Life and Legacy as the Harold Grinspoon Foundation calls it)  has even eclipsed the Lion of Judah endowment program in visibility.  Why is this important?  Endowment, or the hidden idea behind the fund raising objectives of our resource development activities is finally becoming a more accepted concept for leaders of Jewish charities.  Over a period of 10-15 years, even a small number of private foundations have gotten into the game, using their own unrestricted dollars to “make a good investment” as Harold Grinspoon has said or as Stanley Bushman of Kansas City has done.  And they follow the earlier efforts of big foundations like Kresge which saw the wisdom of challenging charities to raise dollars for endowment 20 years ago.   All have put their money where they really see a benefit…helping local charities to match dollars committed for endowment and in doing so helping  to insure the financial health of the charity and the constituencies it serves..  imagine a world in which 50% of the operating budget of the organization you serve comes from endowment resources or donor advised funds?


In the world of federation philanthropy, the annual campaign sustains us but in many cases when the campaign begins it can do so with up to 10-15% transferred literally “at the push of a button” from permanent gifts held locally by the federation or local foundation.  Some communities are claiming up to 30 or even 40% of the annual campaign’s operating revenues are coming from “endowment” (including donor advised fund) sources.


Raising significant endowment for the annual campaign allows the community to do many other things  with its resources (both capital and programmatic) and to stress less about changes to the demographics or giving habits of its donors.    To have the ability to generate this kind of ongoing resource from major donors in the community several key variables have to come together:


Institutional and Personal


-Trust in the community’s expertise at financial management and investment

-Belief that the current and past leadership of the community have its best interests at heart.

-Commitment by senior leadership to providing budget support for long term financial revenue development activities.

-attention to the investment objectives of the endowment program.

-excellent management of the image and activities of the charity in relation to its mission.

-asking for the gift and reminding donors of its importance

-thinking about the annual campaign as an endowable institution

-Connection by the donor to the lead staff and volunteer leadership of the charity.

-Local professionalization of the staff to non profit managers with a panoply of skills.


What are the actionable steps here?


-if you are in a senior management position look at your resource allocations within financial resource development.

-if you are a campaign leader look at the internal balance between annual campaign and endowment.

-if you are a marketing executive how can you burnish the image of  the charity in such a way as to make longer term donors out of annual donors?

-if you are the CEO are you thinking about who is leading your long term development efforts?

-finally if you are the Endowment executive what are you doing to build the business plan of your unit?

The role of leadership in endowment development

In my first two posts I tried to focus on some strategic concerns about our field of endowment development at Jewish federations and pointed out many of the issues involved in growing our asset base and why I thought that endowment development was so important to the future growth of our system.


In this post I’d like to build out the role of lay leadership in endowment development.


Helping donors to see the validity and power in involving themselves with charities such as community foundations and federations is a life’s work.  Donors don’t tend to become “accidental philanthropists” to use the phrase of a close personal and professional colleague.  They make gifts because something has happened in their life experience which compels them to do so, they believe strongly in the financial and professional validity of charitable giving and most importantly someone has had a profound impact on their desire and knowledge of charitable opportunities.  Such a person can be a mentor, a child, a financial advisor or an executive with one of the charities they support or most importantly a peer.  In the world of Jewish philanthropy for over 100 years communities have relied on the power of volunteer involvement and ownership of the charitable product.  This ownership has had profound and intimate involvement in every aspect of what Jews have accomplished as a federated  system….perhaps more so than in many other non sectarian charitable organizations.


Our training as professionals has instilled in us the importance of involving lay leaders as partners.  The more complex the decision making around governance, finance, fund raising, internal operations, strategic planning and even grantmaking, the more systematic the involvement of our lay leadership. 


Endowment development is a crucial philanthropic resource which requires command of  a variety of  rather technical disciplines in order to be successful.  A particularly skilled leader once told me that “endowment development can’t be taught.    You learn by osmosis”.    She was an estate planner to one of the wealthiest donors in our community.  Is this true and what do we need to do in order to help our communities find and train their most successful leaders?


1.     Finding endowment leadership isn’t for the faint of heart.  The most sophisticated financial, investment and legal minds are attracted to this business and they are frequently intolerant of mistakes, lack of understanding of complex transactions and sloppy thinking.  Some operate on the periphery of what we do as an institution and are even unfamiliar with the work.


2.     The reasons that we need endowment leaders are several - to extend our reach in donor education and solicitation, to solve complex problems of the law, public policy and its impact on giving and investment and to provide leadership to our overall institutional advancement.  Great endowment leaders will motivate others along the way and make the case for endowment development in public places and among peer groups and to their clients. 


3.      Many times, the people we crave to take on important roles in our endowment campaigns are those who are most remote and difficult to access because of their business lives.  They simply do not have the time to relax and solve problems with you or if they do they will be able to take precious few minutes to do so. 


4.     Those who have actually created funds will understand the fund development process particularly well but may or may not be able to motivate others.  Because endowment development is a business which is not well understood by much of the generally philanthropic public we have to look even harder.   Someone perceived to be a potential leader may have served in many capacities with other charities in all likelihood.


5.     Corporate executives who support what a foundation or federation does may be best choices for an overall endowment chair while estate and tax planners may be best for the Professional Advisory committee.  Next gen leaders whose families have been philanthropically active are becoming increasingly visible as are women with either fund raising or professional background in this area or who are donors in their own right with or without their spouse.  Exceptions to every rule abound though.  Endowment leadership will frequently come from the financial and legal disciplines which provide the key components of what we do to secure gifts.  But there are historically comparatively few legal and financial pros who feel very comfortable asking their respective clients to make gifts. 

Permanent giving for endowment purposes - our expectations for the future and suggestions for success

Permanent giving for unrestricted purposes, or the holy grail of endowments for those who solicit has become an almost distant memory in our world.  Jewish donors give on a completely unrestricted basis almost solely in their estate plans and when they have not had the benefit of counsel.  The Annual campaign of the system has no more than 1-2% invested and permanently on the shelf.  In addition there may be several billion dollars in pipeline commitments through our PACE, LOJE, and Create a Jewish Legacy (CJL) programs.  CJL, our most recent and proudest achievement encourages legacy participation, but does little on a national basis to help the donor focus, preferring to encourage local donor centered philanthropy, another holy grail of our movement.  Local communities have their own spin on how to speak to donors about these issues, having in many cases involved agencies and even synagogues in the planning and execution of the program (read about the Harold Grinspoon Foundation’s Life and Legacy program). 

We know that legacy giving is the most important way to guarantee a future cash stream to our communities.  Donor advised fund assets tend to expire with the first generation, (although hard data on this topic is anecdotal at best).  What should be our expectation of endowment giving as we look at the next 5 to 10 year period?

-First, even if we do little the system’s resources in this area will likely continue to grow and produce 30 percent of the national campaign in the next 5-8 years.  Every investment and philanthropy publication (see Giving USA 2014 as an excellent example, the Chronicle of Philanthropy etc.)  predicts the continued growth of donor advised fund programs and touts them as a major generator of new philanthropy.  Unfortunately, the system struggles to find the resources to install or upgrade endowment and donor advised fund technology to compete with the many financial firms dedicated to managing the substantial resources already on hand.   The potential of a unified national approach to  technology which both Jewish federations and community foundations could share is as yet an unrealized goal.  Each community continues to do this on its own.  And even though we lag the creation rate of Jewish private foundations substantially  (see attached chart on Jewish private foundations and endowment funds), donors still give for many reasons, including commitment to the mission and values of the movement, tax policy which still encourages philanthropy and the customer service provided by staff members in local communities.

-Second, communities with the capacity to focus and provide resources should strongly invest in personnel to grow endowed giving.  Our market penetration is still very low in the permanent fund area, and while not every donor is willing to endow his/her annual campaign gift, donors understand the request which is being made of them.  It is estimated that 65 billion is held by North American Jewish private foundations many of which make substantial gifts to the Annual campaign! 

-Third, communities with more limited resources need to continue to integrate their fund development efforts in order to ensure that donors are exposed to more than one request and to project a more complex picture of resource development capacity.  Staffs need to be trained to be able to focus beyond the annual campaign.  Agency executives need to be pulled in to help.  Federations and Jewish community foundations need to work as closely as possible to maximize local resources and receipts.  In a period of 10 years, the donor base will have morphed significantly and our solicitation and education efforts will have to evolve accordingly.   In addition and crucially, the annual campaign must have a more equal partner in the endowment department or the Jewish community foundation down the hall or in the next building.   

-Fourth, Multi generational family philanthropy, which JFNA has attempted to trumpet with the help of special funding and resources from the Andrea and Charles Bronfman Philanthropies will become a way of life as we attempt to bring on board the next generation of our most generous families.  Losing this opportunity could have a significant down side impact on our system.  In many cases federations and community foundations are suffering from a surprising lack of information on who even encompasses the next generation in a given community.

-Fifth, investment management, the penultimate insider business of federation endowments faces a crucial decision.  Will the lay and professional leaders responsible for this singularly important function see it in our interest to pool endowment resources much more effectively, thus lowering fees and increasing returns?   Asset growth through prudently aggressive investment management could substantially increase the resources available to carry out our mission.

Accepting these challenges in the short term will almost assuredly take our invested assets from $14 to 20 billion and beyond in a 5 to 8 year period.  The resources exist, in the area of governance, financial management and even development expertise to fulfill our potential and take the movement to its next level, perhaps even changing the focus from transactional to permanent philanthropy,  if only we can summon the determination to invest accordingly!

So here are some suggestions from the playbook of the more sophisticated endowment developer.  Do an audit and see whether you are taking the time or trouble to implement them in your campaign.

1.    Analyze or do an inventory of your major gifts and corresponding endowment realities line by line.  Where are you?  How do the numbers relate to future needs of the community?

2.    Based on the analysis and needs create objectives – what needs to be done to accomplish these objectives?

3.    Have the Board and Executive committee ratify the objectives and plan with a commensurate allocation of resources.

4.    Create plans for each major donor.  Build an information base.  Where are the donors in terms of your objectives?  Who is going to visit with each?

5.    Visit each donor.  Present the case but more importantly listen to their needs.  What are their interests?  How does family philanthropy and the interplay of the next generation’s needs and interests interact?  How is each family giving on a technical basis – private foundation, donor advised fund, supporting foundation of a public charity?

6.    Revisit each donor’s plan.  Based on their needs, interests, technical realities build an ask – endowing a gift to your annual campaign, endowing a gift with a contract between you, the private foundation or donor advised fund, endowing an agency or thematic gift based on interests, etc.

7.    Ask – based on results rework the plan, timing, or begin stewardship of the gift.

8.    Analyze results versus objectives at milestone points.

9.    Repeat over and over – securing the future needs of your community is a never ending project!


Click here to read the first part of this article

Growing the capacity of endowment development to meet needs in the Jewish Federation system

This is part one of a two part article. Part I: Background information deals with the Federations efforts to grow endowments and focuses on donor advised funds. Part II will deal with permanent endowments funds and suggestions for growth. These principles apply to all charities seeking to grow funds of this type.

In 2013 the JFNA’s annual endowment survey reported that total assets under management in the 151 federated communities was approximately 16 billion dollars.  Those same entities distributed 1.4 billion in grants in that year.  2014 data should be published later this year after JFNA reexamines the way in which it collects and reports the information. 

Endowment development in the Jewish federation system is the product of a long and distinguished history and has been one of the most productive philanthropic revenue streams for the Jewish community.  It is also a stream with significant unrealized potential, and one of the least understood.  Indeed, endowment contributions in 2013 amounted to $1.6 billion, a figure that continues to eclipse the collective total raised in the annual campaign by almost 67 percent.  As someone with a 30 plus year career in federation endowments both locally and nationally I feel a responsibility to remind leadership which is deeply concerned about the growth of our capacity to serve constituencies spread across the globe about the opportunities to be realized from continued endowment growth.

As many are aware, the biggest opportunity is the increasing participation in and growth of assets in donor advised funds which have been a trademark of Jewish federation endowments for over 40 years.   In 2013, donor advised were prevalent in over one half of the Jewish federations, and comprised almost $5 billion or 30 percent of the collective endowment assets.  80% of the 1.4 billion in grants originates from donor advised funds.   Almost 60% of that amount originates from donor advised funds.  These funds not permanent endowments but essentially philanthropic accounts which allow a donor or family to participate in giving and with the collaboration of federation (in this case) distribute all or more than the income generated.  They have been treated as endowments by our system for reporting purposes with our permanent funds but have significant differences in operation and mission.  During my last year on the job we determined to change the branding of our 2014 Annual Endowment survey to recognize this crucial difference. 

 When a former JFNA National Annual Campaign chair asked me “So what are we doing with all this money (alluding to the billions invested by our system )?” I had to remind him about the true nature of our asset base, the positive side of which is that grants from the donor advised funds make up approximately 20% of our Annual campaign revenue, although some communities informally report up to 30 or even 50% of their annual campaign contributions coming from this source (and various supporting organizations held within the system as well).  I call this complex revenue stream which emerges from the donor advised funds a virtual endowment for the system

Jewish federation endowments have a bifurcated asset base – the donor advised funds and all of the remaining types of permanent funds which have been contributed by generous donors since the turn of the last century.  While the federation system would treasure an endowment allocation like that of many universities (with substantially more permanent funds) in reality when it comes to endowment we are faced with a situation in which the vast bulk of these assets can only be termed “semi permanent” or even transitory.  The most important permanent endowment in the federation  system which we have tried to build over a period of over 20 years, the Permanent Annual Campaign endowment (PACE) has been marginally successful, serving to attract largely older donors, or those with a deeply engrained commitment to unrestricted giving to the annual campaign.  Every recent piece on giving over many years points to the desire by the younger generation to give with a focus (see recent publications from the Johnson Center at Grand Valley State University at and 21/64 formerly of the Bronfman Philanthropies).  Women’s giving for endowment purposes in the system is focused on the Lion of Judah Endowment (LOJE), a highly marketed and successful form of giving which has tended to be topped out at $100,000 per donor because of the unique dynamics of giving and leadership in the system, which chose in the early years of the program to encourage endowing a gift of $100,000 rather than the entire (and frequently much larger) gift to the annual campaign.  Both PACE and LOJE focus on the totality of the annual campaign and therefore require a donor who is confident and desirous of supporting the mission and vision of the entire annual campaign as opposed to a particular project or activity.

Given the nature of our donor base and fund development in the system it should be no surprise that we have major communities with only 1% of their annual campaigns endowed but very large supporting  organizations pouring enormous sums into charitable activity of infinite variety but focusing in many other places beside the Annual campaign. 

In the next piece we will focus harder on permanent giving rather than donor advised funds and some expectations for endowment development and its impact on federation capacity to meet needs and some development suggestions for the professional.


Click here to read the second part of this article