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Birthright Faces The Chopping Block

Birthright Faces The Chopping Block

There will be 17,000 fewer young people accepted to the Birthright Israel program in 2009 as the organization slashes its budget by $35 million due to increased costs, an unfavorable exchange rate and a decline in fundraising, according to the president of its foundation, Jay Golan.

“Our budget this year was $110 million and it will be $75 million in 2009,” he said. “That will mean we will take 25,000 [participants] worldwide in 2009 compared to 42,000 in 2008.”

About 80 percent of the 25,000 will be from North America.

Birthright Israel offers free 10-day trips to Israel for all Jewish young adults 18-26 who have neither traveled to Israel before on a peer educational trip nor lived there past the age of 12.

Golan said a decrease in funding alone was responsible for cutting 11,000 participants. Its largest benefactor, Sheldon Adelson, chief executive of the Las Vegas Sands Corp., cut his contribution to the organization to $30 million over the next two years; he had contributed about $67 million in the last two years.

Adelson, who was once said to be the third-richest man in the U.S. based on his Las Vegas Sands holdings, saw his net worth decline by $4 billion last month because of the slumping economy. A year ago, his net worth had been estimated at $28 billion.

The State of Israel, private philanthropists and Jewish communities around the world are the primary financial supporters of Birthright Israel, which operates in 52 countries and has taken 191,000 young adults to Israel since it started in January 2000. But because of the anticipated worldwide recession, Golan said fundraising efforts would soon be broadened to reach the entire Jewish community.

Although the State of Israel contributed about $20 million to the group this year, Gideon Mark, the organization’s international CEO, said he anticipates the contribution next year would be about $17 million. Because Israel now has an interim government until elections Feb. 10, the government has been slow to make a commitment for next year.

Mark pointed out that the number of this year’s participants was higher than normal because of a challenge grant by Adelson of nearly $7 million. Golan said that figure has nearly been “matched by several individuals as well as North American Jewish communities and by the [Israeli] government itself. We expect it will have been matched by the end of December.”

In addition to an anticipated drop in contributions, Golan pointed out that costs have gone up as the value of the dollar has declined.

“We have hit the same perfect storm that many have hit,” he said. “A $2,600 contribution used to cover everything that was in the trip. This year, the price was $3,000; we lost 20 percent in purchasing power. If we were to have 40,000 participants, we would have to work harder just to stay in place.”

The economic downturn comes at a time when Birthright Israel has become a “proven winner in the community,” Golan observed. “The critical thing about Birthright is that there is a real difference in the lifelong Jewish identity of those who go on the trip and those who don’t. We are almost uniquely successful in engaging people who haven’t had a positive, enduring Jewish experience to date. That is an argument for taking people now and not allowing a wait list to build up.”

Golan said the organization is now trying to build on its success by “trying to ramp up additional support now that we have 191,000 alumni. Birthright should become a national priority for Jewish life, and there are a number of funding sources that are eager to see what can be done to [make it] a national priority.”

Adelson himself agreed with that assessment when he issued a statement in September announcing his 2009 and 2010 gifts of $20 million and $10 million respectively. He said the organization has “proven to be the best vehicle we have to strengthen the Jewish community and our people’s connection with the State of Israel. We are honored to have helped Birthright Israel establish a track record of effectiveness on an unprecedented scale, and we look forward to its continued success.”

In reflecting on its success, Golan pointed out that the “heart and soul of most major institutions in the Jewish world follows the 80-20 rule — 80 percent of the money comes from 20 percent of the people. Birthright, like many Jewish institutions, had tremendous philanthropic support, and it was started by those at the apex of their giving period. We now need to broaden [the donor base] and to make it a national priority. We’re accelerating the outreach to parents and alumni interested in becoming sustaining givers, and we’re ramping up our mail approaches and starting outreach” through the use of social networking Web sites like Facebook.

“We want to get more local and regional in the way we talk to parents and alumni,” he said.

Asked if there were plans to open support chapters in the U.S., Golan replied: “Our people respond more to social networks than to formal chapters. The demographic we are dealing with is more like those who supported [Sen. Barack] Obama in the way they worked with each other and leveraged each other. We are working with those who cut their eyeteeth on political campaigns in what we are doing.”

Birthright has no money in reserve, preferring to spend whatever it raises.

“We are not the type of organization that has built up an endowment, because we regard it as more prudent to try to develop lifelong Jewish identity than we do to have a conservative financial structure,” Golan explained. “We have to cut trip numbers when necessary. But our aim is to make sure that our trip participants can go when they want to go.”

Nevertheless, Birthright expects to have only enough money to take 10,500 young adults to Israel from December through March, Golan said, even though it received refundable trip deposits from 17,000 of them. Those not selected for the winter trip will be given one-day advance notice of the summer trip registration. But Golan noted that not more than 50 percent of young people reapply.

“Applying is a spur of the moment thing,” he said. “Maybe a cousin is going this year or a person has time to go before law school. So being responsive to them when they are interested is the urgency that infuses our fundraising and our planning.”
Mark added that Israel has proven to be the “main bridge for Jewish identity, and we believe American Jews will be able to keep this bridge solid.”

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