Does the collapse this week of Bear Stearns, with its long history of strong philanthropic ties to UJA-Federation of New York, mark the beginning of a major tailspin affecting Jewish charities?
Voicing concerns that parallel worries over the impact of the Bear Stearns’ buyout on the market in general, Jewish officials say it is too early to assess the impact but recognize that the coming period will be marked by uncertainty and belt-tightening.
For two decades Alan “Ace” Greenberg, the storied former chairman of Bear Stearns, has been one of the great supporters of the local federation, and philanthropy in general, encouraging his employees to donate 4 percent of their salaries to good causes.
Each October, Greenberg has hosted the major kick-off of UJA-Federation’s annual campaign in his Upper East Side apartment, surrounded by six-and seven-figure donors.
Last fall, the single evening netted a record-breaking $41 million for the federation. In addition, “each year the partners of Bear Stearns contributed many millions of dollars to UJA-Federation,” said John Ruskay, the CEO and executive vice president of New York’s federation, in an interview this week.
After last week’s bargain-basement buyout of their troubled company, it’s not clear whether those who donated will be in such a position again.
A widening circle of shakeups of financial services companies is leaving Jewish New Yorkers — who arguably make up a disproportionate number of the people working in the sector — worrying about the impact on their income.
And those involved with Jewish non-profits wonder how deeply the problems will cut into charities’ ability to fund a wide variety of needy causes.
Jews working in financial sectors “are a big part of the New York not-for-profit world,” said Mark Charendoff, president of the Jewish Funders Network, a membership organization of about 900 foundations and wealthy individuals.
“Will Jewish not-for-profits take more of a hit than cultural institutions or the arts community will take? I don’t think so. Will the New York not-for-profit community take more of a hit than others? Yes, I think it will, but the New York community has also had a good run over the last 10 years or more of benefiting from that wealth. I would hope they’ve used those good times to solidify their base and can weather the storm.”
The anxiety, however, is mounting.
“Almost all of our members are in finance, and people are very uncertain,” said Felicia Herman, executive director of Natan. Natan is a network of 45 Jews, most in their 30s, who donate at least $15,000 a year each to innovative Jewish projects. Last year it distributed $1 million among 30 small Jewish non-profits.
“Of course everybody’s waiting to see what happens, and people will be more anxious and I think more reluctant to donate, but it’s so up and down, how can you know?” Herman said that most of Natan’s members make their donations in a lump sum before the end of the year, so she can’t yet tell if the current market malfunctions will make an impact.
When non-profit executives now appeal to her for support, “they say that they’re not even really bothering to talk to people on Wall Street right now because people are very distracted and anxious,” Herman said.
Among Charendoff’s constituents, “while our members are nervous, they’re still pressing forward in thinking about their philanthropy as an on going concern and not something they’re putting on hold.”
Those most vulnerable to feeling hard hit by the market turmoil, among philanthropic Jews, are the youngest.
“There’s a lot of uncertainty for people in that age range because they haven’t built any wealth as a cushion yet and are lowest on the totem poll,” said Natan’s Herman.
“We have young clients in investment banking or hedge fund worlds who are pushing off decisions about major grants that they would otherwise be inclined to make now,” said Charendoff. “Those are the exceptions, not the rule. But for a not-for-profit looking for that money, it doesn’t matter that they’re the exception.”
Several established Jewish non-profit groups said, however, that they are seeing increases — not cuts — in donations.
“We’re actually having the best year in our history,” said Daniel Forman, Yeshiva University’s vice-president for institutional advancement. YU expects to bring in $90 million in cash by the end of its fiscal year in June, he said. “Right now we’re at $73 million,” which was the total of last year’s total annual campaign, he said.
There has been an increase of $500,000 each year recently and Forman said he doesn’t expect that to change.
“If and when we pick up signals that some individuals may not be able to make new gifts, we’ll defer discussions until a later time, but that’s been few and far between.
“We take ‘no’ as ‘not yet.’ But if a board member lost his job yesterday at Bear Stearns, we wouldn’t be approaching him for a donation.”
Donations to the Union for Reform Judaism are also up over a year ago, said Rabbi Lennard Thal, senior vice president and until recently its director of development. “So far it hasn’t had an impact. It’s hard to be a prophet, though,” he said.
The URJ, which has 897 congregations as members, has a $30 million annual budget. Other than the financial needs that follow natural disasters, fiscal problems are generally felt at URJ about a year after they hit a region, Rabbi Thal said. Roughly 85 percent of the group’s budget comes from synagogue dues, which are based on a congregation’s budget from the previous year.
“Our projection based on historic patterns is that we’ll be just fine this year and probably next as well,” said Thal. “If the economy continues to be troubled, the impact will likely be felt a year from now, and impact the budget planning for the organization’s following fiscal year. “
Despite the rocky shoals on which New York financial markets have been struggling, there are always people who benefit from an economic downturn.
“A lot of these are expert financial people who will be successful no matter where they land.
For every industry that goes down, another industry profits by it,” said Paul Kane, senior vice president for financial resource development at UJA-Federation. Its annual campaign is currently up $5 million over where it was a year ago at this time.
“Even on Wall Street some people shorted the sub-primes and did well. In a time of trouble, bankruptcy lawyers will do well. We’re beginning to think about those type of strategies” for fundraising, Kane said.