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Tucsonans join in guarded optimism at Jewish funders’ gathering

As more than 200 major funders of Jewish nonprofits gathered here last month, signs of the economic carnage of the past 18 months appeared to be waning.

The funders were in Phoenix for the annual conference of the Jewish Funders Network, held April 11-13 at the Arizona Biltmore Hotel. The meeting was accompanied by a general sense that the financial markets had stabilized and, with them, charitable giving.

There were other signs at the Biltmore that the darkest of days for nonprofits may be over. According to JFN’s polling, 33 percent of participants said they would increase their giving to Jewish causes this year, while 61 percent said they haven’t reduced giving to Jewish causes over the past year.

The Jewish Community Foundation of Southern Arizona sent 11 members representing its funders’ committee — the largest community delegation in attendance at the conference.

“I credit JFN with creating a natural synergy between donors and the Jewish community foundations in partnership with Jewish federations, where the people are,” says Carol Karsch, JCF executive director. “We’re the troops. We provide information to prospective funders.”

Karsch was intrigued by a session on the concept of “spending down.”

“There are large private foundations that have been doing wonderful spending for many years,” she says. “Take the corpus of [that same] principle and spend the same amount over a shorter period of time, not for example, 5 percent over so many years.”

Tucsonan Myron Rottenstein, chair of the local funders’ committee, attended a session on Israel’s pioneering role in reducing reliance on traditional energy sources. The Israel Strategic Alternative Energy Foundation, a supporting foundation at the San Francisco Jewish Community Endowment Fund, “hasn’t been around long but they already have a Nobel laureate on board” in addition to receiving proposals from Israel’s major universities, says Rottenstein.

“It’s a great idea. I believe in alternative energy. Not only does it benefit the world, but this is a win-win situation for Israel to be at the forefront,” he says. “And they’re doing it with only a fraction of the resources that we have.”

Although Tucson participants were enthusiastic, there was plenty of concern that more Jewish nonprofits may be at risk of collapse. For some of the major players in the Jewish nonprofit world, last year was disappointing and there is fear that this year could be just as bad — or worse.

Phyllis Cook, a philanthropic guru who advises a number of the country’s largest givers, said this year may be “tougher and more painful.” Nonprofits have seen a 20-30 percent decrease in funds, she estimated. And there is still work to be done making up for years of misspent charitable dollars.

Jeff Solomon, the president of the Andrea and Charles Bronfman Family Foundation, said that money set aside for charity is akin to discretionary money, and thus spending it is largely tied to confidence in the economy. Now that the economy is bouncing back, many at the lower end of the large donor spectrum — those who give between $25,000 and $100,000 — are feeling more confident than they have since the recession began.

But on the spectrum’s high end, those who have seen foundations with hundreds of millions of dollars take huge hits are by and large not going to increase their allocations over the next year, Solomon predicted. In fact, he said, the Council on Foundations predicted that foundations will not reach their 2007 levels of giving — their peak before the recession — until about 2017.

Despite the lingering concerns, the mood at the conference was far more optimistic than last year, when the Jewish world’s major donors — those who give anywhere from $25,000 to upwards of $25 million per year — gathered in St. Petersburg, Fla., just weeks after Wall Street saw the bottom of the recession, and just months after Bernard Madoff admitted to bilking billions from investors.

One of the country’s largest Jewish foundations — the Jim Joseph Foundation, worth about $800 million — tried to inspire other mega donors to step forward with emergency funding by making available an $11 million emergency gift to help five communities deal with the high cost of Jewish education. A year later, the foundation’s president and CEO, Chip Edelsberg, said there had been only “modest response” to its laying down of the philanthropic gauntlet.

“There is a bundle of money out there sitting on the sidelines,” Edelsberg said. “The market just had the best first quarter it has had in 10 years, there are signs of recovery, and there has been a recuperation of funds. It is an empirical fact. And the conventional wisdom is that foundations might have recovered a significant portion of what they lost.”

In the meantime, organizations are suffering.

Last month, a Jewish day school in Memphis closed. Not long ago, the Jewish Federation of the Silicon Valley had to collateralize a $1.2 million loan to keep open another day school.

In his annual address, JFN President Mark Charendoff pushed donors to free up money, perhaps through loans rather than grants.

“At this moment, $550 billion is sitting in private foundations in America and yet we are using only 5 percent of it,” he said. “We need to figure out how to change this equation. How can we get the other 95 percent of our money working for us?”

AJP Assistant Editor Sheila Wilensky contributed to this article.