When a federation raises less, it spends more to raise it, and sends more of it out of town
Thirty-three American Jewish communities saw their annual campaign fall by more than a fifth over the last decade, after inflation. Two things happened inside those federations. Raising each dollar got more expensive and the organization did not get any leaner. And the money that did go out increasingly went somewhere other than the local Jewish institutions the campaign was raised for.
Who is actually losing ground?
Prices rose 32.5 percent over the decade, so a campaign had to grow by about a third in dollars just to keep its buying power. Most did not clear that bar. Of 128 communities, 94 raised more dollars at the end of the decade than at the start, yet only 71 raised more buying power. Another 23 sit in between, growing on paper while shrinking in what the money can do: Boston's campaign grew 0.6 percent in dollars and lost 23 percent of its purchasing power, and Los Angeles and Washington follow the same pattern.
The chart below ranks all 128 communities by their real change. The rust bars on the left are the 33 whose campaign fell by more than a fifth, the group this essay follows. They include college towns and small cities like Ithaca and Nashville, retirement coasts like Broward County, and three of the largest Jewish communities in America: San Francisco, Detroit and Boston.
Figure 1. A third of American Jewish communities raise less than they used to
Real change in the annual campaign, 2014 to 2016 against 2022 to 2024, each bar one community
Table view
First, what happens to the cost of raising money?
It goes up. Each row is a group of communities. The pale bar is cents spent to raise one dollar in 2014 to 2016, the solid bar the same thing in 2022 to 2024. Lower is better.
Compare the top row with the middle row.
Figure 2. Where the campaign fell, the cost of raising it rose
Cents spent on fundraising for every dollar of campaign, median community in each group
So does the organization get leaner to match?
No. This chart asks: for every $100 the campaign brings in, how much goes to running the organization itself? Salaries, rent, the annual dinner. Lower is better here too.
Look at the top row.
Figure 3. The median shrinking federation now spends more running itself than its campaign brings in
Dollars spent on everything except grants, for every $100 of campaign, median community in each group
One more measure. Of every dollar a shrinking federation spends, the share that leaves as a grant fell from 58 cents to 49. No other group got worse.
So is less money going out the door?
Here the story turns. Total grants from the 33 shrinking communities rose from $477m a year to $584m, up 22.4 percent after inflation. Grants get paid from three pockets: the annual campaign, endowment payout, and distributions from donor-advised funds. Only the first passes through an allocations committee, where a board weighs the day school against the nursing home in public. The other two pockets grew, and they answer to investment returns and to individual donors.
A shrinking federation spends as much as it ever did. What shrinks is the share that anyone votes on.
The narrowing shows up in breadth too. The median shrinking community supported 11 of the 21 grant categories at the start of the decade and 10 at the end, while the median growing community went from 12 categories to 16.
Where does the money that does go out actually go?
Increasingly, somewhere else. Every grant goes into one of two piles. Teal stays with local Jewish institutions, from day schools to elder care. Amber leaves town: the national federation system, Israel and overseas, national advocacy, environmental and civic causes.
The right pair removes Boston and San Francisco, whose donor-advised accounts skew the totals. Watch the amber block grow in both.
Figure 4. The money that leaves town grew. The money that stays did not.
Real grant dollars a year, millions, 33 communities whose campaign fell more than a fifth
The growing communities drifted the same way, just more gently, with local giving up 9 percent and out-of-town up 45. Some of that drift is national, and the size of it here is not.
Which causes, exactly?
Here are all twelve causes, ranked by how their dollars changed. Left lost, right gained. Teal is local, amber leaves town.
Read the top three bars, then the bottom two.
Figure 5. The three that fell are all local. The four that grew most all leave town.
Change in real grant dollars, 2014 to 2016 against 2022 to 2024, 33 shrinking communities
Table view
Did the growing communities make the same trade?
No, and the comparison is what turns a trend into a choice. The growing communities faced the same national currents, the same drift toward donor-advised funds, the same pull toward national causes. Where the campaign grew, elder care grew with it, up 57 percent. Where the campaign shrank, elder care took the deepest cut in the book.
Figure 6. Where the campaign grew, the safety net grew too
Change in real grant dollars to the four causes that serve people directly, 2014 to 2016 against 2022 to 2024
What does that trade look like in one pair?
Elder care and advocacy started the decade about the same size in these communities, roughly $10m a year each. They did not end it that way.
Figure 7. Ten years ago these two got the same money. Now one gets twice the other.
Real grant dollars a year, millions, 33 shrinking communities
Is the advocacy rise just Boston and San Francisco?
Mostly, yes, and the detail makes the picture bleaker rather than better. Boston's advocacy giving went from $0.9m a year to $6.3m and San Francisco's from $4.2m to $7.1m, nearly all of it donor money passing through their large donor-advised programs. Strip those two out and the other 31 shrinking communities cut advocacy and community relations from $4.5m a year to $1.7m, down 62 percent. In most places that line pays for the local Jewish community relations council, and it was cut alongside everything else.
The recipients tell the same double story. Over the decade, federations sent $233m of this category to Jewish defense and community relations bodies: the American Jewish Committee, the JCRC of New York, the Anti-Defamation League, the Secure Community Network. Another $87m went to national political organizations with no Jewish mission, led by the ACLU and its state affiliates. The first pile looks like allocations a board approved, and the second looks like donor-advised money a federation processed. The tax return does not distinguish them, which is why the category needs this much unpacking.
Where does this end?
Seventeen federations have filed the IRS schedule for dissolution or major disposition since 2014, and the filings sort into three doors. A few closed outright: Evansville, Steubenville, Merrimack Valley. More handed their assets to their own foundation arms, as Youngstown, Greensboro, New Mexico, Utah and Reading did, which keeps the endowment alive after the campaign has gone. The most common door has been merger with the local JCC into a single body, the route already taken in Orlando, Austin, Louisville, Knoxville, Tampa, Providence and Portland, Maine. The pattern reads as consolidation rather than collapse, an institution narrowing toward the funds it holds and the building it shares.
The argument in six sentences
When a Jewish federation's campaign falls, the cost of raising each remaining dollar goes up, from about 10 cents to about 15, and the organization does not shrink to fit, so the median shrinking federation now spends more running itself than the campaign brings in. Total grants keep growing anyway, because endowments and donor-advised funds keep paying out, which means the dollars governed by a communal decision fall while the dollars governed by markets and individual donors rise. The grants tilt away from the local institutions the campaign was raised for: money leaving town grew 72 percent while local giving stood still. The growing communities, facing the same national trends, held their safety net level and raised elder care 57 percent. The shrinking communities cut elder care 28 percent while their advocacy line rose, and most of that rise came from donor accounts in two cities rather than from a board's decision anywhere. The end of this road, on seventeen dissolution filings so far, has been merger and consolidation rather than outright closure.
How this was measured. From 2,335 IRS Form 990 returns filed by 265 US Jewish federations and their foundation arms, tax years 2014 to 2024, all figures deflated to 2024 dollars using CPI-U matched to each filer's own year end. A community is a federation plus its foundation arm and any merged community center in the same city. The shrinking group is the 33 communities whose real campaign fell more than 20 percent between the middle year of 2014 to 2016 and the middle year of 2022 to 2024, on both a median and a mean basis. The growing group is the 47 that rose more than 20 percent on both.
Figures 1 and 2 use federations only, excluding foundation arms, and take the median community in each group rather than the aggregate, so that two very large donor-advised operations cannot set the number for everyone. Figures 3, 4 and 5 use aggregate dollars across the group.
The stays-and-leaves split is a judgement about where a category of recipient sits, not a field on the tax return. Stays: Jewish day schools, Jewish family and social services, elder care, JCCs and camps, Hillel, synagogues. Leaves: transfers inside the federation system, Israel and overseas, advocacy and community relations, environment and animals, civic and policy causes, and transfers into donor-advised funds and other foundations. Nine further categories are genuinely mixed between local and national recipients, including higher education, hospitals, Holocaust and arts institutions and general human services; they hold 40 percent of the dollars and are left out of Figure 3 rather than guessed at. Their combined real change in the shrinking communities was minus 2.4 percent.
The obvious objection is Boston and San Francisco, whose donor-advised accounts send very large sums to national environmental and civic organizations. Those are donor decisions processed by a federation rather than allocations a board voted on, and together they are most of the amber growth in dollar terms. Removing them does not soften the finding. In the other 31 shrinking communities the local pile falls 8.4 percent and the out-of-town pile still rises 24.5 percent, so the local share drops from 52 cents to 45. Figure 4 shows both versions.
Figure 1 compares the median year of 2014 to 2016 with the median year of 2022 to 2024 for each community, and a community counts as shrinking or growing only when the mean and the median agree on the direction. The eight largest gains in that figure, from Harrisburg to Jacksonville, mostly record one-time transfers of federation assets into foundation arms and overstate real campaign growth. The advocacy split between allocated and donor-advised money is inferred from recipient identity and from its concentration in two communities; the tax return itself does not flag which grants originate in a donor-advised fund.
