Charity funding is becoming an uphill struggle

Communal charities need to find new ways of reaching donors, leadership says

By Simon Rocker, May 3, 2012
Trekkers making their way through the Sinai desert, a relatively recent way of raising funds for charity

Trekkers making their way through the Sinai desert, a relatively recent way of raising funds for charity

Jewish charity leaders will be keeping a close eye on Chancellor George Osborne. Even before a growing political backlash forced the government to reconsider its controversial proposal to cut tax relief for big donors, the Jewish Leadership Council had sounded the alarm.

Under the Chancellor's original budget proposal, someone planning to make a large gift for a capital project or to set up their own charitable foundation might well find less to put in the pot. Given that charities are a vital link in the Tories' "Big Society" - their call for social responsibility - the idea of cutting tax relief for donations "does seem an own goal," said Jewish Care chief executive Simon Morris. Only last week Community Security Trust chairman Gerald Ronson called the budget measure "a giant step in the wrong direction".

Even if it were only to make a small dent in the income of Jewish charities, it would hardly come at a worse time.

"It's getting harder and harder to fundraise," said Andrew Alexander, chief executive of One Family UK, set up 10 years ago to help terrorist victims in Israel in the wake of the second intifada and which raises around £700,000 a year. "We're having to rely a lot more on trusts and foundations than the private donor. The average donation has dropped quite considerably. Someone who would happily give £100 before is now giving £50. You have to work almost twice as hard."

Suzanne Neville, chief executive of Jewish Care Scotland, which has an annual turnover of £650,000, said: "This is going to be a very tough year. We're working very hard to maintain our services but we are having to draw on our reserves to do that."

At the same time, she added: "We are coming across more people in financial need because their benefits have been cut or they have lost their job, whom we are going to have to support. Financial problems are also causing increased anxiety, depression and mental health problems. The economy is changing the nature of what we are being asked to do."

Social service organisations which depend heavily on local authority grants face a particular challenge. "Public funding is under pressure and in real terms has declined significantly over the last five years," said Simon Morris. "Local authority income has remained flat with no allowance for inflation – [a cut of] £500,000 in two years. It doesn't look as though it is going to get any better."

On the face of it, Jewish Care has done pretty well in recent years; its voluntary income – from donations and legacies but excluding fees and council grants – rose from nearly £19 million in 2008 to over £33 million last year.

But its bumper year was due to an exceptional windfall gift. Donations which go towards revenue costs have remained static for two years and Mr Morris is concerned about a drop in legacies, to £3.3m this year, compared to nearly £7m the previous year.

Elsewhere, Israel charities appear to be finding the going harder – although their popularity can be affected by the situation in Israel. "All you would need is a third intifada to break out and there would be no problem - but of course we don't want that," said one fundraiser.

The UJIA's charitable income in 2010 was just over £13.5 million – nearly £3 million down from 2007; JNF UK's slid from over £7 million in 2009 to £5 million the following year; Magen David Adom, which had been comfortably raising over £4million annually for several years, dropped to £3 million in 2010.

Charities are also having to contend with a crowded – some would say overcrowded – marketplace. "There are more charities, more and more campaigns," said Lionel Salama, co-founder of creative agency Hype, which has done marketing and advertising for many Jewish organisations. "It makes the process of fundraising more competitive; causes have to make their case much better."

Although British Jewry may have numerically shrunk, the Charity Commission reported in 2007 that the number of Jewish charities on its books - more than 2,300 - had increased by more than a third over the previous five years. Their collective income, including fees and government grants as well as charitable gifts, amounted then to more than £700 million a year. That breaks down to nine Jewish charities per 100 British Jews - more than 30 times the proportion of charities per head in the general population.

Faced with a harsher climate, charities are having to prove more resourceful in their quest for cash. "We're exploring different ways of expanding our fundraising capacity - for example people sponsoring different aspects of what we do," said Suzanne Neville. "Last year we had a trek to Latvia and Lithuania which raised a lot more than we anticipated."

In Brighton, Ralli Hall, one of the country's few independent Jewish community centres, is keeping afloat largely through hiring its premises out. "Donations dried up a long time ago," said its chairman of 23 years, Roger Abrahams,

"We have just become more commercial about how we do things. We're doing ok – we are building a third kitchen, which will be vegetarian." Despite the hall remaining a focal point of Brighton Jewish life, membership subscriptions contribute only a few thousand pounds towards its £150,000 annual budget. "It is only £50 a couple and there's no charge for children under 18 or in full-time education," Mr Abrahams said. "But there are only 200 to 300 paying members out of a community of 5,000."

A glance at the Jewish names in the Sunday Times Rich List suggests there is still considerable money to be tapped. Dame Vivien Duffield's £25 million pledge to the new Jewish Community Centre, due to open in London next year, shows that the old philanthropic spirit is still very much alive in some quarters.

But perhaps we have been for too long over-reliant on too small a pool of donors. A survey by the Institute for Jewish Policy Research (JPR) in the mid-90s indicated that 80 per cent of Jewish donations came from just nine per cent of the population.

The donors of the future, however, may not be so willing to open their chequebooks without a second thought. Mick Davis, chairman of UJIA and the JLC, observed: "There is no doubt in my mind that the younger generation doesn't subscribe to the idea of the Jewish tax. They look at philanthropy in terms of 'do I understand the cause, do I want to support the cause, is it going to deliver the value that I think it should?' That's a much more difficult and complex sell.

"The way we go and raise our money, and the way we engage with new generations, needs to recognise that you can't expect they are simply going to write out a cheque. You've got to have a compelling proposition which they buy into."

Changes in working life also mean that even those ready to donate may not be as inclined to get stuck into charity work as previous generation. "I think 25 years ago more donors were involved in the kind of businesses which allowed them time to sit on committees," said Lionel Salama. "These days a lot of donors don't have the time or perhaps the patience for committees."

The chairman of Jewish Care, Steven Lewis, recently criticised his own generation of 40-somethings for not pulling their weight in terms of Jewish charity-giving. But it could be that some of the newer donors are opting for niche causes that have a particular appeal to them, rather than the usual big beasts in the Jewish charity field.

Rabbi Shoshana Boyd-Gelfand, director of JHub, which supports new charities, says that the internet makes it easier for would-be donors to give online rather than respond to someone else's appeals. "For the generation that has the iPhone, you have i-philanthropy," she said.

Or the newly affluent may choose to spend their charity cash outside the Jewish community. "As chairman of the UJIA, there's not much more I can do other than thank somebody," said Mick Davis. "But you give to a large institution in the UK, you might get a CBE."

Lionel Salama identifies another issue. "I think Israel's image in the UK has had, and does have, a big impact on many people's involvement in Jewish life. If you're a young person at university or work and Israel seems to be painted in a bad way, you may tend not to want to identify so publicly as part of the Jewish community, and you may retreat into the woodwork.

"And that's bad news because if you are not involved in the community, charities can't pitch to you to support their particular institution."

If younger donors seem to be more elusive than charities would like, there is concern over another critical source of income – legacies. Almost 30 Jewish charities have signed up to a cross-communal campaign, due to launch later this year, to persuade more of us to leave a bequest to a Jewish cause.

Justine Harris, the former strategic communications director of Jewish Care, who is one of the group behind the campaign, said: "According to JPR statistics, only one in four of us is leaving a legacy to a Jewish charity in their will."

A legacy does not have to be tens of thousands of pounds, she said. Every £100 or £1,000 helps. "It should be the natural thing to do if you have supported a cause all your life to wish that good work should continue".

Even if people are retaining more of their money to look after themselves in old age, she said, "very few people die without assets. Leaving a gift in your will should become the norm."

Another response is for charities to try to make their income go further by cutting overheads.

A few years ago the JLC introduced a scheme for different Jewish charities to buy services such as printing, cleaning or telephony in bulk rather than individually. It says that the resulting savings now amount to £700,000.

But Simon Morris believes there is still room for charities to reduce costs by sharing "back-office" functions. "Merger is one thing but there are other ways of working together which need to be explored. It makes sense for some coming-together of us, Nightingale, Norwood, Chai. Is there a way for the Friends of Israel organisations, like the Technion, Haifa University and the Hebrew University, to work more closely?"

But while charities try to safeguard their future, Lionel Salama believes the crying need is for a wider community plan. "Now seems a good time to think collectively about how we are going to support a community 10,20 years down the line. Do we need all these institutions – and how are we going to pay for them?

"I am not aware of a blueprint or vision for the next 20 years as to how we are going to fund all these causes, and that's quite a frightening prospect."

"How does this community remain vital, dynamic?" said Mick Davis. "Is it the number of kids educated at schools? Is it the number of rabbanim we train? Is it the quality of our health care? That's a very important key to how we think about the allocation of resources in our community."

One thing seems clear: the charity bill is likely to get bigger. Simon Morris says that if we want to maintain the current Jewish infrastructure – education, defence, Israel support, social care etc – "the community is going to need to become more supportive. I can only see the state reducing its funding. What we have done is fantastic, but if we want to keep it up at the same levels, the community is going to have to respond."

Last updated: 10:45am, June 7 2012