August 3, 2017; Forward
The Minnesota Council of Nonprofits, in its 2014 Principles and Practices for Nonprofit Excellence, advised, “Nonprofits should regularly and openly convey information to the public about their mission, activities, finances, accomplishments and decision-making processes.” According to a recent article in Forward, this minimal requirement for good nonprofit governance has set too high a bar for the leadership of the Jewish National Fund (JNF) to leap.
The American JNF was established as part of a 100-year-old effort to lay a foundation for the creation of the nation of Israel. Funds raised in the United States were for the work done by its Israeli partner. From the outside, they appeared as one and the same organization, unchanged over time.
For most American Jews, the two groups are indistinguishable, sharing a name and a history. The American JNF never announced publicly that it had essentially stopped sending money to the Israeli group. It continues to claim the legacy of the Israeli JNF, stating on the side of the latest edition of its blue charity boxes, on the history page of its own website and even in its tax filings that it was founded in 1901—the year the group that became the Israeli JNF was founded. The American JNF was not set up until the 1920s.
In fact, it has changed dramatically; no more than one percent of the funds JNF in the U.S. raises now ends up with its Israel-based namesake. Once an organization that raised funds directed by its Israeli “parent,” the American JNF now raises funds for projects it directly selects and oversees. (If it sounds like you’ve heard this story before, refresh your memory of the story of Aish International, which we covered in June.) This is a significant strategic change that might be of interest to donors, yet the leadership of JNF has chosen to keep it quite hidden. According to the Forward,
A spokesman for the American JNF, Adam Brill, would not acknowledge any change in the relationship between the two groups. He said that two organizations have “been separate entities since 1926,” but he would not respond to questions about the near-cessation of funding for the Israeli JNF.
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“Eighty-one percent of JNF-USA’s funds are spent on programs and projects, the majority of which is earmarked by our donors for the specific projects they want to support,” Brill wrote. “While we work closely with KKL-JNF in Israel, we have full confidence in our Board, and the many members in lay leadership roles, as the best financial stewards of their donor dollars.”
Why would the JNF in the United States choose to operate more autonomously? It appears rooted in control issues between the two organizations, who had different ideas about how the monies collected should be spent. At a moment of needed organizational restructuring, a new president, philanthropist Ronald Lauder, and a new board took control. Alon Tal, a professor at Tel Aviv University who served on the board of the Israeli JNF for over a decade, told the Forward that Lauder “brought on a lot of heavy hitters and people who had not been involved with JNF. Their attitude was different.”
While previous generations of American JNF leadership had been happy to fork over checks to the Israeli JNF without asking questions, Lauder and his allies wanted control over the projects they funded. A former member of the board of the American JNF, James Schiller, said that his group had been frustrated by the slow pace of the Israeli organization’s work. ‘It wasn’t responsive to our donors. That’s when [the American JNF] started to branch out and do things more on their own.
While there was friction between the American and Israeli JNF organizations, they appear to have agreed to keep the dispute as private as possible, as money continued to be raised and it ended up supporting projects within Israel. In 2008, they reached a deal “with the two sides agreeing that the American JNF could continue to use the name ‘Jewish National Fund’ and the blue charity boxes, even if it was raising some money for other causes.”
If the goal of the U.S. JNF leadership was to make a strategic change but protect its fundraising abilities by making it hard to see, they have been remarkably successful. By 2015, their net assets exceeded $300 million and they reported total revenue of more than $200 million. They have been able to give those donors who wish autonomy what they wanted while retaining the commitment of those who give to JNF based on its historic relationship to JNF-Israel.
However, is that good enough reason for nonprofit leaders to hide important information? Does such success give nonprofit leaders a right to operate their organizations as if they are closely held, private businesses? It will be interesting to see what kind of response this new revelation will mean for the organization’s base of support.—Martin Levine