UJA-Fed. Launches $300 Million Effort For Day Schools

Los Angeles, which has the second largest Jewish federation after New York’s, has just announced a similar $100 million campaign.

The moves come as the idea of "superfund" endowments for day schools seems to be gaining steam as the best way to help middle-class parents afford day school tuition, which has doubled in the last 10 years, according to studies, while middle-class income has remained stagnant.

"Endowment fundraising is the last frontier. It’s the hardest thing to do, very long term and doesn’t happen overnight," said Kim Hirsch, who was hired as a development officer at the federation in Metro-West, N.J., specifically to fundraise for the community’s Jewish day schools. "But if done right, it can be the underpinning of success."

MetroWest is hoping to raise $50 million as an endowment for its day schools.

New York is still in the initial stages of its campaign, but the challenge fund spells out that UJA-Federation of New York will raise $100 million from individual donors and foundations to match funds raised by New York area day schools up to $200 million, for a total of $300 million.

Alisa Rubin Kurshan, vice president for strategic planning and organizational resources at UJA-Federation of New York, explained that individual schools can raise up to $6 million each, and with the 1:2 match will then receive an additional $3 million. Each school will then have access to 5 percent of the money annually, for up to $450,000, which can go to fund scholarships and other non-capital needs.

"If we can incentivize through a match, we really believe this would be a great thing for Jewish life," said Kurshan. "UJA-Federation of New York recognizes that we have the largest day school community in North America and that we have major [responsibility] toward reaching day school affordability."

Both Kurshan and John Ruskay, UJA-Federation’s executive vice president and CEO, said this project was conceptualized years ago, and that they are reaching out to longtime donors along with exploring new contributors. And though the current economic climate does little to help fundraising potential, the annual cost of day schools in New York is thought to be about $1.5 billion, making affordability a pressing and vital need.

"This is a massive economic challenge," said Ruskay, who added that the New York metropolitan area has more than 250 day schools, enrolling some 125,000 students. "In a way, the moment seemed more promising before, when financial winds were at our back, but the need remains. We cannot promise success, but we’re certainly rolling up our sleeves and seeking partners."

One challenge for federations is that a significant percentage of donors do not want their contributions going to day schools, believing that the financial burden should be carried by day school families.

The United Jewish Communities of MetroWest is widely acknowledged to be a leader in establishing endowments, with a $50 million campaign begun in 2006 for the area’s three Jewish day schools. Hirsch was hired away from one of the schools to work for the federation specifically on fundraising, and said that it’s time Jewish schools follow the model secular private schools and universities have established to keep themselves from squeezing out the middle classes.

To date MetroWest has raised $20 million from more than 100 donors for its campaign, but even that hefty sum "doesn’t come close" to solving the problems of the three schools in the area, according to Hirsch.

In her fundraising, she focuses not just on large-scale donations but also legacy giving, encouraging people with long relationships to schools to bequeath money in their wills or leave insurance policies or other types of long-term gifts.

Other communities across the country have created their own endowment programs:

Chicago has a Jewish Day School Guaranty Trust to benefit its 16 federation-supported schools, and has distributed $1.7 million this year, according to Rabbi Josh Elkin, executive director of the Partnership for Excellence in Jewish Education, a national organization based in Boston. Rabbi Elkin also mentioned that Baltimore has a $15 million matching campaign, and that other communities are setting up similar efforts.

"The common denominator is people recognize that in order to thrive and grow, day schools being worthy of investment will have to have these additional resources to continue to make them as accessible as possible," said Rabbi Elkin.

In Los Angeles, the just-launched $100 million campaign is being seeded by challenge grants from the Jim Joseph Foundation and the Simha and Sara Lainer Family Foundation.

Gil Graff, executive director of the Board of Jewish Education in Los Angeles, said the area’s 36 day schools will be expected to raise $80 million and the 1:4 matching grants will provide an additional $20 million. The project is starting with five schools, which will get a communal match of $4.25 million against $17 million they raise themselves.

"There’s no doubt that a revenue stream from endowed funds is an important element in helping sustain day schools in the long term," said Graff.

"Part of the hope is that not only will $100 million be raised, but as each day school develops and promotes the notion of its endowments to the benefit of students in the school, there will be a culture of endowment that will build on itself," he added. "It’s the kind of thing where if you don’t start, you never start."

Miriam Prum Hess, director of day school operations in Los Angeles, said she has seen families who used to be donors now having to apply for financial aid, an indication that the superfund comes not a moment too soon. She said the community’s long-term goal is to raise the $100 million over six years, and that eventually she hopes every day school in the area will benefit from the fund.

"It is essential that our schools develop endowments," she said. "I believe it’s only through endowments that schools will guarantee their future viability."

While many Jewish communal workers are excited about the increasing professionalism endowment funds might bring to day schools, some observers said ambitious plans to begin multimillion-dollar endowments might be beneficial only for a privileged segment of the community, leaving others behind.

Marvin Schick, an educational consultant for the Avi Chai Foundation, said the great majority of New York area Jewish schools serve the haredi population, which doesn’t tend to do sophisticated fundraising.

"There’s no question that this [challenge fund] is inspired by good intentions, but there’s no question that it would mean overwhelmingly that schools and yeshivas in the New York metro area will not benefit," said Schick. "The whole philanthropic world is geared to feed the rich; significant gifts go to people or institutions that already receive significant gifts."

He said most schools will not manage to raise the $6 million maximum, and objected that money raised must be turned over to UJA-Federation to hold rather than being retained by the schools themselves. He also said that even those schools that raise $1 million will not earn sufficient interest yearly to offset the costs of sending already overextended development people to "Fundraising University," sponsored by UJA-Federation and PEJE to teach fundraisers how to be more effective.

"This program has advantages because you create a better prospect for raising money than you would without it," said Schick, but "I think the results will be far less than [UJA-] Federation wants."

Because the annual payout of an endowment is, by definition, a small percentage of the total corpus of money raised, endowments will not solve the immediate demands — such as skyrocketing scholarship requests — that day schools face.

In addition, the recent economic crisis has highlighted not only dire financial needs of Jewish schools but also exposed a potential pitfall of endowments: their vulnerability to plummeting investment values and, if managed poorly, fraud. The endowments of two local day schools, Ramaz and SAR, were among the many Jewish victims in the Bernard Madoff Ponzi scheme.

Kim Hirsch from MetroWest still believes that endowment fundraising, which has only really taken root in the last five years, is the key to the future of Jewish day schools.

"There’s a recognition that if we don’t do something big in the day school world, [and raise] billions nationally, the whole day school movement is going to implode because families just can’t afford it," she said.

"Day schools engender tremendous passion and commitment, they’re in a stronger position than almost any other institution in the Jewish community for endowment funds because they touch lives, people create friendships in kindergarten and they’re still friends 30 years later," said Hirsch. "$100 million is just a start, but it would be a good start."