Merger of Jewish Groups Fails to Meet Expectations, Report Finds

Five years ago, three major Jewish groups folded themselves into a new organization that became the 20th century’s largest nonprofit merger.

A new report by two independent scholars says that the organization created out of the merger, United Jewish Communities, has failed to live up to expectations or meet many of the goals it was established to achieve.

The report, “Predictability to Chaos?: How Jewish Leaders Reinvented Their National Communal System,” was written by Gerald Bubis and Steven Windmueller, who are both scholars at the School of Communal Service at Hebrew Union College-Jewish Institute of Religion, in Los Angeles.

At a time when many organizations of all kinds are considering mergers, the report offers guidance about what makes a merger successful. What is clear, says Mr. Windmueller, who is director of the school, is that “mergers are all about trust.” He adds: “They’re all about effective communication, all about keeping the eye on the prize, on the mission and the vision, and about answering the question of how to carefully unpack different institutional cultures to make sure we are fully aware of potential pitfalls when we bring together players and organizations.”

Goals of Alliance

The authors spent a year interviewing 88 people who were involved in the organizations that merged. Those organizations were three well-established Jewish groups: the Council of Jewish Federations, United Israel Appeal, and United Jewish Appeal.

The goal of the merger was to streamline fund raising and allow the Jewish federations to exert more influence over donations that they raised for Israeli causes, the report says. The United Jewish Communities network of 155 Jewish federations in North America is a fund-raising powerhouse. The federations took in $821-million in their 2004 annual campaigns, up from $770-million in 2003, the organization says.

The money raised by the federations supports a wide range of social-service programs in the United States, Israel, and other countries.

Another of the merger’s goals was to find new and creative ways to capitalize on the “desire for innovation” among many Jewish philanthropists, which, according to the report, has failed to happen in a system that remains entrenched in its old ways of doing things.

“The end result was a new organization which met few if anyone’s expectations,” the report says. “Serious questions remain regarding its status.”

United Jewish Communities’ first years have been marked by “unclear expectations, unshared visions, mixed motivations, and multi-layered power games,” said the authors in their 98-page report.

Howard Rieger, who took over as chief executive officer of United Jewish Communities in September, says he does not agree with everything in the report. But, he says, “it’s always good to step back and look where things have been because the examination, the introspective side of us, usually gets left in the dust somewhere.”

In the report, Mr. Bubis and Mr. Windmueller say one reason for the failure of the merger to meet expectations is that United Jewish Communities — like many nonprofit groups — has been quick to adopt many of the approaches commonly used in business.

“The corporate model is driven in a top-down fashion in similar ways to the American business model, which removes opportunity for there to be discourse and debate,” says Mr. Windmueller. “Increasingly, nonprofits started adopting it because it allows professional leadership to manage the agenda.”

The authors also say the business influence could be seen in United Jewish Communities’ decision to hire outside consulting firms to help with the merger, even though the consultants did not necessarily understand the cultures of the organizations that were joining forces.

“Many believe these outside companies were forced upon the participants by a small group of highly well-intentioned Jewish donors,” the report says. “Instead of focusing on the underlying issues of change, the consultants directed the process on how to develop an ‘acceptable’ new organization.

“In the name of consensus, organizational cultures and styles were never adequately discussed,” it continues. “The major lesson learned is not to apply business principles in their totality to the not-for-profit world.”

While the authors argue that too much business thinking caused problems for the merger, they say the absence of business-style marketing savvy led to a major blunder when it came to developing a name for the new organization. They say that choosing a new name — United Jewish Communities — was a mistake, given that many people knew the name United Jewish Appeal and regarded it as synonymous with raising money for the needy in Israel.

One of the report’s recommendations is that United Jewish Communities restructure the federation system into something akin to a franchise, similar to Big Brothers Big Sisters of America.

That organization shares uniformity across the chapters in the logo and marketing materials, according to the report’s authors. The national organization steers potential volunteers to chapters in and around their hometowns and holds its chapters to fund-raising and other standards.

Mr. Rieger dismissed that concept. “We’re not Wendy’s or McDonald’s,” he says. “There’s an issue of individual autonomy. I don’t think anyone nationally should think they own the Phoenix or Pittsburgh or wherever Jewish federations.”

As of March 21, copies of the report will be available for $20 apiece, plus postage and handling, from the Center for Jewish Studies, Baltimore Hebrew University, 5800 Park Heights Avenue, Baltimore, Md. 21215; (410) 664-5222; cjcs@worldnet.att.net.