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January 25, 2002/12 Shevat 5762, Vol. 54, No. 19
Jewish foundation to go independent
BARRY COHEN
Editor
Phoenix's Jewish Community Foundation has gotten the OK to become an independent, nonprofit organization.
On Jan. 22, the board of directors of the Jewish Federation of Greater Phoenix voted to grant the foundation permission to file for charitable 501(c)3 status as the Jewish Community Foundation of Greater Phoenix.
Since federation created the foundation in 1972, it has been operating as a federation entity and has procured $37 million in assets, including a range of funds, trusts, insurance policies and gifts.
The foundation now will become an independent organization but will remain at its current location in the federation building, 32 W. Coolidge, Phoenix.
When the Ina Levine Jewish Community Campus opens in the fall, the foundation will move to the campus in office space next to federation, said Mark Sklar, foundation chairman.
According to the federation Web site, www.jewishphoenix.org, foundation allocations help to fund federation constituent agencies, local non-federation Jewish organizations and general social service community programming.
Proponents for a separate foundation argued that an independent status would attract more donors.
"Over the years many (prospective) donors ... have been reluctant to put their assets into the Jewish Community Foundation because they are nervous about the uses that the federation ... might make of the funds," Neal Kurn, past chairman of the foundation, told fellow board members at the Tuesday meeting.
Another concern is protecting foundation assets from federation liabilities. Sklar explained in a phone interview that if "something bad happens" during a federation-sponsored event - a camp activity, a program in Israel or an event at the future community campus - foundation assets might be vulnerable in a legal settlement so long as the foundation is "an entity owned and controlled by federation."
Ted Zinman, federation treasurer, said at the board meeting it is in the best interest of the foundation to separate from the federation to keep its assets "as isolated as possible from (legal) attack."
Gary Grove, federation executive committee member, challenged concerns about protecting foundation assets.
"Not one penny has ever gone from any endowment fund, anywhere, to any plaintiff in any lawsuit, despite many decades of endowment funds," he argued.
Bob Karatz, foundation board member, said another advantage of having an independent foundation is reaching out to the thousands of members of the Jewish community who have never contributed to a Jewish organization.
"I believe there are thousands of people who would be more attracted to the foundation if it is an unaffiliated organization," he explained.
In addition, some synagogues that in the past have "been unwilling to deposit their funds at federation," might take interest in becoming donors, Kurn said.
A concern raised at the meeting was whether an independent foundation would compete with federation for community funds.
Federation President Lanny Lahr said there would be no competition because of the differing nature of federation and foundation needs.
"Federation is looking for immediate dollars (to deal with) immediate needs," he said. Foundation gifts represent a long-term investment. Some gifts are given during the donors' lifetimes, and some after they have died, he explained.
Howard Cabot, co-chairman with his wife Vicki of the federation 2002 annual campaign, said federation and foundation contributions are complementary, not competitive. He noted a need to communicate distinctions and similarities between federation and foundation gifts.
Following a nearly unanimous vote to approve the foundation's independence, Art Paikowsky, federation executive vice president, stressed there would be "ongoing integration" between federation and the foundation.
"I think the word 'separation,' implies something that is not intended," he said.
Though the foundation will be an independent organization, federation members will have input about who serves on the foundation board, and federation representatives will be part of the foundation allocations process, voicing the needs of local and overseas communities, Paikowsky said.
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