Lehigh Valley Jewish Foundation December 2023

DECEMBER 2023

Unprecedented News Brings Unprecedented Needs

By Julia Umansky JFLV Director of Gift Planning and EITC On October 7, 2023, a holy day of the Jewish calendar, the world watched as Israel suffered a horrendous attack.

Without warning, Hamas terrorists infiltrated the country and began targeting innocent Israeli citizens in southern communities close to Gaza. It is now more than two month since the news broke of these unspeakable acts and now, more than ever, it is important that we show our support to our Israeli brothers and sisters and continue to condemn Hamas’ actions.

Upon hearing the news from Israel, the Jewish community here in the Lehigh Valley sprang into action to support Israel and its people. Within a few days, The Jewish Federation of the Lehigh Valley, along with Jewish communities across America, launched an Emergency Campaign for Israel and held a prayer vigil for peace and to honor the victims of the recent attacks.

All funds raised from the Emergency Campaign will go directly the current relief efforts; in just over two month our community has raised over $700,000.00 while Jewish Federations of North America have surpassed their initial $500 million goal.

If you are a donor in the community looking to help, you can contribute to the campaign in a variety of ways: 1. Donate directly to the Emergency Campaign at www.jewishlehighvalley.org/swords-of-iron 2. If you have a fund with the Foundation that generates an amount for grant distributions each year,

you can direct your yearly grant amount to the Federation’s Emergency Campaign.

3. If you have a Donor Advised Fund with the Foundation, you may direct a grant recommendation to the Federation’s Emergency Campaign.

Now more than ever it is important for us to stand together as a community and the Jewish Federation is here to support those efforts. Please do not hesitate to contact us at 610-821-5500 if you have any questions about how you can help.

Why Endowments Matter More often than not, we cannot predict when a crisis will occur and what resources it will take to address the issue. For communities without endowment funds, once a crisis occurs, it is too late to create a fund and community needs may overwhelm available resources. For communities with an endowment fund, the fund provides a safety net for the organization or community; in many of our most challenging and unpredictable crises, it is the endowment, and not operating resources, that provides immediate and essential emergency assistance.

We are grateful here in the Lehigh Valley to have an endowment fund valued at approximately $40 million and even luckier with the returns our fund has seen. Endowment fund assets may increase through wise investing and spending policies that restrict what may be distributed from the fund annually. Our own fund saw immense, and sustained, growth after a strategy change around five years ago. When

COVID-19 hit in 2020, the endowment fund provided support for programs and resources that may have otherwise suffered; we now find ourselves in a time of crisis and are grateful for the insightful planning of our previous leaders in establishing a community endowment fund.

There is no greater time than now to contribute to an existing fund or establish a new one with the Lehigh Valley Jewish Foundation. Donors who make contributions before the end of the year will be eligible for 2023 tax benefits and will certainly help with our sustained efforts to support and care for the Jewish community here, and around the world.

Please contact Julia Umansky at julia@ jflv.org or 610-821-5500 to discuss planned gifts and how you can make your lasting impression and legacy for years to come.

ISRAEL NEEDS YOU: OPERATION SWORDS OF IRON

SCAN QR CODE OR VISIT THE LINK BELOW TO LEARN MORE!

www.jewishlehighvalley.org /swords-of-iron

Our Focused Investment Strategy Continues to Deliver Best-in-Class Returns

By Lewis Gaines Investment Committee Chair Too many endowments don’t try to exceed the performance of their peers. While this may be surprising, it makes sense once you understand their main objectives, namely: match the performance of broad measures of the equity and debt markets, and keep pace with peer institutions that pursue similar mandates.

As a result of peer chasing instead of focusing on expenses and returns, the portfolios of most endowments look strikingly similar. By copying the standard, highly diversified strategy and paying similar (too high) fees, many endowments fall short of or, if they manage their fees better, match the broad market performance. Their investment returns also match their peers who follow the same strategy.

While most Jewish Foundations do not publish their investment returns, the ones that do so have very similar portfolio structures and long-term results. The typical growth and income funds in most foundations have lots of foreign stocks and also a large allocation to smaller companies. The long-term results from five major Jewish Foundations closely mimic the performance of the Morningstar Moderate Allocation Index. This index is designed to match the portfolios of most endowments, and in fact it does. If you want to keep score, it is a very useful tool.

The Lehigh Valley Federation has chosen a different path. While the Lehigh Valley Jewish Foundation maintains a typical stock/bond allocation of 68/32%, it has a strategic focus on: 1) large-cap domestic equities (S&P 500 index), 2) low-cost passive index funds and 3) the lowest advisory fees in the industry. Our focus on the S&P large-cap index was a deliberate choice that we made five years ago. We recognized that their global economic reach makes large-cap domestic equities an excellent proxy for foreign stocks without the high costs incurred in investing overseas. In addition, our total fee structure of 0.32% is much lower than the typical 0.6-0.8% paid by others. That seemingly small fee difference saves the foundation more than $100,000 per year.

For the last five years, we have delivered results that greatly exceed our peers. The major reasons for the outperformance are: 1) the avoidance of foreign stocks, which have performed poorly for over 10 years, 2) the S&P 500 large-stock focus, which has outperformed smaller U.S. companies and 3) over $600,000 in fee savings. Our five-year return improvement of 3.1% annually is highly unusual for a moderate allocation strategy. See our annual and benchmark returns as of September 30, 2022 in figure 1.

Since 2009, foundation assets have grown from $25.1 million to $38.3 million. The baseline growth of $6.3 million represents the return of the typical foundation (mimicked by the Moderate Allocating Index). The strategic improvement of $5 million is the extra return generated by our focused investment strategy.

Because assets have grown and long-term returns are well above our historic distribution rates, the foundation has been able to increase ongoing distributions. These distributions support the Federation and the community organizations that receive allocated funds. In addition, many organizations have also chosen to invest their own endowment assets (totaling about $16 million) with the Federation. As a result of the high returns, they have increased their financial flexibility as well.

While short-term movements in the stock and bond markets are disconcerting, the foundation’s portfolio structure has shown long-term historical returns of around 9%. We continue to work closely with Goldman Sachs to test our strategic assumptions and are prepared to make changes if needed.

Figure 1

Figure 2

Where There’s a Will, There’s a Way

By Mike Miller Endowment Chair A bequest is simply giving or leaving something by will. Do you have a will? A will is important because if you do not designate who will inherit your property, the state will determine that for you. The state will often provide results differing from your wishes. A will can also simplify the probate process for your survivors.

You can direct how your assets will be distributed and make specific bequests to individuals and charitable organizations such as the Lehigh Valley Jewish Foundation (LVJF). Many do not want to face their mortality, but a better mindsight is planning for life.

Past generations have nurtured and sustained our Jewish community and helped it become what it is today.

Now it is our turn. What legacy will you leave? Have you thought about how you would like to be remembered? If you have, perhaps your thoughts have centered on ways you can leave an enduring legacy that

reflects how you helped others and the good you have achieved during life. A charitable bequest is one of the easiest ways to support our community and make a strong legacy statement. To quote the Grinspoon Foundation: “Legacy giving is the most egalitarian form of giving.” A bequest to LVJF makes it possible for everyone, no matter their current financial situation, to make a gift that is meaningful to them. The gift goes into the LVJF Endowment Fund, is invested in a diversified investment portfolio, and provides annual distributions of income in perpetuity.

Your bequest can be any dollar amount, a specific asset (such as securities, retirement assets, or real estate), a percentage of your estate, or the residue of your estate. Because bequests are revocable gifts, they do not jeopardize the donor’s standard of living or ability to meet future needs.

Bequests of all sizes are important sources of support for LVJF and there are many ways to make a bequest. The Federation is happy to discuss all your bequest options with you, and your attorney can recommend which best suits your individual circumstances. The donor could specify that the bequest be used for general purposes or to establish a named fund for a specific program or purpose decided upon in advance in consultation with a qualified LVJF staff person. It is possible to create in your will certain

What are some options for planning my future?

A Will - A will is a written document that permits you to state how you want your property or estate distributed, name an executor (also called a personal representative) to distribute your property, pay debts and taxes, and handle other business affairs to settle your estate.

Living Trust - If you own property, you may wish to set up a living trust.

A living trust may be set up during life and directs where your assets go.

Unlike a will, a trust will not subject your estate to probate, which is often

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a lengthy and costly process that requires a court to settle your estate.

Who will be the guardian of my dependent children? Your child is considered a minor in most states until he or she reaches age 18. It is important to appoint a guardian, so that if you pass away, the guardian may take physical custody of and care for your minor children.

Who will have the power to manage my finances? If you are no longer able to manage your property or later wish to have someone else manage your property, a durable power of attorney will give the person you select the legal authority to buy, sell, and manage your property.

Who will make my healthcare decisions? A durable power of attorney for healthcare allows you to select a person who can assist your doctors in making healthcare decisions if you become unable to act on your own behalf.

gift arrangements which provide income for a family member before the LVJF would benefit. The designation of LVJF as a beneficiary of retirement assets may be a good choice of assets to bequest, because distributions from traditional retirement accounts would likely be taxable as ordinary income to individual beneficiaries but not to LVJF.

You have completed a will and perhaps a revocable living trust. Your durable power of attorney for healthcare and a living will are in place. All of your records are safely in place and carefully organized.

So you now are finished with your estate planning. Or are you? Will there be changes in your circumstances or your family that should lead to a review of your plan? Could some events cause you to need to revise or update the plan?

Yes, there are a number of reasons to consider revising or updating your plan. These include any of the following reasons:

Ten Reasons to Update Your Estate Plan New Children,

1. Grandchildren or Other Heirs

to a Different 2. Move State or Purchase of a 3. Sale Major Asset

4. Reaching Age 73 5. Your Selected Beneficiary is Deceased

6. Divorce or Remarriage Change 7. Substantial in Value Adding a Major

8. Property to a Living Trust

Selected Executor or

9. Trustee Not Available 10. Passage of Time

Lion of Judah Endowment: Tama Fogelman

Tama Fogelman.

In 2014, Tama Fogelman (z”l) came to the Jewish Federation of the Lehigh Valley with a goal in mind: to set up a Lion of Judah Endowment Fund that would continue to support the Federation’s annual campaign even when Tama was no longer with us.

Tama had been an active donor with the Jewish Federation since the early nineties and officially became a Lion

of Judah in 1995; with her established LOJE Fund, she will remain a Lion in perpetuity and continue to support the community she was raised in and loved so much.

Tama’s involvement in the Lehigh Valley Jewish Community knew no bounds during her lifetime. After moving from Northampton to Allentown once she was married, Tama and her family made themselves part of the whole community. While Tama and her husband, Jules (z”l), were married at Temple Beth El, they ended up attending Beth El, Keneseth Israel, and Sons of Israel during their time in Allentown; much of the decision for which synagogue they were attending was based on where each one of their children wanted to go. In a 2016 interview with Muhlenberg College, Tama recounts that she and Jules (z”l) “felt very comfortable joining other [synagogues]” especially because they were “friendly with different people of different beliefs in Judaism.”

Tama gave back throughout her life

and was an active volunteer with the Jewish Community. Tama volunteered for Hadassah, Jewish Family Service, and the Institute for Jewish Christian Understanding. We are extremely grateful to Tama for the support throughout her life and the forethought she had to establish her LOJE which will help the Jewish Federation and the Lehigh Valley Jewish Community remain strong now and into the future and keep Tama’s memory alive.

Endowing a Lion of Judah ensures that your philanthropy makes an even greater difference throughout your lifetime and for generations to come.

Women are proving stronger than ever and are making more philanthropic impacts than ever before.

If you are a Lion of Judah, Pomegranate, or are interested in how you can become involved with Women’s Philanthropy, please contact Julia Umansky at the Federation office at 610-821-5500 or julia@jflv.org.

The Lion of Judah Endowment

Compassion. Strength. Leadership. A deep commitment to the Jewish community. You are a woman who embodies all of these values. You are a Lion of Judah. Your work helps support, sustain, and build Jewish life — across the street and around the world.

Endowing your Lion of Judah ensures that your philanthropy makes an even greater difference throughout your lifetime and for generations to come.

FOREVER STARTS TODAY There’s no denying we live in an uncertain world. However, women are proving stronger than ever.

And as a LOJE, you are shaping the Jewish future.

When you create a Lion of Judah Endowment (LOJE), you establish a charitable gift of at least $100,000 in your name. This endowment is designed to provide ongoing support of Federation and the causes most important to you. Your attorney or financial advisor can advise you on the best endowment vehicle for you. The most popular ways to create a LOJE include: 1) A charitable gift of bequest can be made in your will or living trust, 2) a retirement fund that names Federation as the beneficiary of all or part of the fund, 3) and a Life insurance policy.

KEEP THE FLAME ALIVE A LOJE lights the way for your family and community. Helping to illuminate Jewish life well into the future. Burning bright for all who are in need.