Jewish federations passed through three distinct historical stages. The first federation, the Boston Federation of Jewish Charities (established in 1895), was an association of volunteers that linked philanthropic institutions with Jewish social services. The purpose was joint fundraising, with a centralized budget. This model was adopted by federations in other communities around the country over the next half-century.
Before too long, an allocations function was added to the federation, as federation leaders began making decisions about where the money ought to go.
Over time, the growth and increasing complexity of the community brought a third stage of federation development. Today, federations are responsible for communal and social planning and for the coordination of social services—child welfare, services for the aged, family services, employment and guidance—in addition to fundraising and allocations.
This concentration of functions gives the federations and their leadership considerable power, to the point where federation is recognized as the Jewish “address” in a community.

Jerome A. Chanes, A Primer on the American Jewish Community, 3rd Ed. (New York: American Jewish Committee, 2008), 14.

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