NEW YORK The board of the American Jewish Joint Distribution Committee went into its meetings last week with some difficult decisions to make about its budget. Now, those inside the $300 million international aid organization say, the tough work will happen over the next two months.
The JDC is facing significant cuts an estimated $31 million according to the proposed budget for 2010 that was placed in front of the board Oct. 25-26 at the Helmsley Hotel in midtown Manhattan.
For months the organization has tried to figure out how to cope with declining allocations from the North American federation system, which JDC estimates will drop from $37 million in 2009 to $34 million in 2010, and perhaps lower.
Though a $3 million decrease from the federations may seem like a drop in the bucket for an organization that still aims to spend $300 million next year, JDC officials say the money it receives from the federations is its most important funding.
The federation money is used to cover the organizations core budget, providing JDC with the flexibility to fill gaps.
More important, JDC says it leverages the federation money to help raise funds for designated donations for specific projects and secure government grants in the countries in which the organization operates.
In Israel, an JDC official estimated, each dollar spent from the federations translates into an added $8 in private and government funding.
According to a copy of the proposed budget obtained by JTA, the organization is aiming to cut its spending in the former Soviet Union from $113 million to $111 million and in Israel from $148 million to $130 million.
It is looking to cut from $30 million to $27 million in Central Europe, and from $11.8 million to $10.2 million in Latin America.
The system is very itchy now and jittery because everybody knows that in Israel and the FSU there will be cuts, one insider said. You dont want people to start looking for new jobs if they dont have to.
JDCs regional directors throughout the world have been tasked with identifying cuts a process that wont be easy. The organization has contractual obligations to outside funders. Also, any decision to cut significantly from a program could help close the budget gap in the short term but end up burning important bridges over the long term.
You may save $500,000 in core money, but you kill a program and lose credibility, said one insider.
JDC officials have continued to be tight-lipped about their suggestions to regional directors about which specific programs should be cut. But the director of the operations in the former Soviet Union was directed not to cancel feeding hungry Jews, instead cancel an identity project.
The board meeting featured some heated talk about how JDC should approach the federations and their umbrella organization.
Some JDC board members seemingly were ready to get out the pitchforks and torches. But most likely the organization will opt for a more cooperative approach, working with Jewish federations to better sell JDCs story to local donors and launch some sort of special campaign.
The JDC also is talking about how far it can dip into its $100 million endowment to close some of its budget gap.
That could be tricky.
The organization uses the endowment as collateral each year to take out tens of millions of short-term, low-interest loans to pay its expenses while it waits to receive its allocations from the federations.
