Pressure is on for Jewish organizations to merge
NEW YORK The recent cancellation of a major Jewish educational conference is the latest sign that the Jewish nonprofit world will shrink in coming months as some organizations move closer to extinction and others seek mergers.
Over the past year, the faltering economy and tight fundraising dollars have forced several Jewish institutions to cede their independence and fold into larger organizations.
Recent months have seen an open push for Jewish institutions to consider how they can work together to streamline an organizational world that apparently has become too robust to fund.
But the announcement earlier this month that the Coalition for the Advancement of Jewish Education was canceling its annual conference and seeking ways to fold its programming into another existing Jewish organization could serve as a wake-up call that more such moves are on the way.
In some ways, the CAJE closure is a big flashing red light of warning to other Jewish not-for-profits who should be looking for combination because if you wait too long, there may be nothing left to combine, Jeffrey Solomon, the president of the Andrea and Charles Bronfman Foundation, told JTA.
The Jewish nonprofit world went through a dramatic change over the past two decades, moving away from a model that was funded primarily by a centralized Jewish federation system to more of a free-market system that was funded increasingly in large part by private philanthropists working on their own accord.
The free-market system created several layers of fat and overlap that could have been streamlined along the way but must be trimmed now, according to Jonathan Sarna, the Joseph H. & Belle R. Braun professor of American Jewish at Brandeis University and the author of American Judaism.
Hard times will promote consolidation, Sarna said.
Initially there will be great sorrow at the loss of this organization or that organization, but if we do it right, we will find that we are leaner and meaner.
We will see significant efficiencies produced by this kind of downsizing.
Though no one is unsympathetic to the people losing their jobs who have also done important work, when looked at from the Jewish community as a whole, there is a sense that we expanded a bit too rapidly and far too many organizations came into existence.
This expansion bubble already has started to deflate, as some organizations have cut pre-emptively to make sure that despite any fundraising woes, at least their core mission would be carried out.
The Baltimore Hebrew University announced that it would become part of Towson State University, and the Philadelphia Jewish Archive Center said it would shut down in 2009 and its collection would become part of Temple Universitys archive.
But the closing of CAJE, Sarna said, is perhaps the perfect example of what happens when an organization runs its course and does not adapt quickly enough.
When it was started some 35 years ago, CAJE essentially was a platform for young innovative Jewish educators to share what then were avant-garde ideas about Jewish education that were being given short shrift by the establishment.
As CAJE aged, Sarna said, it went from a cutting-edge innovator to more of an establishment organization in the world of supplementary Hebrew schools.
Meanwhile, a new crop of organizations emerged that included, among others, the Partnership for Jewish Education and RAVSAK: The Jewish Community Day School Network, as well as a resurgent Jewish Educational Services of North America.
Sarna said, it is clear that we are going to see a consolidation in the world of Jewish education. With JESNA and PEJE so much better funded, it is not surprising that CAJE has to shut its doors. And it would be a mistake to say, What a terrible setback for Jewish education.
The call for more mergers in the broader Jewish nonprofit world has become louder of late.
Presenters at a symposium on nonprofits and the economy sponsored by the Samuel Bronfman Foundation and Natan, an organization that helps young funders find innovative projects, encouraged those in attendance to consider whether their organizations could merge.
When the Jewish Funders Network met in December to discuss how to deal with the fallout from the huge losses taken by nonprofits in the Bernard Madoff scandal, it proposed coming up with a list of organizations open to merger to save the community money.
When the Orthodox Union convened the leaders of dozens of Jewish day schools, organizers pushed schools to consider how they could potentially consolidate parts of their course offerings, perhaps creating regional Advanced Placement courses run by several schools together instead of each school paying to run small classes on their own.
Most Jewish professionals and funders are loath now to publicly name organizations that they think should merge, but the American Jewish Congress is an easy example of a potential casualty of the financial crisis, those interviewed told JTA.
The AJCongress, which lost $21 million of its $24 million endowment in Madoffs Ponzi scheme, has long been discussed as an organization whose mission defending civil rights and advocacy for Jewish social causes overlaps with several other organizations, including the larger, better funded and similarly named American Jewish Committee.
AJCongress had been relying on its endowment to produce about 25% of its annual operating budget.
Rather than organizations scrambling for resources and competing for dollars, they should come together and say, How do we work together? Simon Greer, the CEO and president of Jewish Funds for Justice, told JTA.
Greers organization is actually the combination of three organizations that have come together since 2006: the Shefa Fund, Jewish Fund for Justice and Spark.
Greer said that he has had discussions with at least a half dozen other organizations since November about possibly working strategically together.
Dana Raucher, the executive director of the Samuel Bronfman Foundation says that mergers are not the cure-all solution and are, in fact, quite difficult to pull off and can only be successful when the cultures of two organizations align.
The Jewish community should look at this as an opportunity, albeit a painful one, according to the head of Natan, Felicia Herman.
The financial crisis is a reversal in the way that we have been living for the past 20 to 25 years, she said. That was based largely on fiction, a bubble of a lot of debt and credit. Now that that has gone away, there is an opportunity to restructure everything.
Hadassah Restructures, lays off a quarter of its staff
Meanwhile, Hadassah, the womens zionist organization of America has instituted massive layoffs.
The organization began the process last week of laying off 80 employees across the country, roughly a quarter of its national staff, a spokesman for the organization confirmed. The cuts are coming at all levels of the organization.
Hadassah recently announced that it had in total $40 million invested in Bernard Madoffs Ponzi scam, as well as another $50 million the organization thought it had made in the scam.
It was a significant hit to its endowment, which now stands at $412 million.
The layoffs, however, were not solely caused by the Madoff losses. The organization had been discussing streamlining for nearly two years. The downturn in the stock market and the Madoff losses accelerated the process, the spokesman confirmed.
Last September, the organization hired McKinsey and Co. to help implement a strategic restructuring plan, the preliminary components of which were approved by Hadassahs executive committee the week before the Madoff scandal broke, Hadassah President Nancy Falchuk said in a letter to her board in December.
That restructuring plan, which included massive layoffs, was intended initially to be implemented over 18 months.
The Madoff scandal turned it into a 30-day plan, said a former Hadassah employee who was notified that he was laid off on Jan. 14.
Employees were notified starting Jan. 13 that they were being let go immediately.
The employees were given two months pay, as well as two weeks pay for every year they worked at Hadassah, the source said.
This was a painful and difficult step for us, Hadassahs national president, Nancy Falchuk, said in a statement regarding the layoffs.
Staff reduction is among a number of measures our organization has been taking and planning this past year as part of an overall restructuring plan to decrease expenses and to protect our core mission of supporting Israel and strengthening the Jewish people through our projects.
This reduction was accelerated by the ongoing downturn of the current economic environment.
Hadassah felt the need to review and reduce its administrative costs. Hadassah has always been able to count on a talented and committed staff.
We are grateful for the dedicated service provided by outgoing staff members and wish them well.
Hadassah remains strong as an organization, focused on the future and actively committed to supporting its pacesetting programs in medical care and research, education and youth institutions in Israel.
