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Partly Cloudy Azriel Ganz: The Jewish charities crisis
In my view
By Azriel Ganz
Issue of Jan. 30, 2009 / 5 Shevat 5769
It is clear to everyone associated with Jewish charities that revenues are already significantly down. Fewer people are paying full tuition or shul membership, and donations to other charities are generally down in both number and size. There is also little doubt that the situation is likely to get worse and will certainly not improve for a very long time, perhaps years.
So, the obvious question is: what can be done to address this reality? I think it is helpful to look at this question from two perspectives. First, what can the charitable organizations and Jewish leaders do to address the diminishing revenues and, second, how should we, as donors, react?
This essay will address the first question. I hope to address the second in a future column.
Strategic Focus
Before implementing any cost cutting or other remedial measures, it is important for every charitable organization to engage in a “cheshbon hanefesh,” sort of an internal soul searching. (This is something organizations should be doing all the time; the need to do in difficult times is even more acute).
They should be asking themselves: What is our mission? Do we have a strategic plan for the next few years? How do we adjust it to account for current circumstances (e.g., does our capital expansion plan still work in this environment)? Are we sticking to our core mission and strategic plan or have we veered off course? What are we doing well and, conversely, what are we not doing as well? Are our investment strategies sound? Are our governance policies sound? Are there things that others do better than us? Are there opportunities for strategic alliances? If an organization doesn’t think about these issues before acting, it is likely to make inconsistent, scattershot decisions rather than thoughtful, strategic ones, and, consequently squander its resources.
Cost-Cutting
Like all corporations in down times, charitable organizations must make painful decisions about the use of their resources. Each organization must determine where and how it can cut costs. What programs can (or must) be discontinued? Which jobs can be discontinued or combined? Can they re-negotiate important contracts or find cheaper vendor solutions? While these steps are important for all companies, they are especially crucial for charitable organizations which are funded with our tzedakah dollars.
Transparency
In difficult times (and especially after the Madoff scandal), many donors will want to know that their contributions are being used wisely, and that a high percentage of an organization’s revenues are being used to fulfill its core mission (rather than for administrative expenses). To attract continuing donations, in addition to ensuring that, in fact, they are using funds efficiently and prudently, it is important for charitable organizations to let their donors know how careful they are with tzedakah money.
Strategic Alliances
Last week I was approached by a meshulach (messenger collecting charity) purporting to represent the interests of the besieged Jews of Sderot. The problem is, one week earlier, I was approached by another meshulach who also represented the interests of the Jews of Sderot. Even assuming that they are both on the up and up, this example highlights an issue that we all seem to confront on a daily basis. There are so many charities that seem to be doing the exact same things. There appears to be so much overlap. Why is this necessary? Wouldn’t we be better off if organizations with similar core missions would get together and create economies of scale? Isn’t this redundancy a waste of money that we cannot afford, especially in times like these?
The problem of redundancy is perhaps the hardest nut to crack, since the leaders of the many different organizations are often loath to give up their independence. This issue will only be addressed when community and other prominent leaders use their clout to broker alliances between like organizations.
The steps I’ve outlined should be standard operating procedure for all charitable organizations during good times and bad. However, during our current economic struggles, they may make the difference between survival and failure.
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