Coronavirus effect: Dire squeeze for our nonprofits

Some 38,000 people work at Jewish community centers across North America, staffing preschools, camps, gyms, classes, activities for seniors and more. Because of the coronavirus crisis, a lot of them are going to lose their jobs.

“The cuts are going to be painful and deep,” said Doron Krakow, CEO of the JCC Association of North America.

“They are going to go into what I would call a hunker-down mode, which means that they’ll be subject to the kind of staff reductions that we are reading about affecting other industries.”

When the crisis ends, Krakow said, “The institutions themselves will be smaller, lesser versions of themselves operationally.”

In other words: It’s going to be bad.

That’s the message leaders across the Jewish organizational world are sending as the scope of the coronavirus-induced financial crisis becomes clearer. In addition to having health concerns surrounding COVID-19, Jewish nonprofits are anticipating layoffs, downsizing and closures during the economic downturn that will most likely deepen over the course of the virus scare.

And even as Jewish philanthropic leaders work to shore up short-term funding, the longer-term prospects for Jewish organizations, as for so many others, appear increasingly bleak.

“If you go to a zero-revenue model for an undetermined amount of months, even the strongest of institutions is going to be challenged,” said Eric Fingerhut, CEO of the Jewish Federations of North America, the umbrella organization for a $3 billion Jewish philanthropic network that employs some 10,000 people.

“This is literally hitting every single institution in every single community,” he said. “Every synagogue, every JCC, every camp, every human service agency, every, every, every.”

JCCs across the country are closed for social distancing. As 80 percent of their revenue comes from fees that clients pay for services, they are making almost no money. Thus, Krakow said, people like personal trainers, preschool teachers and — depending on the time frame — camp counselors are going to be laid off.

Krakow said the other 20 percent of JCC income comes largely from donors and foundations. As these funders see their stock portfolios dip and endowments shrink, they may donate less to institutions that need money now more than ever.

Jewish cultural institutions are hurting, too. The Tenement Museum, which tells the stories of Jewish and other immigrants on Manhattan’s Lower East Side, shrunk last week from a staff of 68 full-time and 70 part-time employees to a core group of just five who are still receiving full-time pay. Everyone else has either been laid off, had their hours cut or is not receiving salary.

The museum had 282,000 visitors in the last fiscal year. Now it’s closed until at least March 31 — and likely far longer.

Its president, Morris Vogel, says he draws optimism from the stories of immigrants who survived the 1918 flu epidemic, as well as an 1892 quarantine of residents on the Lower East Side.

“They took enormous risks, they displayed extraordinary bravery,” he said. “We can’t fail in our obligation to keep their stories alive. In doing so we find hope to which we can lay claim in moments that are as unknowable to us as the Lower East Side was to folks who came from the Polish shtetl.”

The Jewish Funders Network, which convenes large donors and foundations, has called on funders to increase or maintain their giving — something that CEO Andres Spokoiny said did not always happen after the 2008 financial crisis. The network got 18 foundations to commit publicly to paying out grants for conferences or programs that have been canceled. But Spokoiny said uncertainty about what lies ahead makes long-term planning difficult.

“Crises have a domino effect,” he said. “When somebody has no money, they can’t pay for synagogue membership or JCC membership or day school tuition.”

But philanthropies, particularly ones with large cash reserves, also have an obligation to use whatever money they have to help people impacted by the crisis, said Lila Corwin Berman, an American Jewish history professor at Temple University who is an expert in American Jewish philanthropy. During the Great Depression, she said, Jewish nonprofits pulled out all the stops — even at the risk of going broke — to help their constituents.

“I’m worried that this is going to make philanthropic organizations feel like they need to be really tight-fisted when I actually think it’s the opposite,” she said.

In the face of lost service fees and a potential decline in donations, Jewish nonprofits are joining others in looking to the federal government for help. A letter signed by dozens of nonprofits across the country requests that $60 billion in government stimulus funds be set aside to shore up the country’s nonprofit sector. A bill that would provide some of that stimulus funding was working its way through the Senate this week.

The nonprofits are asking as well for increased access to emergency loans and requesting that taxpayers be allowed to deduct a larger share of their philanthropic donations from their taxable income.

“America’s charities are frontline responders providing food, shelter, medical services and other critical services to those in need in their communities,” the letter reads. “Without dramatic and immediate financial and programmatic backstop from government, America’s charitable nonprofits and the people we serve face a precipitous decline in mission services at a time when our efforts are needed like never before by the most vulnerable in our communities.”

Even as they face down an uncertain future themselves, many Jewish organizations are also trying to respond to the crisis in real time. The Tenement Museum is providing its curricula on immigrants free to the New York City Department of Education, which has switched to online learning.

“We hope and intend to help when the world reopens,” Fingerhut said.