Philanthropy

November 19, 2008

Perfect storm for charities— contributions go down and requests go up

By Brad A. Greenberg

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Something needed to be done. Something maybe only God could do. So the leaders of Israel's largest seminaries designated Nov. 13 a day of prayer for Jewish philanthropists -- "a united effort to storm the gates of heaven and plead for the financial health of Jewish philanthropists, so that they can continue to support Torah institutions in Israel."

No one has gone unscathed by the convulsions of the global economy. Even the wealthy are losing money -- and if they cut their charitable giving, it is likely to ripple across the Jewish nonprofit sector.

Birthright Israel appears to be an early victim.

The charity, which sends Jews between the ages of 18 and 26 on all-expenses-paid 10-day pilgrimages to the Jewish state, had a sugar daddy in casino mogul Sheldon Adelson, who gave a combined $60 million in 2006 and 2007 -- about a third of the program's operating budget. Since October 2007, the value of Adelson's company, Las Vegas Sands, has plummeted from a stock price of $138 to just above $5 on Nov. 12. Adelson personally has lost more than $30 billion.

Not coincidentally, Birthright announced this month that it is slashing its budget by $35 million, down from $110 million. Next year, the organization plans to send only 25,000 young Jews to Israel, compared with 42,000 this year.

A weak -- though improving -- dollar has added to the decline in funds for organizations doing work overseas. The Jewish Agency for Israel, for example, announced last month that it would cut $45 million, or about 15 percent, of its 2009 budget. This followed the slashing in June of 60 jobs at the American Joint Distribution Committee (JDC), which was facing a $60 million budget deficit, and cuts in May of 32 jobs and $3.2 million in expenses at the United Jewish Communities, the umbrella organization for North American federations.

In past years, nonprofits have been expanding programs and operational budgets. Now leaders are worrying about how to maintain revenues and evaluating where they can cut corners, save on staff or draw back services.

Many local Jewish organizations say that so far donations are still on pace with last year -- but the last six weeks of the year typically account for a huge chunk, in some cases 20 percent, of the annual campaign. And these are tough times to be asking for money.

"People are looking at their wealth, their incomes, their holdings, and they are concerned. But it is sort of like gazing into a crystal ball," said John Fishel, president of the Jewish Federation of Greater Los Angeles. "We've had very, very good results on our phone squads. We've had very few people who said no. These are smaller donors; that makes us cautiously optimistic that we will finish well. But 2009 remains a question mark."

Even if donations are flat, nonprofits providing social services will have to struggle to keep up with growing demand for services.

The New York Times reported recently that in the past four months demand for food aid is up 40 percent in some of the hardest hit parts of the country and 20 percent even in the cities with the strongest economies. The three Los Angeles pantries run by SOVA Community Food & Resource Program have seen an increase of about 1,000 visits each month since July. Crowds waiting outside before doors open have come to resemble Depression-era breadlines.

"I don't know what is going to happen," said Paul Castro, executive director and CEO of SOVA's parent, Jewish Family Service (JFS). "I am hoping that people will continue to make the social needs of the community a priority, but I'm not sure. People are hurting."

That much is evident from the phone calls that have flooded into JFS' centralized intake center, where two staffers are responding to 350 requests a month for assistance. Many of the cases are beyond JFS' capabilities and have to be referred to other agencies.

"Though we can help with food vouchers and through SOVA, now the requests are increasingly from people who are newly unemployed or facing eviction and of a much larger nature that we don't have the ability to answer," said Margaret Avineri, director of clinical services.

For example, 16 people called JFS in May looking for financial help. The month's requests hit 50 in October.

And because 40 percent of JFS's $27-million budget comes from the government, the organization itself needs help.

JFS cut 8 percent of its staff -- 32 positions -- after losing $700,000 in California funding when the governor's budget cuts went into effect July 1. Its citizenship program, which primarily helps immigrants from Iran and the former Soviet Union go from nationalization to full citizenship, was lined-out. Castro worries that more state cuts are coming soon, with the Legislature called in for an emergency budget session. Next to go could be in-home support services for the elderly. And talk has picked up of trickle-down cuts from local government, as well.

"I suspect the next couple of years are going to be really difficult," Castro said. "The state has backed itself into a corner where raising taxes are not the answer and cutting services are not the answer. We're stuck in the fallout of that, and it's our clients who suffer. We're going to do the best we can to break the fall for many, but we're not going to be able to prop them up in the way they need."

At the Jewish Free Loan Association, the number of loans issued between January and September increased 17 percent over that period last year, for a total of 1,130. The agency received so many requests for student loans that about two dozen were delayed until the cash was available. The hold-up was only about a month, but it was a first for the organization.

Mark Meltzer, executive director and CEO, expects to dole out as much as 50 percent more in interest-free loans this fiscal year, which ends Aug. 31, for a total of $5 million to $6 million. That means Jewish Free Loan needs to raise more money; they increased their appeal this month with direct mailers. Real challenges remain.

"We are trying to make some proposals with staff and moving ahead in to the next year as the economic condition worsens, which it seems it will do," Meltzer said. "But we are not terminating any programs. The agency is still financially solvent. But our focus right now is on emergencies."

Frida Levi and her husband, Robi, recently benefited from an emergency loan.

Robi was in between jobs as a self-employed IT consultant. Frida was on maternity leave after giving birth to their first child. Their savings were zapped, and their parents were unable to help because of their own financial struggles. The Levis had secured a new rental in Pico-Robertson, but they didn't have the money for the security deposit. Then they heard about Jewish Free Loan.

"Thank God business is doing just fine, and it was just a temporary thing, and we are back on our feet now," said Frida Levi, 29. "It was good to have the Jewish Free Loan there as a lifesaver."

Jewish social service agencies, like JFS and Jewish Free Loan, cater to the entire community -- Jew and non-Jew. Synagogues, too, provide many different services, and they have been overwhelmed by needs from within. An informal survey of 25 congregations by the Board of Rabbis of Southern California found that membership and pledges are down, while requests for dues relief and scholarship assistance are up.

"There is a prevailing sense that worse times are ahead, and some synagogues are beginning to explore cutbacks in staffing and programming," said Rabbi Mark Diamond, the board's executive vice president. "And a few rabbis confided to me that they are worried about their own jobs."

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A version of this article appeared in print.

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