Jewish Services in Crisis (part 1): As Public Funds Dry Up, Agencies Face Tough Choices

It was a blustery December night when officials of the Philadelphia Zoo placed an emergency call for help to the Jewish Family and Children’s Service of Greater Philadelphia after a fire ravaged the primate house and killed 23 of its beloved occupants.

The JFCS responded immediately, sending social workers to provide bereavement counseling for zoo workers who were entitled to the service as part of their employee benefits plan.

As an agency affiliated with the Jewish Federation of Greater Philadelphia, the JFCS far more typically provides counseling and other social services to a client base that is 85 percent to 90 percent Jewish.

The nonsectarian contract with the zoo, however, reflects the new political and fiscal climate in which this federation agency and countless others – in Philadelphia and across the country – find themselves.

Money from the Philadelphia federation accounts for only 27 percent of the JFCS’ annual $7.5 million budget, while 46 percent comes from government funds.

The budget-balancing stalemate in the nation’s capital leaves unclear the depth of cuts in store for programs for the needy. Indeed, the role of the government in human social services is already shaping up to be a major issue in this year’s election campaign.

But while the numbers are not yet known, the nonprofit world is likely to be transformed by what looms as the biggest shake-up in federal social policy in decades.

And federations across the country, whose historic mission has been to take care of the needy through a network of local Jewish human service agencies, are girding for the changes.

For those on the frontline, those changes are likely to result in tough choices, a hunt for new sources of revenue and even, perhaps, a redefined mission.

Despite the conventional wisdom that “Jews take care of their own,” the federation system is heavily dependent on public money.

jewish communal agencies receive more than $3.67 billion from federal, state and local governments, or at least 56 percent of their budgets, according to figures provided by the Council of Jewish Federations. That compares to an average of roughly 35 percent in government funding for social service agencies nationwide.

Gerald Bubis, founding director of the School of Jewish Communal Services of Hebrew Union College in Los Angeles, projects that the net effect of the cuts on the federation world will be triage. “If you suddenly pull the plug on [funding] sources which were predictable,” he said, there is a “crisis in the making.” Grappling with competing priorities

At a time of flat local fund-raising campaigns, bruising battles are a certainty as communities determine allocations to three competing priorities – local human services, Jewish continuity and Israel and other overseas needs.

“It will not be just a battle over programmatic priorities, but a struggle about values,” said Joel Karp, senior vice president of community services and government relations of the Jewish Federation of Metropolitan Chicago.

“Without a doubt,” he said, “we’re going to see a huge debate over the next couple of years all over the country in Jewish communities about what it is we’re doing with the resources we have to make a difference in meeting basic needs.”

“Our priority will be to try to minimize harm to the most vulnerable population, Jews and non-Jews alike,” said Karp, but the situation will force what he called “impossible choices.”

At the heart of the changes facing the nonprofit world are the shrinking of the government’s safety net for the needy and what some are terming the “devolution revolution,” the decentralization of the powers of the federal government.

Already, the changes made by the 104th Congress “have no parallel in the century of American history except perhaps the New Deal,” said Diana Aviv, director of the Washington office of CJF.

Under a newly decentralized system, hundreds of federal social programs would be consolidated into massive block grants and sent to the states to divvy up, Aviv said. Uncertainty prevails

While the debate rages in Congress, federation officials are left trying to plan for the future with no concrete numbers with which to work.

“The greatest overwhelming feeling is uncertainty,” said Barry Shrage, president of the Combined Jewish Philanthropies of Greater Boston.

“There is no way of knowing” how what is happening at the federal level will be translated into particular programs at the state level, he said. “But the overall impact, everyone believes, will be much more serious” than the social policy changes during the Reagan years.

Aviv and others at the CJF have been trying to make sense of the budget debate for federations and galvanize them to adapt to new ways of doing business.

Federations are being urged to forge new alliances with state and local politicians to ensure that the money that remains available continues to flow where it is needed.

As Shrage put it: “We have to shape policy, not just react,” and not “just to enhance our system, but for the greater good.”

For example, Eleanor Stone, the executive director of the Association of Jewish Federations of New Jersey, has been trying to prepare her state’s legislators for the changes so that they will make funding decisions that minimize harm to the most vulnerable populations.

Under the new rules of the game, states may no longer be bound by the federal eligibility requirements now governing welfare programs. Instead, they will be able to turn the needy away when their block grants run out. Defining needs, shifting priorities

Joan Strauss, the associate director of community planning for the CJF, has been encouraging federations to “start thinking through their options” and define what services, in an era of shrinking resources, are most important for them to provide.

The goal must be “to maximize the service to people in need and if that means looking at different ways to organize and provide services, we have an obligation to do so,” she said.

Karp said the harsh climate of need would force a gradual but substantial shift in the federations’ missions.

The changes in the wider world “will damage first the people with the least power and the greatest need – children and poor people,” he said, adding that “federations will be forced back to basic services around food and shelter.”

The re-evaluation process is a difficult task, especially without actual budget figures with which to work.

“Where do we begin to attempt to fill the gaps or say [a program] is beyond the Jewish community’s capacity and put it out of business because of an expectation of a cutback?” said Howard Charish, executive vice president of the Jewish Federation of Greater Philadelphia.

At the same time, he said, there is no time to waste. “We don’t have the luxury of being overwhelmed. We have to stay as much ahead in planning as possible.”

Some of the agencies belonging to the federation “family” actually may receive as little as a single-digit percent of their budgets from federation allocations.

Most of the rest comes from public funding, the vast majority of which is funneled from Medicare and Medicaid to Jewish hospitals and nursing homes, which serve the elderly, the needy and disabled.

About 55 percent of funding for Jewish hospitals comes from government sources. For nursing homes, it is 76 percent and for Jewish family service agencies, 61 percent.

Other public funds to Jewish-sponsored programs go mostly to Jewish refugee resettlement, job training, nutrition and housing for the poor elderly. No way to make up lost funding

At a time of flat federation campaigns nationwide, there is virtually no way that federations can make up the anticipated cuts of between 15 percent and 35 percent in some of theses programs, officials say.

In San Francisco, for example, 12 agencies received $21 million in public funds in the last fiscal year and $16 million from the local campaign and endowment.

In Chicago, excluding Mount Sinai Hospital, federation agencies spent more than $77 million for social service programs in which government was a partner. That partner provided almost $21 million – or 27 percent – of the resources used by federation agencies.

In Los Angeles and elsewhere, Bubis said, the community will have to shift its resources to reckon with a “huge demographic transformation” that includes more elderly, more single parents who need some support, more unemployed and more of those deemed to be “at economic risk,” including Jewish homeless. Seeking news to stay afloat

As federations face a gut-wrenching examination of the services they support, they will also have to determine which are driven by core Jewish values of communal responsibility for the needy and which are less essential.

In the process, they may opt to stop funding some of their agencies altogether, prompting those agencies to seek other sources of funding or go out of business. They may prod other agencies to merge or consolidate to provide services more cheaply.

San Francisco’s Jewish hospital, Mount Zion, for example, succumbed to the growing trend and affiliated with a non-Jewish hospital because it was unable to be competitive in the face of managed care.

Although it still maintains some of its Jewish features, “It is not longer an obligation of the Jewish community,” said Wayne Feinstein, executive vice president of the Jewish Community Federation of San Francisco.

Bubis said agencies cut off from federation funds “will not go out of business voluntarily.” Instead, “they will fight to live by developing their own fund- raising mechanisms,” he said.

There is as yet virtually no public discussion about making services less available to non-Jews, but that sensitive issue may surface down the road during this introspective process, say some insiders.

For Shrage, one certainty is that the federation system’s agencies will grow more dependent on client fees.

At the same time, agencies may, as was the case with the Philadelphia agency and the local zoo, find new ways to vend their services to make up for lost public funds.

“We get a lot of support from federation,” but everything else is “so fluid that we need to diversify and expand what we do,” said Harold Goldman, executive vice president of the Philadelphia Jewish Family and Children’s Service.

On a positive notes, some Jewish professionals expressed strong optimism that in the new climate, partnerships between Jewish nonprofit agencies and states will be expanded. States will increasingly rely on them because of their expertise and cost-efficient tract record to deliver contracted services, they say, citing Jewish-sponsored vocational training as a prime example.

Federations also have a role in helping their agencies reduce their expenses, said Jeffrey Solomon, senior vice president and chief financial officer of New York’s UJA-Federation.

His agencies, for example, purchase fuel together, saving 5 cents to 20 cents per gallon, and last year began combined health insurance for a savings of between $4 million and $5 million.

“The best agencies,” Shrage said, “are run by very smart and highly entrepreneurial people and they will have to make major changes to survive in a new environment.”

As Karp put it: “It ain’t over [when] they cut a deal in Washington. It’s a process that’s just begun which will go on for years.”

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