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UJA New York cuts 11 percent of its staff

My story on cuts at UJA-Federation of New York:

The country’s largest Jewish federation became the latest major organization to downsize in the face of the recession.

The UJA-Federation of New York, which raised some $153 million in its annual campaign last year, announced Wednesday that it was cutting 52 employees — slightly more than 11 percent of its staff.

The layoffs, along with the decision to eliminate 20 staff positions that are now unfilled and other administrative cuts will save the federation an estimated $7.4 million, according to federation officials.

Thus far in 2009, the federation is 10 percent behind in its fund-raising pledges compared to the previous year, and it is 12 percent behind on collections. The federation’s $675 million endowment has also shrunk by 25 percent, making the cuts necessary, its top professional said Wednesday.

“We took a very broad look at the situation and we are doing everything we can to hold our agencies as a whole together,” the federation’s executive vice president and CEO, John Ruskay, told JTA. “We made a commitment to see where we were at the first of the year.

"The state of the economy is increasingly grim. Cash collections are down. And by end of January we have been working diligently about this and tyring to figure out how to do this as carefully and deliberately as possible.”

The organization, which funds hundreds of nonprofits in New York and abroad, also will reduce allocations slightly. And it will use money from its endowment to pay for an $8.9 million deficit it anticipates for 2010. The federation also has cut traveling expenses, reduced its budget for events and instituted a salary freeze.

Sixty percent of the layoffs came from the professional side and 40 percent were administrative.

Staffers laid off were informed individually Wednesday. Later in the day, Ruskay sent an e-mail to the entire staff announcing the cuts.

Ruskay told JTA that he does not anticipate further cuts in the foreseeable future.

“We believe we have made a very careful projection for right now and the year beginning July 1, and assuming the floor doesn’t drop out of either the economy or the campaign, we think we are set for the next 15 months at least,” he said.

That projection includes whatever fund-raising hit the federation anticipates from its donor base that lost money in the Ponzi scheme of Bernard Madoff, whose victims were heavily concentrated in New York.

New York joins others Jewish federations in enacting layoffs. Earlier this month, the Jewish Community Federation of Cleveland announced that it was laying off 25 employees and trimming $600,000 from its operating budget.

Some of the federation staffers in New York apparently were caught unaware, according to one laid-off employee.

“There was no warning," said the employee, who did not wish to be identified. "The management did everything to assure us they would do everything to avoid layoffs. When we had to negotiate our union contracts, we agreed not to take a cost-of-living increase to avoid layoffs."

Here’s the letter Ruskay sent to all UJA employees late Wednesday announcing the cuts:

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Dear Colleagues:

At an all-staff meeting in early October, I communicated our commitment to work diligently to preserve one of our most valued assets – the staff of UJA-Federation.  As I have expressed on repeated occasions, it is our staff — working at every level of our organization with dedicated volunteers, and with the support of our donors — that makes it possible for UJA-Federation to provide the support and care it does, every day, throughout the world.

Since we met together, the prospects for an early economic recovery have diminished.  Unemployment as well as mortgage and consumer loan delinquencies have escalated.  The recession has become global.  The stock market has had a precipitous decline and the state of many of our financial institutions appears to be precarious.

It is in this context that 20 positions that had been held open as part of the expense reduction plan undertaken last fall have now been removed from our budget.  Despite this, a responsibly negotiated union settlement, and other budget reduction steps, we have today terminated 52 staff members from throughout the organization. They include professional and administrative positions, union and non-union members. Many have labored long and hard to strengthen UJA-Federation and our community.

Impacted staff members are being provided severance and other support but this will be exceedingly painful for those who will need to seek employment in this difficult economic climate.  And it will also be challenging for those who remain — those of you who will be torn from close associates and who will be expected to continue to provide the excellent level of professionalism we have come to expect from all of our employees.

The decisions regarding retrenchments were made deliberatively with an eye toward downsizing some departments, ending certain activities, and creating opportunities for reducing redundancies and maximizing efficiencies. Although it will be difficult with fewer staff, we will all need to work together in new ways to ensure UJA-Federation’s continued capacity to fulfill our essential roles in financial resource development, planning, and community-building. We will need to work more collaboratively and work harder in order to be successful.

Although our 2009 annual campaign began strong in the fall, and the push for cash collection at the end of the calendar year was exceedingly strong, the unprecedented economic downturn has accelerated in the last few months.  Our campaign and endowment have been negatively affected, and with pessimistic projections for 2010, we face a "perfect storm" — declining income, declining government support for agencies that serve the most vulnerable, and increased need.

Our response is multi-faceted:
*       While our overall allocations will be reduced, unrestricted support for most network agencies in New York will be held whole as they will be so important for those in our community who are and will be suffering from this deep recession,;
*       We are in the final stages of launching a major initiative to create multi-service sites for the new Jewish poor;
*       We are reducing UJA-Federation’s administrative budget by $7.4 million and  implementing an across the board wage freeze; and
*       We will turn to our endowment to fund an $8.9 million deficit for the 2010 fiscal year.

One can say that our Annual Campaign, which stands today “only” $11 million (10%) behind last year, continues to reflect broad recognition of UJA-Federation’s essential role in the community.  To those outside our organization this reflects remarkable resilience in this economic environment. However, we must proceed within the framework of the economic reality of our financial resource development, cash, and endowment trend lines.  And most believe the 2010 year will also be exceedingly challenging in both New York and throughout the nation.

We wish we did not need to make these decisions.  My colleagues and I have sought to respond to the reality we face, and I believe that we have done the best we can among exceedingly difficult choices. I want to assure you that it is my conviction, and that of my senior colleagues and our officers, that UJA-Federation continues to be well-positioned to fulfill our unique roles in campaign, planning, and community building, which will enable UJA-Federation to continue to be the preeminent Jewish philanthropic entity in North America.

An all-staff meeting will be held on March 19th. In the meantime, I wanted you all to be informed of where we are today.  With your help, we can and will manage our way through this economic downturn and preserve UJA-Federation’s great strengths, so that it can serve our community and our people long into the future.  I thank you for your commitment and dedication and know that my colleagues and I will be able to count on you to help ensure that UJA-Federation continues at the highest level of excellence so we can actualize our abiding mission: to care for those in need, renew Jewish life, and strengthen our people.

John

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