UPDATE: This version has been updated to correct several inaccuracies that appeared in the May 14 newsletter.
The UJA-Federation of New York is expecting that campaign revenue in fiscal year 2009-10 will drop slightly, but that the country’s largest Jewish federation and local charity will be able to keep intact nearly all of its local grant-making.
The federation thus far has raised $112.4 million through its annual campaign and is on target to hit its $134 million goal by the end of its fiscal year, June 30, the federation announced at a board meeting Wednesday.
Based on those projections, along with funds from the federation’s endowment and from bequests, the organization is eyeing $179.3 million in available resources for fiscal year 2011.
Federation officials, however, are pushing its board to adopt a 2011 budget with $185.9 million in spending — meaning a $6.6 million deficit — primarily so it can keep running special projects such as the $4 million per year Connect to Care network it launched to help struggling middle-class families. The board Wednesday allocated $129.2 million for grants to support beneficiary agencies and programs in New York, Israel and around the world.
The proposed spending represents a $6 million drop in the entire budget from this year, including a 2.9 percent cut in grants and program support, and a 2.1 percent cut in administrative costs. In total, the federation is expecting the cash collections from its campaign to be slightly down from this year’s budget of $118.7 million in unrestricted funds. In 2010, the federation also budgeted $6.7 million from restricted funds collected for targeted purposes.
Next year it is expecting $117.9 million in cash collections and is expecting to spend $5.3 million from previous donations for targeted purposes. But the federation expects to close some of the gap through increased spending from its endowment and bequests, which will be up to $53.3 million from $49.8 million this year. The federation’s endowment has seen a recovery since taking a massive hit during the recession.
The endowment peaked in 2008 at $875 million, but plunged by more than 25 percent at one point. It now sits at around $730 million, about 17 percent below its peak according to the federation’s CEO, John Ruskay.
So how will the federation spend its money in 2011? Based on how Ruskay and the federation’s president, John Shapiro, spoke at the meeting, it was clear that the organization is feeling a real tension between overseas needs and those at home in New York.
The federation plans to reduce both its overseas budget and its domestic budget by 2.5 percent; but, according to Ruskay, the federation will be able to maintain its unrestricted support for most of its local agencies with only a 1 percent reduction.The federation will be able to keep much of its spending locally relatively level because several programs and agencies will see much more significant reductions, but the federation is not yet ready to make public the specifics until its board acts next month.According to Shapiro’s breakdown, the federation will spend $35.2 million in unrestricted core operating support given to agencies in New York and $43.6 million to overseas agencies.
It also will spend approximately $37 million on its three internal pillars that send money both overseas and domestically: $15.5 million on its Caring initiative; $14.3 million on projects related to its Commission on Jewish Identity and Renewal; and $7.3 million on its Commission on the Jewish People.
For those keeping tabs on the budget of the Jewish Federations of North America, the federation system’s umbrella group, New York’s federation will pay $4.9 million in dues to JFNA — down from the more than $7 million a couple of years ago, according to Ruskay.
In the Q&A after federation officials presented the budget to their board, most questions focused on the $45.2 million for non-program administrative costs and operations. Some gasps were audible when the organization’s treasurer, Roger Einiger, first presented the figure.
Einiger started by pointing out that the administrative budget has been sliced by $9.1 million since 2009. Of that $9.1 million, $1.3 million will come in cuts to administrative expenses slated for next year.
The actual reduction was $2.3 million, but $1 million of that will be offset by an increase in the cost of employees’ benefits, taxes and a modest union negotiated raise.Ruskay was quick to point out that the number of employees at the UJA-Federation of New York has dropped in recent years from 512 to 417.
About 70 percent of the federation’s proposed budget will be spent on grants to other agencies, and another 5 percent is spent on other program activities.
Other expenditures are 11 percent on financial resources development, 7 percent on management and 4 percent on marketing and communications. communications.