It’s hard to develop a budget when you don’t know exactly what you’ll be doing with the money. But without a budget, it’s impossible to do anything. That’s the Catch-22 the new national umbrella organization for Jewish federations (the product of the merger between the United Jewish Appeal and the Council of Jewish Federations) faces as it struggles to get off the ground.
Last year’s creation of the United Jewish Communities was spurred by a desire by federations to get services delivered more efficiently and to have a greater say in national decision-making.
Now, many in the system are viewing UJC’s newly unveiled $41.7 million budget proposal for operating expenses as a first indicator of just how successful the new entity will be at balancing the larger federations’ desires for reduced costs with the smaller federations’ anxiety about losing services.
The proposed budget, which will be voted on by UJC’s Board of Trustees and Board of Delegates on June 15 for the fiscal year beginning July 1, represents a $4.4 million reduction from what the UJC’s predecessor organizations were spending before the merger.
It trims slightly under $1 million from what UJC itself spent in the 1999-2000 fiscal year, cutting some departments heavily while substantially increasing resources for others.
Among the largest proposed changes from this year’s budget:
# Regional offices would be allocated $5.4 million, a 19 percent cut from this year’s $6.7 million. These offices assist federations with fund raising and personnel issues. The savings would result primarily from cutting a variety of programs and eliminating 15 (or nearly one-quarter) of regional staff positions, but details as to which regions and positions will be affected will not be disclosed until after the budget is approved.
At the same time, what is being termed "management services" to the federations (not part of the regional budget, but part of a new plan to revamp services) would increase by $300,000.
# Campaign /Financial Resource Development, the major fund- raising division of UJC, would be cut by $1.6 million, or approximately 14 percent.
The largest cuts would be to eliminate a $500,000 direct marketing center (which assists with telemarketing and direct mail solicitations) and to cut subsidies for missions, which help entice donors on fund-raising trips, by 10 percent.
In total, however, missions’ subsidies would be cut by only 6 percent, because subsidies to the Israel/Overseas Department would actually increase somewhat.
# The Community Planning Department budget would more than double in size, from $415,902 to $1.1 million. The department involves among other things, strategic planning and research, including oversight of the upcoming National Jewish Population Survey.
# The Israel/Overseas Department would be cut from $8.35 million to just under $8 million. Certain programs within the department would receive additional funds, but the United Israel Appeal would be cut by $495,000, or 28 percent; and $117,000, or 25 percent, would be cut from the Partnership 2000 program, which links American Jewish communities to Israeli communities for people-to-people exchanges, economic development and services to new immigrants.
Also revealing are suggestions for future plans laid out in the budget. For example, a committee is exploring how to further reduce costs in infrastructure and subsidies for missions.
In addition, as the budget notes, the cost of new programs is not clear: such as the newly formed pillars, four areas on which UJC is concentrating its focus.
The budget covers all operating expenses and services provided to its member federations, but does not include the funds distributed overseas to the Jewish Agency for Israel and the American Jewish Joint Distribution Committee. That total was almost $300 million in 1999: and is expected to be roughly the same as last year.
The UJC’s revenues come from a combination of membership dues from the federations and 11 percent taken off the top from federations’ overseas allocations, a holdover from the revenue system of the UJA. In the next two years, UJC will be replacing this with a streamlined dues system.
Federation leaders say they expect the budget proposal will be approved at the June meeting in Chicago by the two UJC voting bodies. The Board of Trustees and Board of Delegates are dominated by federation representatives, with larger federations getting proportionally more representation than smaller ones.
But some leaders say the cuts are not dramatic enough, considering that the merger of two organizations was expected to lead to greater efficiency.
"Many, many federations want to see the UJC budget smaller," said Robert Aronson, executive vice president of the Jewish Federation of Metropolitan Detroit, where there are 90,000 Jews.
Aronson said he would have liked to see the budget fall below $40 million, but still supports the proposal, viewing this year as a first step.
Meanwhile, smaller federations are worried that their ability to raise funds will be hindered by UJC’s proposed cuts to regional offices, which offer small and intermediate-sized communities consultation on fund raising, recruiting personnel, marketing and other issues.
At an April meeting of the federations, UJC’s chief executive officer, Louise Stoll, outlined a "hub" system in which large federations would help their neighboring federations and a national team of consultants would be available to help small federations.
However, details are still somewhat sketchy (a more specific plan is to be unveiled later this month) and leaders of the smaller federations are skeptical.
Small federations also worry that with reduced subsidies for missions, they will not be able to muster enough interest in the trips, which federation leaders say increase donors’ campaign contributions in the long run.
Those cuts are expected to affect small communities more than large ones, because UJC leaders have said they will scale back sponsorship of smaller missions, which are less cost-effective than larger ones.
Marvin Goldberg, executive director of the Jewish Federation of Greater Charlotte, in North Carolina, where there are 8,000 Jews, said cuts to regions could lead to a "national agency that’s isolated from its owners.
"But leaders from both small and large federations say that given UJC’s newness, it is simply too early to make any final judgments on what should or should not be cut.
"I think it’s a transition budget, developed as we’re trying to identify what the organization is going to look like," said Lawrence Fine, executive director of the Jewish Community Federation of Rochester, N.Y.
"Now it’s hard to tell whether the cuts in various areas are the right cuts or wrong cuts because the organization is still so new."
John Ruskay, executive vice president of UJA-Federation of Greater New York, said that while some of his colleagues want greater cuts, he is "not joining this bandwagon" and given the early stage of organizational development, would "like to maintain the capability of UJC."