Search JTA's historical archive dating back to 1923

Ujc Set to Reduce Budget As It Elects New Leadership

June 4, 2003
See Original Daily Bulletin From This Date

The United Jewish Communities is hoping to mollify critics and open a new chapter by adopting its second-largest budget cut in its four-year history.

The budget slash of nearly 10 percent — from $42.5 million to $38.5 million — is up for approval by the group’s Delegates Assembly, which is set to meet in Washington on June 9.

The reduction is largely a product of axing the federation umbrella’s university programs division and Trust for Jewish Philanthropy, along with deep cuts in its Campaign/Financial Resource Development and Israel Overseas departments.

The vote on the new budget, which will go into effect July 1, comes as nominations for new officers will be reported to the Board of Trustees, also meeting in Washington early next week. The Board of Trustees votes on the nominations at the General Assembly in November, which is when the officers become active.

Together, the budget cuts and the rotation in leadership could signal progress for the UJC, which has weathered years of growing pains.

Since its inception in 1999, the UJC — a merger of the United Jewish Appeal, the Council of Jewish Federations and the United Israel Appeal — has come under fire for a lack of vision and some of its operating practices.

Stephen Hoffman, the UJC’s chief executive officer, quieted much of the criticism when he took over the group two years ago, instilling faith in his leadership and working to create a leaner, more central organization.

But along with continuing frustration among some that the UJC has not yet arrived at a unified goal, a chief grievance has persisted among many federation leaders that the system is bloated and offers spare services in pressing economic and political times.

Hoffman told JTA that he determined the cuts based on a call for a 10 percent budget reduction by the UJC’s budget committee, which voted to recommended the budget April 14, and a recognition of the financial concerns facing local federations, which are hurting from lower campaigns.

The cuts would translate into a reduction in dues payments for federations, to be determined as an across-the-board cut or an adjusted cut based on federation’s campaign results.

Among some of the key changes to the UJC budget:

Campaign/FRD, UJC’s fund-raising operation, was cut from $10.2 million to $9.4 million;

Israel Overseas department, which runs missions to Israel and the UJC’s Israel office, was cut from $11.9 million to $9.1 million;

The consulting department, which services local federations, expanded from $4.7 million to $5.5 million;

The Washington Action Office, which advocates primarily for social programs that sustain local services of federations, was cut from $3.2 million to $2.8 million;

The marketing department was reduced from $4.7 million to $4.3 million;

The Trust for Jewish Philanthropy, a $1.5 million program to target new donors for designated national and international projects, was eliminated; and

The university programs division, a $500,000 program that ran campus fund-raising campaigns and worked with North American students in Israel, was completely cut.

In response, many federation leaders — including some of the loudest critics of the system — say they approve of the budget moves.

And several say the nominees for the top two UJC positions — Robert Goldberg for chairman of the board and Morton “Sonny” Plant for chairman of the executive committee — are well-suited to carry out fiscal reforms.

Goldberg, UJC’s current executive committee chairman, who will move up to replace James Tisch, is well-versed in the budget and operations of the UJC’s largest overseas beneficiary, the Jewish Agency for Israel.

He chaired its assets and liabilities committee.

And Plant, currently treasurer, has been a leading advocate for UJC budget cuts over the course of his two-year tenure.

“Sonny and Bobby bring the kind of experience that it’s going to take because we’re still in a building process,” said Jay Sarver, president of the Jewish Federation of St. Louis.

“Clearly, they have a good understanding of the budget, they’ve been involved in the process and experience is a big factor in making good decisions,” he said.

“The outreach efforts that have begun in earnest I believe are going to have a positive impact, and I think the budget result is just one indication that there’s a lot of listening and understanding going on.”

But gripes remain.

Some dispute the wisdom of specific cuts, and several of the smaller federations, which struggle to make their dues payments, say the cuts were not deep enough.

Robert Schrayer, vice chairman of the UJC, specifically expressed concern over the cuts in marketing and campaign development.

“We’ll provide less stimulus for communities around the country, and probably raise less money for overseas needs,” he said. Schrayer is also chairman of the Israel Emergency Campaign, which has raised about $370 million for Israel, $28 million of which was raised this year.

And Richard Wexler, a member of UJC’s budget committee, regrets the loss of the university programs department. He said that as past chairman of UJA, which strongly supported the university programs department, “I saw firsthand the incredible enthusiasm of the lay and professional leaders of the future of our system, who got their first taste of involvement through university programs, and I’m sorry to see it go,” he said.

But Wexler, who is a representative of the Chicago federation, said, “We want to see Steve Hoffman’s vision implemented for UJC. If this budget reflects it, we’re supportive.”

According to Hoffman, the budget “reflects a desire to provide stronger services to the federations.”

He cited specifically an expansion in funds for the young leadership cabinet and for consulting services, including a new telephone information service, which will be a one-stop shop for general questions and which grew out of discussions with small and intermediate cities.

“The consensus opinion in the UJC membership and leadership is that you cannot be all things to all people unless the membership is willing to pay all prices,” Hoffman said in the telephone interview.

“Membership has clearly indicated that they’re not prepared to pay all prices,” he said. “You have to decide where you want to emphasize service and where you’re going to not be in service. That’s what I did.”

“Every decision was difficult. There’s nothing easy about cutting people. There’s nothing easy about cutting service. But you make a decision about where you think you want to be and then you start weighing things one against the other.”

Goldberg, the incoming president, echoed that sentiment.

A lot of the federations are reducing their budgets, due to lower campaigns, he said, and the UJC felt it “was imperative that we did our share also. A lot of work went into the budget preparation and I believe it is a responsible budget and will respond to the needs of the federations without loss of service.” While the belt-tightening has placated some critics, others say serious problems remain.

For many, the most pressing is the system’s continuing shortfall in allocating funds overseas.

“The primary reason given for the creation of the UJC was to increase overseas allocations. That purpose is not yet fully fulfilled,” said Rabbi Daniel Allen, executive vice president of the Jewish Federation of Greater Hartford.

“However, if along the way, the management has been able to save important budget dollars, that’s a step in the right direction to increasing the overseas allocation,” said Allen, who formerly headed the United Israel Appeal, which channeled funds to the Jewish Agency for Israel.

Individual federations determine their own allocations overseas, but they continue to fall short of recommendations made by the UJC.

Some say the blame lies with local federations, but others note the host of competing demands on federations and say it’s up to the UJC to make the case for overseas needs.

A UJC overseas advocacy committee was planned at the start of the year, but it is still in formation.

The shortfall has led one of UJC’s overseas partners, the American Jewish Joint Distribution Committee, which provides relief and welfare to Jews abroad, to circumvent the UJC and solicit individual federations, sometimes causing confusion.

And in a May 19 semiannual meeting of JDC’s board of directors, Hoffman told the group that there might be a shortfall in cash, given the poor performance of federations’ campaigns.

Hoffman said he could not quantify the shortfall, as federations are in the midst of making allocation decisions. And he said that federations could continue disbursing allocations to the UJC’s beneficiaries, but only from their designated funds — 10 percent of their allocations.

According to Michael Zedek, chief executive officer of the Jewish Federation of Cincinnati, who represents large-intermediate cities on the UJC committee that makes overseas allocation recommendations, the overseas process is in dire straits.

“We’re at a point in time to deliver or time to admit that this process doesn’t work,” he said.

When asked to respond, Hoffman said, “I reject that.”

Recommended from JTA