The Jewish Theological Seminary is facing a new financial crisis and plans to dip into what its new chancellor calls a “rainy day fund” to cover a $2.2 million budget shortfall, The Jewish Week has learned.
The grim financial picture emerged last Thursday when Chancellor Arnold Eisen met with the entire seminary staff at 9 a.m. to disclose the shortfall. He also provided an overview of the seminary’s operations, which one attendee described as a “pep talk,” and insisted that the seminary was stronger than ever and would get through this.
His office said Tuesday that he was traveling and unable to be reached.
The seminary’s provost, Alan Cooper, met privately 90 minutes later with the faculty.
“Most faculty showed up, which is amazing” in the summer, said one faculty member. “We all knew it was going to be about our financial condition and of our failure to reach our budgetary goals. … They have raised less than they hoped for.”
Benjamin Gampel, chairman of the Faculty Executive, said the “faculty was concerned but quite respectful.” He said Cooper told them “the people who have contracts and are on tenured tracks are all safe. When there are cuts, those cuts would be of the new people.”
Another faculty member who was at the meeting recounted that Cooper went even further, announcing that the seminary’s 68 part-time teachers — who comprise about half of the seminary’s faculty — should understand that their rehiring is not a certainty for the academic year beginning in September 2009. Cooper was at the seminary Tuesday but did not return phone calls or e-mails.
Although the seminary hired two new senior faculty members this year — Evyatar Marienberg and Michelle Lynn-Sachs — it was made clear that a hiring freeze is now in effect and that adjuncts and those faculty who have contracts that end next year should not expect to be rehired.
In addition, the faculty was told that those earning more than $100,000 would not receive a cost of living increase or a raise next year. Those who earn less than $100,000 would receive a cost of living increase and a 2 percent raise, according to those who attended the meeting.
Elise Dowell, the seminary’s senior director of communications, said she did not attend the meeting but understood it was a “somber meeting in a respectful way.”
She said the steps proposed were “what any responsible administration would do.” Dowell stressed that there are “no plans for future cuts at this time,” but added: “We constantly review where we are, and to be financially responsible we will be looking at the institution at large and identifying ways to deal with the current economy.”
Asked about the $2.2 million budget shortfall, Dowell would say only that the seminary would be taking “slightly over $2 million” from a “rainy day fund.”
The bleak economic picture comes at a time when the seminary is still searching for a development director to succeed Rabbi Carol Davidson, who recent left.
“We had been hearing for weeks now that fundraising was not doing well,” said one faculty member. “But they said that nothing is certain until the end of June [the end of the fiscal year]. We were told that what we heard was not the last word.”
Dowell insisted that fundraising was better this year than last, but unlike in previous years she declined to provide any numbers or the reason for the change. In 2004, she said the seminary had raised $17 million compared with $14 million in fiscal year 2001.
Nor would Dowell disclose the size of the operating budget, how much money was in the “rainy day fund,” whether the seminary had ever tapped it before and whether it was different from the reserve fund from which the seminary borrowed millions just a few years ago.
In December 2004, The Jewish Week reported that the seminary was facing a debt of about $50 million, had imposed a hiring freeze and had to sell land at Amsterdam Avenue and 100th Street it had bought four years earlier for graduate housing. In addition, it sold two apartment buildings on 122nd Street adjacent to the campus that had been used to house students. Graduate students are now tenants there.
The seminary has been circumspect in its finances and it is not known whether all of the money borrowed from the reserve fund — estimates of the amount taken range from $26 million to $50 million — has been repaid.
Financial troubles for the 122-year-old seminary, the academic and spiritual center of Conservative Judaism worldwide, come at a time when the Conservative movement is losing members to the Reform movement. In 10 years from 1990 to 2000, membership in Conservative synagogues dropped from 915,000 to 660,000.
The troubles at JTS also come as rabbinical seminaries of both the Reform and Orthodox movements are reporting strong financial growth.
A spokeswoman for Yeshiva University, the central institution of Modern Orthodoxy, said it expects to raise $140 million this fiscal year. Aside from a $100 million gift last year from Ronald Stanton — the largest ever for Jewish education — the university raised $59 million last year.
“We have hired 56 full-time faculty for graduate and undergraduate programs this year,” she said. “Since 2003-2004, we have expanded our undergraduate faculty by 30 percent. … We are having an excellent year — an exceptional year.”
Rabbi David Ellenson, president of Hebrew Union College –Jewish Institute of Religion, said there has been a dramatic turnaround financially since he became president seven years ago.
At that time, the school, the intellectual, academic, spiritual and professional leadership development center of Reform Judaism, had a $4 million deficit and a $32 million budget. It took four years to turn things around through a number of cutbacks and the elimination of redundancies, Rabbi Ellenson said.
Today, he said, the college is operating with a balanced budget of nearly $39 million and its endowment has increased in the last five years almost 1 1/2 times “due to fundraising and prudent investments.”
“We hire part-time faculty where necessary and in a way that is responsible and prudent,” Rabbi Ellenson said. “There is no institution of higher learning that is not challenged by fiscal issues and questions of sustainability. We feel good about the direction in which we have moved and are happy to have a completely balanced operating budget.”