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A Call For Nonprofit Transparency

A Call For Nonprofit Transparency

We are proud to introduce “The Jewish GDP Project: Beyond the Dollars” in this week’s issue and report on its initial findings, sobering though they may be. The study, a project of The Jewish Week Investigative Journalism Fund, is based on the generous pro bono research and incisive analysis over a period of months by two experts in the field, business strategist Mark Pearlman and Yale University management professor Edieal Pinker. They note that the collective revenue for Jewish nonprofits in 2007, the start of a major recession, was higher than the same figure for 2012, by approximately $1 billion — an 11 percent drop in funding that could have gone to a variety of Jewish charitable, educational and social causes.

While the American economy in general stopped declining in mid-2009, the Jewish economy has yet to experience a full recovery.

As noted in our story, The Jewish GDP (Gross Domestic Product) is an update of a study by Pearlman that was published here in 2009. The overall goal of the project is “to track the financial health of the Jewish nonprofit sector over time, and to foster productive discussions about transparency, efficiency and accountability.”

The difficulties in compiling a thorough view of the Jewish GDP, in order to help understand and analyze the community’s economics, include the fact that there is no official or complete list of American Jewish organizations. And critically, those groups that claim to have exclusively religious missions — from synagogues to camps to kashrut supervision agencies — are exempt from filing IRS Form 990, the nonprofit financial public disclosure form from which Pearlman and Pinker sourced their data. As a result there are large holes in the study.

Could the decline in Jewish funding reflect a change in priorities within Jewish life, with more charity going towards non-Jewish causes? Does it mean Jewish nonprofits are not keeping pace with the changing interests and values of Jewish donors? It is difficult to speculate, given the incomplete data.

The Jewish GDP as compiled here is still useful for tracking trends, but as Pinker explained, “We can’t make definitive statements about how money is allocated” with full confidence across a variety of categories.

We plan to build on this initial report, exploring the successes and challenges in the Jewish nonprofit world, and inviting a variety of experts to offer their views on how best to ensure that the community has the tools, creative ideas and best practices to move forward. Most importantly, for now, we will strive for greater transparency among Jewish organizations and institutions, encouraging even those groups that are not legally bound to provide certain financial information to do so voluntarily. They should have nothing to hide. As Pearlman says, “We deserve a more transparent marketplace.”

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