UJA-Federation of New York expects the economic crisis here to deepen in 2009 and is gearing up in various ways to provide more social services for those in need of help, including dipping into its reserve funds if necessary.
John Ruskay, CEO and executive vice president of the federation, said the charity will “take emergency steps as needed,” and is “planning intensively” to launch a number of multi-service centers that would provide family services and counseling, vocational counseling, pro bono legal advice and other forms of help in key areas of the community by the spring or summer.
This form of one-stop counseling would go into effect “as the need becomes more urgent,” Ruskay said in an interview.
Based on anecdotal reports and predictions, he said the economic downturn is expected to be felt more sharply in 2009 as more people lose jobs and turn to social service agencies for assistance.
Complicating the problem is that those agencies, like the more than 100 assisted by UJA-Federation, will have far fewer dollars at hand, as the result of deeply reduced government aid and a donor base hit hard by the collapse of the financial market.
“We are hearing of eight, 10, 20 families a week coming to JCCs and day schools and saying they are in need of substantial help or they will have to drop out,” said Ruskay, who added that federation officials anticipate retail closings, additional layoffs, continued weakening of the real estate market and deep government reductions this year.
UJA-Federation last week announced a $1 million scholarship fund to help parents of day school students meet steep tuition costs, but it recognizes that at about $5,000 a grant, those funds would only help about 200 students. (See Jewish Week, Jan. 2)
There are tens of thousands of yeshiva and Jewish day school students in the New York area, and many parents have several children in these schools.
The federation’s endowment, which had increased to $875 million before the economic downturn this fall, is at about $750 million at present. (It had no funds invested with Bernard Madoff, charged with operating an enormous Ponzi scheme that collapsed last month.)
Ezra Merkin, a prominent investment expert and communal leader who chaired UJA-Federation’s investment committee until the scandal broke, is no longer a member of the charity’s board. He is being sued by a number of private investors on charges of “gross negligence” for allegedly putting their monies directly into Madoff’s fund without their knowledge.
The Madoff scandal has led to increased reflection and questioning in the Jewish community as to how charitable funds are raised, and who makes decisions about how they are spent.
Ruskay noted that this situation “will have a long-term impact on Jewish philanthropy and the Jewish community.” But he expressed confidence that UJA-Federation donors recognize the importance of its work to help Jews and others here and around the world, and appreciate the charity’s ongoing efforts to professionalize and make transparent its business practices.
In analyzing the situation today, Ruskay said “the major event is the contraction of wealth and economic downturn,” not the Madoff scandal. He asserted that “there is still extraordinary wealth” in the community “and the desire and recognition among those who can, to share with those in need.”
Israel’s current conflict with Hamas in Gaza is being monitored closely at the federation, Ruskay said. The situation “consumes our attention and stretches our consciousness yet again from matters domestic to global concerns,” but has not, as yet, had an impact on the charity’s campaign.
“We are in touch with the Israeli government on multiple levels,” he said, “and maintain bonds of support, and are prepared to respond as needed.”
The Israeli Trauma Coalition, created by the federation in 2002 during the second intifada, is focusing its resources throughout the southern region, under attack from Hamas rockets, to respond to psychological trauma.
Despite funding agencies and programs that reach throughout the community, federations are perceived by some as the enclave of the wealthy, no doubt in part because the charities tend to concentrate their resources on appealing to the wealthiest members of the community to become major donors and sit on their boards. It is said that about 90 percent of campaign funding comes from about 10 percent of the community.
While pragmatists insist that the most cost-effective form of fundraising is to concentrate on gifts from big givers, others suggest that in the long run, such efforts will add to the image of federations as elitist organizations. Ruskay said a shift is taking place within UJA-Federation away from the emphasis on big givers, pointing out that the only areas of spending that increased in the charity’s current budget, at a time of downsizing, were in various efforts to increase the donor base.
About $1 million is being used for direct mail campaigns, telemarketing, e-philanthropy, and upgrading federation’s Web site in the hopes of reaching more people and attracting more givers.
The current number of donors is estimated to be 64,800, down from the 1996 high of 91,400.
Looking ahead, Ruskay said the “next three to five months will be critical” in assessing the depth of economic pain in the community.
He cautioned that “no philanthropy will be able to keep everyone in New York who has lost a job, whole. And every philanthropic dollar that has been lost cannot be replaced.”
But he said that federations and foundations that “can step up to the plate” must do so now. “That is what the moment requires.