A Nonprofit Leader Who Really Did Shut It Down

Ephraim Gopin, writing for eJewish Philanthropy:

I read with great interest the point-counterpoint by Robert Evans, Avrum Lapin and Seth Chalmer featured on eJewish Philanthropy recently. As someone who has recommended to a nonprofit Board to cease operations, I feel I have a unique perspective on the issue...

...There are too many nonprofits and institutions in Israel. I firmly believe that merging nonprofits with similar missions will create a more stable, vibrant sector where long term well-being and strategy are dominant, as opposed to the pettiness of “kavod” – honor – taking center stage...

...Israel has 40,000 registered nonprofits – 5-10,000 of which are active at any given time. We all know that a great percentage of them depend on overseas funding for survival. With the world recession and federations keeping more funds at home, we should be REDUCING the number of nonprofits here seeking funding overseas.

I am well aware of the dangers of merging – job and salary slashing being the worst. However, we should encourage this behavior because the alternative is worse: nonprofits who are debt-ridden, can’t pay salaries or suppliers, may have to shut down. In that case, everyone is out of a job. Donors and foundations should be pushing similar mission-oriented nonprofits to merge, as a means of survival if nothing else.

Lest you say I talk the talk but don’t walk the walk, here’s my story: I recommended to the Board of a nonprofit I headed to cease operations.

When I settled into the CEO chair and began looking over the financials, I was shocked: the organization was in major debt. When I sat with the CFO, we tried every which way to avoid the “cut, slash, burn and trim” method of nonprofit management. To no avail; the pit was too deep.

Finally, after all options had been exhausted, I sat with the Board and told them unequivocally: We need to cease operations immediately, declare bankruptcy and try to find another nonprofit to take over operating the facility... In this manner, we hoped to save as many staff jobs as possible and work on an arrangement where the nonprofit who takes over would repay the debt to suppliers.

I know there are too many nonprofits, too many institutions in Israel. Some are in debt, are behind in paying staff and suppliers and yet they refuse to shut down. I also know that upper management would never “fire themselves.” But something has to be done because, when a recession hits, the whole sector suffers enough. The problem is compounded when, in reality, a little forethought would have made the sector stronger, not weaker.

Gopin's perspective and unique experience is a welcome addition to the conversation, and a welcome reminder that waste and redundancy truly are present and problematic.

It's worth noting that the nonprofit sectors in Israel and the United States are quite different. The American combination of unprecedented commitment to private charity along with a comparatively meager government social safety net makes the US nonprofit sector rather a different beast from its counterparts not only in Israel, but really everywhere else, at least in many ways.

For the Jewish nonprofit sector in particular, it is also of great import that in America, voluntary associations, congregations and nonprofit organizations constitute the entirety of Jewish communal expression, whereas in Israel the very State itself is a Jewish organization.

These two differences -- in the relationship of nonprofits to the State, and in the relationship of Jewishness to the State -- are bound to affect the ways in which each country's Jewish nonprofit sector conceives of itself, and is likely to affect questions of efficiency, redundancy, ideological diversity, and more.

For more reading on charitable sector leaders intentionally putting themselves out of a job, I suggest reading up on the AVI CHAI Foundation's decision to spend down and sunset itself.

I'll Put Down My Institution if You Put Down Yours

Writing for eJPhil, Robert Evans and Avrum Lapin point out that we have, in the United States, "Too Many Jewish Institutions".

As a community, we have funneled untold billions of dollars and other human capital into constructing Jewish institutions – museums, hospitals, social service agencies, arts and cultural entities – that in too many cases would be more suitable as smaller components of larger facilities rather than as “stand alone” entities...

... It is not our role to state which institutions hold the most value, reputation or prestige. That is the role of stakeholders, constituents and leaders. However, our logic tells us that if your city already has millions of dollars invested in a Jewish art museum, you probably don’t need to build a new institution nearby that could feature exhibits and collections housed elsewhere.

We should also address the specialization of each institution. If there is a strongly-supported American Jewish history museum, does there need to be a Russian-American Jewish history museum, a European-American Jewish history museum, a Spanish-American Jewish history museum or can we cover them all under one set of four walls?...

...Why not a Jewish Arts Center in a synagogue complex built to include a Holocaust Remembrance wing? By putting these entities all into one building, we are preserving precious resources and reflecting on cooperation and other efficiencies.

I can just imagine the meeting between all those "stakeholders, constituents and leaders." Somebody starts the meeting off noting that a lot of the institutions represented in the room, in the words of Evans and Lapin, "would be more suitable as smaller components of larger facilities." "Sure," another leader will respond, "some of us need to be subsumed. Fine. You go first." The egos of leaders can be annoying, but the egos of leaders do not constitute an entirely harmful force. When leaders feel like big shots of organizations, they're more invested. Spreading around the ego-boost is a very real way to spread around engagement.

But this isn't really about leaders' egos. Another quibble: the authors seem to assume the existence of a certain, stable-sized pot of funding which can either be divided among many institutions or given to fewer of them in larger portions. This is a false assumption. Perhaps there are certain donors who will donate generously to a Russian-American Jewish history museum, but who will not give anything at all for an American Jewish history museum. In such a case, the separate museum is not necessarily as inefficient as one might assume. How much of the redundancy really represents money that could be consolidated, and how much represents money that will be spent either redundantly or not at all? It would seem quite difficult to say.

Let me not belabor this point, however. I fully concede that inefficiency is rampant in American Jewish communal life. The real problem is that human life is not all about efficiency. The most efficient meal would be a perfectly calibrated nutritional concoction delivered intravenously, but I think most of us would rather have a nice meal. Consider: how many of the best days of your life could be best described by the word "efficient"? I don't mean to say that efficiency counts for nothing -- just that it only counts as much as it counts, because other things count too.

Some of those things that count are the vast diversity of views and ideologies in American Jewish life -- differences that sometimes require institutions with divergent missions, values, and operational guidelines. To the authors' rhetorical question, "Why not a Jewish Arts Center in a synagogue complex built to include a Holocaust Remembrance wing?" I answer: what kind of synagogue complex? Whose shul gets the community's art, and what does that say to the people who daven across the street?

The countless throngs of Jewish organizations that have sprung up from generations ago to the present tell the story of a people unlikely to fall suddenly into lockstep with one another, and I'm not ready to say that's a bad thing. Evans and Lapin make a point worth considering, and I'm sure there are many cases in which they're right. But in a world of declining civic engagement, do we really want to say that fewer of us should be starting organizations? Maybe we do. Maybe we need more joiners, more humble servants, and fewer egotistical leaders. But I do hope we conduct the conversation rightly started by Evans and Lapin on grounds far broader than efficiency alone.

David Elcott on Engaging Baby Boomers

As part of our Office Hours series, Prof. David Elcott discusses his research into Baby Boomers and their place in the communal life of minority communities.

From the J-Vault: Is "Federation" a Dirty Word?

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This week, from the J-Vault: Miscellanea: Should Social Lending Agencies Affiliate With Federations? (1928)

In this exchange of letters, published in the Jewish Social Service Quarterly (predecessor to the Journal of Jewish Communal Service), the director of a Federation-affiliated independent agency in Philadelphia (in this case, a social service microfinance agency) complains to the research director of Cleveland's Jewish Federation that the Federation brand makes Jews reluctant to take advantage of the agency's services.

"There is a definite place for a social lending agency in the community structure," writes William Hirsch. However:

[I]t is best that the lending agency should not be a part of the case working agency... The Federated Loan Association is only nominally a Federation agency. We receive no funds from the Federation. We are organized under a separate charter, incorporated in this State, and have entirely independent funds...

...We are not associated with the Federation, but since our name, "The Federated Loan Association," smatters very strongly of federation, our growth has been materially hindered. We have had any number of complaints about the name, from our clients and prospective clients, and invariably the inquiry over the telephone indicates a confusion in the mind of the inquirer as to our connection with the Federation. In fact, it is so serious that we will be compelled shortly to change our title. We know definitely of a large number of prospective clients who would not come here because "Federated" appears in the name... It is only after we have interviewed our clients and they learn definitely that we are not a part of the Federation, certainly not associated with the Jewish Welfare Society, that we are able to get co-operation.

John Slawson responds -- perhaps understandably a tad coldly -- questioning whether this association between Jewish Federations and charity (or, the taboo of being "a charity case") holds true in every community:

I should like to suggest that the attitude is conditioned in a very large measure by the type of federation and the type of case work agency in any given community.

If a federation is avowedly a centralized social instrument designed specifically for the care of the miserable and needy—the pauper, the sick, the maimed—then, of course, there is ample justification for the feeling of dependency upon an association with an instrument of this nature.

However, if a federation interprets its mission as that of serving the entire Jewish community, in all of its communal needs, regardless of the economic status of the group served... not limiting its activities to cure, nor even to prevention, but functioning with the object of positive enrichment of the social life of the entire community—then affiliation with the federation simply implies a joining with a central instrument for the purpose of rendering the most effective mutual service in the community.

Hirsch takes up his pen once more:

Dear Dr. Slawson:
After reading your letter twice I cannot quite seem to agree with you...

...The federation is "avowedly a centralized social instrument designed specifically for the care of the miserable and needy." In addition, however, federation would like to be a preventive instrument and would like to serve those whom it can aid through guidance, advice and information. True, federation does try to serve the entire community, but just so long as the entire community, or that part of it that can afford it, supports federation with a view to helping those who are in need, you may rest assured that it will not be appealed to by persons financially independent. After all, the financially independent, in the main, are the supporters of the federation. They are the ones who talk federation, who take part in the campaigns and who have to support it by word of mouth against attack. You cannot say that the federation is primarily for the help of those who support it.... Certainly, were we to eliminate the helpless, the sick, the maimed, the cripple, the mentally deficient, and the pauper, there would be no need for maintaining any sort of a federation. If it were to be purely a public service organization to help at a nominal charge or free of charge, without the pauper problem, you could not very well organize or maintain such an instrument in the community.

It would seem to me that the federation you have in mind would embrace also the work of public school guidance and civic aid. The work that you have in mind is not purely Jewish work and as such should be done by the city's various bureaus...

...[T]he Federated Loan Association is hampered by its name and is injured by its very remote association with Federation to the extent of being unable to reach those who today are being bled by the usurer and the commercial lenders.

If Slawson responded again, his response was not published in this article. It appears, however, that Slawson's vision of comprehensive Jewish Federations as incorporating far more than social services, has long since won the day.

Download the complete article.

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