Planning ahead like ‘playing Rubik’s Cube on steroids’

WASHINGTON – As the US has been experiencing a spike in new COVID-19 cases in the past month, many Jewish organizations have been struggling financially. The Conference of Presidents of Major Jewish Organizations hosted on Tuesday a webinar to discuss what the organizations have learned, and where they are headed.

William Daroff, CEO of the Conference of Presidents, told The Jerusalem Post that the situation with nonprofits and Jewish communal organizations is still very fluid and very much up in the air. There is a recognition that this new reality we are in is not settled, he said, and it is unclear as we see these waves of COVID19 infections come in, now mostly in the southern and western United States.

He said that planning in this environment is like “playing Rubik’s Cube on steroids,” because so many potential options exist for what the

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“One top level is on philanthropy,” Daroff continued. “People who were donors to Jewish institutions in January and February now find themselves being recipients of social service assistance from Jewish agencies because they have been laid off or had their hours reduced or otherwise have financial difficulties, as well as sickness and illness because of COVID.”

Speaking about layoffs, furloughs and pay cuts at Jewish agencies across the US, Daroff said that lack of certainty creates instability within the Jewish communal world and within the nonprofit world.

“There will certainly be a number of nonprofits that were around in March that will not be around when we get out of this,” he said. “And part of that will be the efficiencies of the system that nonprofits come together and figure out how they can do more with less, or which agencies can be merged into others. But there will be agencies that are needed and necessary, but just don’t have the resources to sustain themselves and will disappear.”

Daroff said that he is worried about Jewish communal organizations sustaining themselves through this crisis and after. “Most nonprofits do not have a huge rainy day fund,” he noted. “These agencies are focused on providing critical services to help people and not on holding funds back, so they have big financial cushions to rely upon.”

Some of the institutions are pay-for-service, such as Jewish Community Centers (JCC), which have seen a massive decline in income in the past four months.

Doron Krakow, president and CEO of JCC Association of North America, told the Post that there are 173 JCCs across the United States and Canada, that pre-pandemic, would generate roughly $1.6 billion annually. About 1.5 million people would attend these centers in-person weekly, he noted. “It’s the biggest point of contact for the North American Jewish community that we have on a face to face basis.”

A major stream of revenue is the Jewish summer camp program, with about a hundred thousand kids a year. “We are the largest employer [in the community]; we have 37,000 full and part-time staff that work in JCCs during the year, and in the summer, another 17,000 camp staff. So all together, over 50,000 people are on our payroll over the course of the year,” said Krakow.

The JCCs are 80% self-sufficient, meaning that fundraising covers only 20% of the operating budget. “But that, which is typically our strength, became a very substantial challenge for us because when COVID came along, most of the JCCs were compelled to be closed for extended periods,” he said. “And so most of the income from users disappeared entirely.”

And because the summer camp season was so severely affected this summer, which is a significant season for revenue, it creates problems both in the present and in the future, he said.

“We have 25 overnight camps, and all 25 have canceled their summer season because of COVID,” Krakow noted. “We have about 150 day camps. Most of them are operating, but with only a fraction of the number of kids that they usually get.” He mentioned that more than 10,000 employees, which is roughly 25% of the year-round staff, either have been furloughed or laid off.

One significant source of help was the federal loans program. “It brought in over $140 million in cash flow at a tough time, it was very helpful, and that allowed JCCs to continue to employ a significant number of staff for an additional period of time, but that money wasn’t going to last forever,” he noted.

Another source of help came from the Jewish Federations of North America.

Eric Fingerhut, the CEO of JFNA, told the Post that many Jewish organizations made it through the first wave because of the ongoing support of the Federations.

“We powered a system and helped bring in $500 million in federal loans, and locally accelerated our annual allocation and created emergency funds,” he said. “Over 160 million additional dollars were allocated thanks to reserves and endowment, which helped our community survive the immediate hit of the crisis.” •