As the saying goes, “There are no easy answers.”
I hope that through the past 36 weekly emails I have conveyed with you my desire for dialogue, input, and the exchange of new and different ideas. This week’s email, which is slightly longer than most, will hopefully provide you with greater insight into the challenging decision-making processes of Federation. I am sharing with you important information about how Federation will allocate our charitable dollars in the upcoming fiscal year which begins on July 1.
During the past four months, Federation (meaning an active group of community-minded volunteers and dedicated professionals) has gone through its annual allocations process. This process makes decisions on where your charitable dollars, via our Annual Campaign, will go to enable the incredible network of agencies to provide worthwhile programs and services. This email will provide background information that will enable you to fully understand the difficulty in making this year’s decisions – because in the end – everything to enhance Jewish life is important.
Please note that in this email you will not find the specific allocations to each agency. They will be in the next issue of the Jewish Review newspaper. We just released the information to the agencies and want them to have time to share with their full leadership.
This year, there were several key financial challenges impacting the allocations decision-making process:
· Federation made a decision to use $300,000 from total resources for new and innovative programs through our Community Impact Grants (CIG). I am pleased to tell you that the recipients will be announced publicly on June 13 th .
· Federation welcomed two new partner agencies into the allocations process, Greater Portland Hillel (previously funded through a three-year start-up grant from Federation’s unrestricted endowment) and B’nai B’rith Camp.
· Federation absorbed the cost of the PJ Library program (formerly at the Oregon Jewish Community Foundation) at a net of $37,500 per year.
· Perhaps most importantly, last year, Federation went into its own reserves and used $253,000 in non-recurring budget savings to help maintain allocations at previous levels.
The above changes created a $625,000+ shortfall in funds just to maintain flat allocations for next year.
Despite these challenges, Federation took the following proactive steps to increase the available allocable dollars:
· Federation reduced its own operating budget by $150,000 and reduced its subsidy to the Jewish Review by $40,000.
· Federation has raised, to date, $115,000 towards the new Community Impact Grants funding. We are grateful to the Zidell Family Foundation for their generous matching challenge grant.
· In addition, Federation found other cost savings that provided an additional $50,000 more for allocations.
With these steps and others, the Allocations Committee was faced with $232,000 less in allocable dollars than the year before. Believe me, no one wants to see less dollars go to our agencies for the critical work that they do.
I want to be clear, the $300,000 for Community Impact Grants did not impact agency allocations due to a combination of additional donations and budget savings (see bullets above). The real challenge and impact comes from the $253,000 in one-time funding from our reserves.
Despite that large loss in funding, I am excited that through our financial resource development efforts and cost-savings efforts, Federation will be putting $100,000+ more into our community – money that will be allocated in a different way.
What was the decision making process? The Allocations Committee understood that general allocable funds to our partner agencies were down while requests for funding were up significantly. Recognizing that every dollar represents a value to the Jewish community, the committee’s decision making was guided by Federation’s mission as applied to the following priority areas:
1. Caring for the vulnerable – received 46% of total allocable dollars
2. Providing quality Jewish education – received 21% of total allocable dollars
3. Furthering outreach and engagement – received 18% of total allocable dollars
4. Sustaining core programs and services in Israel and Overseas – received 15% of total allocable dollars
In addition, agencies were evaluated individually on the basis of the following criteria:
· Impact -- providing a unique service and demonstrating vision and imagination;
· Reach -- numbers served, collaboration, and inclusiveness; and
· Organizational structure -- fiscal responsibility, capacity to deliver and fulfillment of the mission.
If more funds become available through the generosity of our community, they will be allocated according to the above criteria.
The Federation is committed to the long-term success of our partner agencies. To that end, the board agreed in principle to also set aside funds (in an amount to be determined from our unrestricted endowment) to hire a “capacity-building consultant” to work with those agencies that are in need of assistance.
As I have shared from the beginning, our community may have to take a “short-term loss for a long-term gain.” During difficult economic times this is not easy to do (just look at what is going on at all levels of government). I am convinced that if we do not look at new ways to reach our broad and diverse community, we will have fewer and fewer people connecting to Jewish life in the future. This will impact all our agencies, our synagogues, and our communal infrastructure far more than today’s allocations. “Business as usual” can no longer be our mantra. That is the rationale behind our Community Impact Grants.
As I shared with the Governing Board of the Federation, I am proud of how we managed the allocation process, created the new Community Impact Grants, found efficiencies in Federation’s budget, and the collective thinking behind our decisions. You should be, too! It takes bold leadership and a willingness to look into the future. We are truly moving the community forward in a way that will meet the diverse needs of 2011 and beyond.
I am grateful to the community volunteers and my professional colleagues for their time, effort, energy, compassion, and passion. These are challenging times and not easy decisions. It is a process like this that makes me wonder -- what would King Solomon do?
I look forward to your thoughts and feedback.