JDC, Jewish Agency mull more cuts

The blog was quiet yesterday because I was working on this:

NEW YORK (JTA) — The North American Jewish federation system’s overseas partners are warning of a brewing financial crisis facing the organized Jewish community in the former Soviet Union.

Steven Schwager, the chief executive officer of the American Jewish Joint Distribution Committee, and Irv Smokler, its president, sent a joint letter last Friday to the top professionals at Jewish federations across North America saying the JDC was in dire need of more money from them. The JDC, which focuses its efforts in the former Soviet Union on delivering social services and community-building activities, is facing a significant budget deficit, according to the letter. The organization already has had to cut services overseas, specifically in the former Soviet Union, and it might have to cut more, the letter warned.

The federations’ other overseas partner, the Jewish Agency for Israel, which focuses on formal Jewish education and Jewish identity building in the former Soviet Union, also appears to be facing major challenges. In a previously undisclosed internal report in May, the Jewish Agency’s treasurer informed the organization’s executive committee that programming in the former Soviet Union might have to be abandoned due to severe budget constraints.

The combination of cuts to both formal Jewish education and social services could significantly undermine what has been a 20-year process to build up Jewish life in the former Soviet Union since the fall of Communism.

“It looks brutally bad for next year,” Schwager told JTA. “Everywhere around the country where I talk to my federation colleagues, they talk about how bad it is locally and about local need. The purpose of the memo was to say, ‘Hey guys, we are a global community and a hungry Jew is a hungry Jew. Let’s get together to mount a national effort.’”

The deficit means that the JDC has had to cut services. Whereas it once was able to serve some 220,000 poor elderly in the former Soviet Union, helping them with food, medical supplies and other social services, it has had to cut off 60,000 recipients.

Much of its services are carried out by 290 local Heseds, social service organizations that the JDC set up with local volunteers on the ground. Schwager said that it will have to close at least 20 of those Heseds in the coming year.

The situation with the Jewish Agency is a little less clear, but perhaps more dire.
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In November 2008, the agency passed a budget that included $45 million in cuts, with much of the savings coming from programs in the former Soviet Union. The agency slashed $1.9 million from its Jewish Identity budget for the region, leaving just $431,000.

The agency has also reduced its funding of Heftsibah, a partnership with the Israeli Education Ministry that includes a network of 44 Jewish day schools across the former Soviet Union with more than 10,000 students. Heftsibah had its budget cut in November from nearly $13 million to just over $5 million. Now the budget is slated to be $2.6 million for the coming school year.

If the agency carries out its next scheduled round of cuts for 2010, it will have reduced its overall budget by about $80 million over the past several years. Agency officials say the cuts have come uniformly around the world, but unlike other regions where local donors have been able to pick up some of the slack, the Jewish Agency has been unable to find local philanthropists in the former Soviet Union willing to do so.

In May, the organization’s treasurer, Hagai Meirom, issue a report chronicling what he saw on the ground in the region. The report, a copy of which was obtained by JTA, paints a drastic picture of the agency, portraying it on the verge of bankruptcy in the region. It stated that the agency was either withdrawing from or significantly cutting a number of programs in the area.

Other Jewish Agency acknowledge that significant cuts are being implemented, but they downplayed the report.

“Haggai Meirom’s letter today is not relevant,” a spokesman for the agency told JTA. “He wrote it as a personal report. He wrote what he felt in his gut feeling. He is entitled to his view.”

According to Alan Hoffmann, the director of the agency’s education department, the agency’s education work in the region is continuing, though on a much smaller scale. While Meirom expressed doubts that the agency would be able to run its camps this summer, it did end up servicing 6,000 children — well short of the 13,000 who took part two summers ago, but a far cry from shutting down.

Heftsibah, which was indeed on the brink of collapse several months ago and WAS taken over at one point by the Israeli government, is back in the agency’s hands. It is slated to open at the beginning of September with the help of Israeli government funding and some local funds.

Jewish Agency officials say the organization’s new chairman, Natan Sharansky, the former Soviet dissident, will be able to improve the situation. He is set to visit Moscow on Aug. 31-Sept. 2 for the start of the school year and assess the situation. It will be his first international visit since taking office this summer.

“Sharansky is now the chairman,” the spokesman said. “It is significant that his first big visit is to Moscow, which means that the Jewish Agency is taking this situation seriously.”

A spokesman for the United Jewish Communities, the federation system’s umbrella group, said that the UJC shares the concern about the budget challenges facing JDC and the Jewish Agency.

“For a long time we have been strong advocates with all of our overseas partners for overseas needs,” the spokesman said. “We share their concern over these pressing needs and we think it is their obligation to bring these to the attention of the federations.”

Formal Jewish education in the region is very much imperiled. Aside from the Jewish Agency cuts to Heftzibah, the school system of Chabad — perhaps the biggest Jewish player in the region — is hurting. It has been heavily financed by Lev Leviev, the diamond mogul who saw his stock plummet by 90 percent, losing him a half a billion dollars over the past year. Another school system, Shma Yisrael, which had been heavily financed by the Reichmann family of Canada, also is dealing with financial difficulties.

The Heftsibah, Chabad and Shma Yisrael systems all received $12 million in aid from the International Fellowship of Christians and Jews, an organization that raises money from evangelical Christians to support Israeli and Jewish causes.

There is a debate about how many Jews still remain in the former Soviet Union, with estimates ranging from 450,000 to few million. Regardless of the exact number, any shortage of service is a lost opportunity to connect Jews to their people, Schwager of the JDC said.

"Organized Jewry reaches about 600,000 Jews in the former Soviet Union,” Schwager said. “That means there are about 900,000 Jews who survived 70 years of Communism and 20 years of freedom and have still not connected to the Jewish people. I don’t think that we can afford to lose close to 900,000 Jews, and everyone pulling out right now doesn’t help."