UJC takes step towards more layoffs, budget cuts

NEW YORK (JTA) — Under pressure from the federations that it serves, the United Jewish Communities took a step toward implementing an 18 percent budget cut that will include significant layoffs, the second time this year the organization will be forced to enact major personnel cuts.

The budget committee of the UJC, the North American arm of the federation system, approved a plan Monday to reduce the organization’s budget from $37 million this year to $30.3 million in 2009-2010. The cuts will come primarily from the elimination of 31 jobs, the organization’s top professional and top lay leader told JTA.

The cuts became necessary because local Jewish federations have on average seen their annual campaigns significantly drop during the recession, and many federations are making significant budget cuts and staff reductions on their own, UJC officials said in a telephone interview following the budget meeting.

“We surveyed our federations to see how campaigns were going, and a wide array felt that in general the campaigns probably averaged down in the low- to mid- teens,” the UJC’s chairman, Joe Kanfer, said.  “Some are down more than that and some are down not nearly as much. We felt this was an appropriate number given what federations are doing in their own communities.”

The UJC has been anticipating and planning a budget cut for months, given the struggles of the federations that support it with annual dues.

Since the beginning of March, the Jewish federations in New York, Cleveland and Atlanta have laid off between 11 percent and 25 percent of their professional staffs. Each organization cited shrinking donations because of the economic downturn as the reason behind the moves.

Prior to a February powwow of more than 200 federation leaders in Florida to discuss the future of the UJC, a letter signed by several major federations circulated asking the organization to cut its budget, JTA reported previously. But as recently as March 16, the organization’s CEO and president, Howard Rieger, was hoping that the federations would accept a 10 percent budget cut that he proposed in February.

They apparently did not, prompting UJC leadership at some point during the past two weeks to up the proposed cut to 18 percent.

The plan is expected to be considered by the UJC’s executive committee on April 22; if approved, it will be brought before the organization’s general board in June. But layoffs are expected to begin after the late April meeting.

In May 2008, the organization cut its budget from $40.2 million to $37 million, laying off 37 employees in the process.

Since the UJC was formed in 1999 after a merger between the United Jewish Appeal, the Council of Jewish Federations and the United Israel Appeal, the organization has nearly halved its staff; it has reduced its budget from $46.2 million in 1999 to what would be $30.2 million — a huge cut, even before taking inflation into account.

Many of the previous layoffs came from the virtual elimination of the UJC’s missions planning department.

In March, Rieger expressed concern that deeper staff cuts may impinge the organization’s ability to operate. But on Monday, he and Kanfer put on a more positive face.

“There is a lot of efficiency built in here,” Kanfer said. “One of the concepts is that as we serve communities, we are serving them with a staff that can take care of a wide array of their needs. But we think we will improve service by combining fundraising best practices and by consulting with them on community building best practices.”

Some 80 percent of the UJC’s overhead comes in the form of employee salaries and benefits, according to Rieger, but the organization has been looking to cut in other places as well, trimming travel expenses and the like; UJC has been convening meetings with federations in their own regions as opposed to holding big national meetings.

“A $30 million budget is still a significant amount of money,” Rieger said. “But if you look at what we have done over the past two years, we have eliminated 71 positions. Twenty one percent of the work force does not come easy.”

The cuts will be tough, but it will not cripple the organization, despite what some in the media have speculated, Kanfer said. But this will force the organization to look beyond federations for funding.

“I would say that a $30 million organization is hardly a crippled organization,” Kanfer said. “There are two kinds of organizations: Those turning the lights down and only focusing on cost cutting, and those focusing on greater and greater innovation. We obviously will not have as many dollars as we have, but we will seek partnerships with foundations, and we are talking with various communities willing to pay more money … We are not going to give up on our aspirations to be innovative.”