Compensation. Let's start with the latest: we learned that in 2007 the CEO was paid (it would be hard to say "earned"), as disclosed in The Chronicle of Philanthropy, $765,000 ...$765,000 -- in salary and fringe benefits. Why? For what exactly? Should someone explain to the UJC Board the potential personal "excess compensation" liability? I believe (and have written) that Federation CEO's should be paid appropriate to their achievements in the manner of a meritocracy. But what could possibly justify this amount for this CEO compared to the work of federation CEO's around the country? How have the federations allowed this to happen? How do they/we permit this to continue? The current Chairs did not negotiate the Contract that provides for this incredible unjust enrichment. That they were stuck with it by their predecessors doesn't require perpetuating it.
Recession...Not for Us. Then, who could possibly believe that in the midst of the worst economic disaster for our nation since the Depression, the federations' national organization has been but a bystander. I know of at least two conference calls convened by federation/foundation leaders in one instance, and federation executives in the other, to which UJC professional representatives were invited. If national intervention and leadership were ever needed, it's now...and this UJC "leadership" sits on its hands or with its collective head in the sand. Could any reader have envisioned that after the federations' investment/waste of $400 million in dues over the nine years of UJC's life, this...this...is the return on investment? I am reminded of the old fund raiser's "joke:" a major donor is asked for his annual gift and protests that his business has failed, his savings are gone and he has lost everything. The solicitor's response: "Just because you're having a bad year, why should we suffer?" UJC's Budget demands are in that vein.
To its credit, on October 20, months after Jeff Solomon had issued a public warning to our system in an op-ed in The Forward, and months after our nation's financial crisis was evident to all, UJC organized its first initiative -- a one hour conference call "UJC/Federation Response to the Economic Situation" convened after a week's prior notice. In the void between the announcement of the meeting and its execution, UJC staffers were scurrying around amassing data and "best practices." The result, a conference call without structure...or hope, and, as it turned out, without substance. The Kanfer and Rieger announced goal was: "to shape a comprehensive contingency plan." I'm sorry, I had always thought a "contingency plan" is something one creates to deal with a possibility of the contingency occurring. Joe and Howard, I have news for you, the "contingency" is here, it's upon us, it's been here. This is the planning that should have been done when Jeff Solomon first wrote about steps to take 9 months ago. These leaders ignored the realities for 9 months; it was a breach of their leadership responsibilities. They were forewarned, time and again, and chose to ignore the warnings, at least in part, because of their antipathy toward the messenger. Shame on them...and shame on us.
UJC could and should show the federations some real leadership. On October 14 I privately offered Joe and Kathy Manning some suggestions that would enable UJC to say "we recognize the financial crisis in which federations find themselves" and suggested UJC take the following steps immediately:
1. We are reducing our Annual Budget by 20% to $30 million. We will do more with less and we will do it better.
2. We will immediately meet with federation lay and professional leaders to prioritize our programs and services. Then, we will eliminate programs and projects which, though critical to our federation owners, are not among the system's highest priorities in light of the economic crisis.
3. We will immediately decrease our investment in UJC Israel by 1/2.
4. We will redirect our lay and professional resources to the Development effort providing our owners with lay leadership solicitation teams, marketing materials and professional assistance and advocacy for the Jewish Agency and JDC.
5. Our UJC senior management earning in excess of $200,000 have agreed to reduce their compensation and fringe benefits by 10% and our President and CEO will reduce his by $150,000.
6. UJC will impose a strict hiring freeze and will freeze all salaries (other than above) at current levels.
Kathy did respond citing UJC Development's efforts to contact those responsible for federation campaigns, get a handle on best practices and ascertain the impact of the economy on campaigns. I plead with Kathy for more, in pertinent part: "...the implications for federations and both local and overseas beneficiaries go far beyond the steps you've outlines (and, certainly, far beyond those steps I have suggested). This is a real opportunity to lead our federations not alone to respond to them in the midst of crisis...This economic meltdown is the financial equivalent of Hurricane Katrina. UJC's response to that catastrophe was exemplary; now is the opportunity to prove the national organization's value once again under your and Joe's leadership." I have heard nothing further from Kathy and, it probably goes without saying, never anything from Joe Kanfer.
The Fall-Out. UJC resisted a budget reduction until pushed, kicking and screaming, by the Large City Executives to absorb a reduction from $40.2 million to $37 million -- still a prodigious amount particularly given the lack of return on investment. But, that's not the end of the story. First, UJC has been "negotiating" for two years with a Large City federation over that federation's inability to pay its Fair Share Dues. The community's most recent request for "hardship" relief was rejected by UJC's Financial Relations Committee this past Spring. Then, the Board Chair personally negotiated a "deal" with the federation leadership. If I understand it correctly, with no process within UJC, no referral to the Financial Relations Committee, the Chairman proposed what is essentially an extended deferral of a substantial portion of UJC's dues back to federation. Would that mean that the deferred amount would be subvented by Chicago's or Palm Beach's dues during those three years? Won't other federations which suffer no hardship now seek similar relief?
And what of a number of our largest federations whose leaders have advised UJC that they have determined that that rgese federations will reduce their Fair Share Dues payments. While the minuscule group of UJC's lay and professional leaders immediately went to plead the UJC case, never has UJC's Financial Relations or Executive Committee or, certainly not, the UJC Board been advised of this escalating Dues crisis? And, should this be a surprise?
And, all of this...this and more...preceded the economic crisis in which we...each of us, our federations...find ourselves today. And, all of this is but the tip of an iceberg that will bring down this Titanic if change is not immediate. What we have hear is a breach of fiduciary responsibility so grievous that in any other circumstance ownership would be obligated to ask leadership to step down...but not us. That is not our way. Better the organization die, better we cease or reduce our dues, better we do nothing.
In these circumstances, I was reminded of an old TV commercial for travelers checks. In an airport departure lounge a character clearly a bad guy is found standing about with a big suitcase. He would walk up to an unsuspecting traveler whose attache case the bad gut noticed was filled with cash was just sitting on the floor next to him. The big case would be very carefully placed over the smaller one, so that the victim didn't notice and, presto chango, the big case would devour the small one and the bad guy would walk away enriched. Clearly the big case was hollow with a false bottom and a pair of pincers inside. When the big case was lifted up, its handle would close the pincers, which grabbed the small case and hid it inside. To me a metaphor for UJC and the federations. Well, anyway, think about it.
Recently the brilliant Conservative columnist and pained Cub fan, George Will, described one Presidential candidate as "...behaving like a rookie in a league too high." Friends, this is the best description yet for the reality of UJC's CEO and Board Chair. Clearly, from their actions, they have been and are out of their league. The enterprise is at risk more than ever.