Saturday, May 8, 2010


While JFNA struggles for relevance, a number of federations seeking hardship or other relief from "fair share" Dues have been told that there will be no "hardship" determination -- instead JFNA will "loan back" the amount of unpaid Dues taking back some promise of future payment or promissory note in consideration. Now none of these federations asked for this treatment; this, they were told, is what you're going to get. This what JFNA calls a "deferred payment plan."

For JFNA there is an account receivable and for the federations in question, an account payable. How many federations; how much has been "lent back," how much has JFNA borrowed using these accounts receivable as collateral? Will JFNA soon be making sub-prime mortgage loans? Where is JFNA getting the money to fund its Budget? And, the ultimate question: is this any way to finance an organization?

Some federations, I have been assured, have received a "payment schedule" with no prior discussion with them. It strikes me that this form of deficit financing was used by New York City during its worst financial crisis -- it almost bankrupted that great city; and is being used by many State governments during the financial crisis. It is bad economics and it is bad policy and just where has this policy been debated let alone approved by a JFNA governing body? (OK, maybe the Financial Relations Committee discussed this approach but who empowered it to create debt?) So, where is Felix Rohatyn when you need him; where will the JFNA "bail-out" come from? When you have a Budget without any revenue assumptions, you have a terrible process -- if it's a "process" at all.

I fear that those federations paying Dues currently are picking up the interest tab for those who are not -- or is it JAFI and the Joint? But my greatest fear is that at the end of the day there will be a large bill for unpaid accounts receivable and the burden will fall on a small number of federations to pay it. Meanwhile, this methodology appears to allow JFNA leaders to assert, in total disingenuity, that "every federation is current on their Dues" and "we have made no deals on Dues." They may have convinced themselves...but that appears pretty easy to do.

Correct me if I am wrong...please.


1 comment:

Anonymous said...

My old man's memory is a bit clouded but this seems analogous to what transpired decades ago when some communities over pleged to UJA and the amount (often in the millions) remained on both parties books until some new auditor, after many years of inaction, forced their client take it off. In those cases the Federation usually, but not always, originally recognized their liability. But in this case what auditor would allow a unilateral accounts receivable to remain on the books?