It was inevitable that even those most in denial among JFNA's lay leaders would come to the conclusion we reached months ago -- that JFNA is facing a mounting budgetary crisis brought on by a continuing lack of relevance and a failure by a growing number of federations to pay Dues. I have reported on these pages the "avoidance technique" developed by this leadership that enabled them, in their minds, to deny that there was "any problem" with Dues payments. Let's look at the "technique" again.
The economic circumstances facing so many federations caused them (and others) to make informal hardship requests of the JFNA Financial Relations Committee. These federations were told that given the volume of these requests, JFNA would not offer "hardship" (even though that is what the Financial Relations Committee was charged to do under the JFNA-adopted Dues Resolution) but instead what came to be known under JFNA jargon as "a deferral." If you couldn't pay your Dues or objected to the amount, the difference between what you could/would pay would be "deferred" -- evidenced by a promissory note and/or a payment plan. In some instances, JFNA would help a federation reconstruct its fund raising results so as to result in a reduced Dues amount. In other instances, JFNA leaders let federation leaders know that JFNA Dues had a priority over overseas allocations -- and that "membership" was more important than funding those of our people most in need. In all events, "deferrals" multiplied.
You will recall that JFNA lay and professional leaders operated under one assumption -- that by each calendar year-end, all Dues would be paid. JFNA's annual spend rate was based on that assumption. Even had reserves been created, it is doubtful that the reserves would have approached the amounts of the deferrals at calendar year-end 2010. Even though I and others warned that the day would soon come when there would be no year-end "catch up," we were ignored, the mounting evidence notwithstanding.
This "deferral technique" not only allowed JFNA leaders to misstate the true circumstances -- "we have no Dues issues...no federation hardship requests have been made" -- it allowed them to ignore the reality of the organization's failing cash flow...until now. All the years of denials to the contrary notwithstanding, the Board Chair has admitted that JFNA has applied federation transmittals for JAFI/JDC to JFNA's budget, "truing up" at year end. Those days have to be over.
At no time were there mid-year corrections, operating budget reductions -- JFNA blithely ignored the facts and spent itself into the financial crisis in which it now finds itself. It would be fair to ask where the money was coming from? A line of credit or "as a loan" out of overseas allocations? Either way, where was the accountability and where was the monitoring?
With no advance warning, the JFNA Budget and Finance Committee was confronted with this financial crisis of the moment at its recent meeting. While that Committee has some excellent federation members, it has also been populated with the usual JFNA cheerleaders -- those never afraid to speak up in support of failed plans. Six years ago, while the now Board Chair served as Chair of Budget and Finance, I recommended that the membership of the Committee be reorganized to consist solely of sitting Federation Chairs and CEOs arguing that only in that way would a strongly supported Budget emerge from the JFNA "process." The rejoinder -- I was "rotated off" the Committee (not only for that suggestion), replaced by a past Chair of a far smaller community. The Committee was not repopulated with sitting Federation Chairs and CEOs (that might have eliminated the then Budget Chair and successors now that I think about it) but with fine people some of whom are not even members of their own federation Boards.
Now you may have some members of the JFNA Budget and Finance Committee who believe that those on the Committee take an oath that their Federations will pay their Dues -- there are probably others who believe in fairies. JFNA leaders state that they will assure that JAFI and JDC are made whole at year's end by eating into the JFNA line of credit themselves if necessary -- did it ever occur to this small group to apply the line of credit to meet the organization's monthly requirements so as to to avoid this reckoning? What is needed remains as true now as it has always been -- transparency and real lay engagement in the Budget process (you know, an open meeting with questions permitted) -- and a Budget that demonstrates the synchronicity of JFNA's Budget with federations needs. How great would that be? How about trying it?
There was a cartoon The New Yorker at year-end that is appropriate to this discussion. Two middle-aged men sitting at what is clearly a corporate Board or Committee meeting. One says simply: "Sage nodding got me where I am today." That's not leadership; but it's what we've got. Nod sagely if you agree.