Wednesday, January 5, 2011


If JFNA has lost its Line of Credit, does anyone care? I think so. Things like this don't just happen; a bank only cancels or refuses to renew lines of credit for reasons -- a refusal of borrowers to accept egregious loan covenants, banks insistence on greater collateral to support the credit, etc., etc. If one sets aside the reasons (which appear to be in total dispute), the fact appears to be -- JFNA has lost its multi-million dollar line of credit.

As I reconstruct things, it appears that JFNA's banks were sending negative signals back in the Fall -- as early as October. But JFNA wasn't telling anyone...anyone. The reason for that seems clear (clear through the fog of opacity) -- "we can handle this at the staff level." But it appears that JFNA couldn't. Many of us have experience at this level -- in our practices, in our non-profit Board work. We weren't called upon, of course. No one outside of a small, tightly-drawn group of leaders was to know. And within sixty days the line of credit appears to have been lost. No disclosure to the federations; none to JFNA Board. I will leave it to you to decide if the line was lost whether there was a violation of fiduciary duty or merely a sense that "if we just shut our mouths, G-d will provide."

So what, you ask? Well, the Board Chair, at the last Board meeting, in a moment of rare public candor acknowledged that during the calendar year JFNA "borrows" from federations' monthly allocations for overseas needs without notice to JAFI or JDC, the intended beneficiaries, and always with the intent...the "intent," mind "true up" at calendar year-end using federation year-end cash payments to do so -- and if those cash payments fell short? "We'd use our line of credit, of course, to make JAFI and JDC whole." And, if there is no line of credit? Well then: "Greensboro, we have a problem."

Hearing this whole thing from pros in New York was quite a surprise. Then hearing more from Jerusalem -- all the more so. Knowing that JFNA is not disclosing any of this to anyone...another blanket of secrecy like the winter snow has fallen...that's not a surprise at all. Can JFNA's leaders confess error -- they hate confessing error more than anything -- and turn once again to New York, Chicago, Cleveland, Baltimore in abject desperation once again? Before they do so (if they haven't already)...they had better engage the best people to do so, and go back to the banks...and do so NOW! Murphy's law rules again.


1 comment:

Jewish Philanthropy News and Views said...

For JFNA's response see