Thursday, February 20, 2014


Even before Hadassah Hospital filed for bankruptcy, friends in Israel and friends here engaged with Hadassah were telling me that Hadassah "leaders" were playing a dangerous game to preserve their power while putting one of Israel's most treasured resources at risk. Imagine that -- putting a treasured institution at risk in a desperate effort to protect their positions.

As Dan Brown wrote in despair and anger in
"Hadassah WZOA is a tiny shadow of its former self. Not because of Madoff -- remember, after the legal settlement Hadassah still had a net gain of tens of millions of dollars on Madoff -- but because of gross mismanagement in the U.S. and of Hadassah Medical Organization here in Israel. Hadassah WZOA has sold off or scuttled everything. Everything. Young Judea and all its camps; their education and any programming; so many of its offices and staff; and its Israel properties -- save the hospitals. There's nothing left..."
And, in the midst of an organizational and management disaster, Hadassah's fundraising in North America continues with no disclosure of Hadassah leadership's role in the catastrophic circumstances in Israel (because it "wasn't our fault") and its leaders continue to oversee an endowment of in excess of $500,000,000. Yes, these "leaders" apparently have determined that the Hadassah endowment corpus to be used only in emergencies (or designated by donors) will not be used in a manner sufficient to save Hadassah Hospital.

Hadassah "leaders" in America and Israel have stepped forward in lockstep to defend...themselves, I guess. (For the most recent finger-pointing, see Their decisions, their actions, their negotiations, but not ours. They seem to believe that Hadassah donors will continue to fund Hadassah operations and management that have placed the organization's most important asset and most visible symbol of donor commitment at absolute risk along with the organization itself -- while they seek a Government of Israel bailout. These "leaders" apparently believe that Hadassah is "too big to fail;" that, pushed to the brink, the Government will rescue Hadassah from itself. Here is what Marcie Natan's letter to donors about the bankruptcy filing asks of Hadassah supporters:
"HWZOA’s position is clear; we will support HMO and do our part to help see it through the restructuring process. It is our expectation that HMO’s other stakeholders – the Government of Israel, the unions, the university and the hospitals creditors and suppliers will join us in that effort."
And then it asks its donors and supporters to sign a petition to the Government of Israel asking for that bailout. Nowhere...nowhere...does Ms. Natan or Hadasssah explain let alone take responsibility for the circumstances that have led Hadassah to the doors of Israeli bankruptcy. Instead, in its letter to its "members" Ms. Natan asserts:
"And like that crisis that faced America’s car companies, the financial challenges confronting HMO have no single root cause. Rather, this crisis is the result of dynamics that have been building for years including unsustainably low reimbursement rates for services; unaffordable union contracts; and unrealistic commitments to the university who trains their students and conducts research at HMO facilities."
And two weeks ago The New York Jewish Week published its article "Hadassah Says Administrators Overspent" -- yep, these "leaders" "blamed the mounting debt on administrators who were not forthcoming." Uh huh, sure.

Yep, not our fault -- theirs, theirs and theirs. This finger-pointing is characteristic of other organizations which are sliding toward disaster. 
There are so many reasons Jewish organizations fail. Hadassah is not unique -- where the lay leaders are in such thrall of the professional leaders, the chances for irresponsible actions multiply exponentially. Yes, mutual respect is critical, but obeisance is not. The lay-professional partnership is vital to Jewish organizational success...but that presumes that leaders know that their roles have limits set by the fiduciary responsibilities imposed upon both lay and pro.

So, what is required here? A few thoughts:

  • A constructive trust must be imposed on the Hadassah endowment so that responsible parties will be in charge not those who have placed Hadassah in this crisis (oh, I forgot, not their fault);
  • The Officers of Hadassah should resign en masse and be succeeded by those whose vision is not impaired by their attachment to the failures of the present and recent past;
  • The chief professional officer, who has led the organization during this disaster, must go; and
  • New leadership must take responsibility for the organization's survival.
The scariest quote in Steve Ain's article in The New York Jewish Week  on the subject is the assertion by Hadassah President Natan:" We will continue to be the majority on the Board (of the Hospital) I anticipate that in the end the hospital will come out of this...stronger for having reigned in excesses."

To continue down the disastrous path the current leadership has taken Hadassah would doom this historic charity to the scrap heap. What a shame that would be.



Anonymous said...

While your suggestions make total sense, I have to question your last suggestion that a new group of leadership needs to take over. That's the big problem. Why would new leaders even consider this? There are so many other worthy causes to get involved with why would someone volunteer to "go down with the ship" so to speak? The volunteer leadership probably won't come from another organization but rather from within. In the for profit world if an organization faces the problems that Hadassah faces it seems to me that it is easier to find someone who for the right amount of financial reward to take on the recovery. In fact, judges can often appoint trustees.

If you disagree with this perhaps it would be helpful to identify some of the reasons that others might take on this task. If you agree that this solution ultimately is not workable then would you agree that perhaps it is better to let the volunteer organization fold, let the hospital itself recover and restructure under proper leadership and eventually to re-create the volunteer side with new professional leadership that will re-build a voluntary organization. In other words, perhaps Hadassah Hospital is too large to fail, but clearly Hadassah the fundraising organization is not too large to fail.

RWEX said...

While I do believe that a set of committed lay leaders could be found to serve as "Trustees" for a finite period -- women and men who might welcome the challenges presented by this mess, your points are well-taken and much appreciated

paul jeser said...

Times of Israel piece:

Anonymous said...

The fine people who have run Hadassah into the ground continue to point their fingers at every one in the vicinity. Do they have any responsibility at all for the unfunded pensions that amount to tens of millions? The defense sounds like something from a Comedy Show -- "we knew nothing."