Monday, March 2, 2015


While The Forward reported that the Jewish non-profit world in New York City was being rocked by scandals and "...are falling like dominoes," New York UJA-Federation seemed to be falling back, at least in part, on the fact that after the first of these corrupt practices was exposed in 2013 -- William Rapfogel's years of thefts and fraud at the Metropolitan Council on Jewish Poverty -- UJA-Federation "drew up new governance guidelines." As if the mere adoption of "governance guidelines" was sufficient to protect the community and donors from the corruption that has overtaken agency after agency ever since. 

A true story: at the time that I was Chair of the United Jewish Appeal Board, I had a meeting with John Ruskay and one of his sitting New York UJA-Chairs at the Federation's offices. when the meeting ended, I took the elevator down with that lay Chair (whose name I will not use in deference to that person's proven commitment to leadership). Making small talk, I asked if this chairmanship was taking up a great deal of the leader's time. I will never forget the response: "Actually not that much. I took the position based on a deal with John -- any time he really needs me, he should call. Otherwise, I've delegated everything to John." My response: "I should have talked to you before I chaired Chicago." It might have just been a funny conversation, meaning nothing, were the potential -- and, indeed, often real -- disastrous results of this laissez faire approach to what are sacred responsibilities so consequential.

Josh Nathan-Kazis, in his excellent in-depth article in The Forward, summarizes the pride of New York UJA-Federation leadership in Guidelines they describe as "best practices," the interlocking nature of New York agency board leadership with that of UJA, and the like. At the end of the day, however, Guidelines are worthless without accompanying accountability and monitoring -- and those two minima just weren't happening in New York. Ask yourselves: in my community, are I...demanding accountability; are I...assuring that lay leadership is playing its fiduciary role vis-a-vis the professional staff or is it -- "they're such great pros, I have total confidence in them. They're my friends."

And, then, of course, there is JFNA...our JFNA. Governance, conflict of interest policy, bright lay leaders lining up for positions, Audit Committees...and disasters just waiting to happen. Do you know how much was spent on consultants last year? $2 million?? $4 million? Who knows? And to whom those contracts were awarded? And on what basis? Do you know how much was spent on...the Global Planning Mistake? (Yes, I have rebranded the GPT as this "GPM.") Do you know who has authorized the creation of 27 staff positions at JFNA-Israel; and how much is spent on them?  Those are just a starter set. Friends, no one is watching the store.

The sorry state of lay oversight at a slew of New York UJA-Federation funded agencies is laid bare in an excellent article by Stewart Ain, "New Fiscal Guidelines Failed to Sound Alarm," in the February 13, 2015 edition of The Jewish Week. ( There are so many lessons to be learned by sifting through the ashes of FEGS, the Metropolitan Council on Poverty, the New York Legal Assistance Fund, the 92nd Street Y, etc., etc., but, of course, those lessons require a lay leadership willing to get their hands dirty in the business of the agencies they fund and, of course, in their own organizations.

There have been many reasons ascribed to the corruption running like an epidemic in the world of Jewish non-profits in New York City but they can be distilled into five words: "a failure of fiduciary responsibility." New York UJA, as Ain underscored, passed serious agency Guidelines which, in some instances, were after the corrupt practices were on-going, and, in all instances, appear to have been nothing more than words on paper. For, as we have written, "Guidelines" are meaningless without constant reference and follow-up and an active and educated laity.

In the New York Jewish media, one respected observer (and Board member) of the New York non-profits appeared to offer, as an excuse for the nonfeasance that has reached epidemic state the complexity of agencies' budgets and operations when funded in part by government resources and in part by the donor community. I think that conclusion offers an excuse that just doesn't ring true. We have way, way too many non-profit Board members who believe their service is nothing more than honorific, requiring them to just "show up" once in a while and smile as if they are actually paying attention. Guidelines are worthless, aren't they, if no lay persons are monitoring the agencies' performance; Guidelines are just words on paper, a checklist if you will, if the laity, charged with the ultimate fiduciary responsibilities, are "leaving it to the professionals" to assure them that "all is well." 

Well, guess what, all is not well...not nearly well. It's long past time for non-profit Board Members to step up and just "do your jobs."



Anonymous said...

All of us in federation work know that when supported agencies fail or there is malfeasance -- even if the agencies are mere grantees -- the likelihood is that federation will be the one suffering the consequences the most serious of which is diminished trust. Therefore, it is federation that must be the one that assures and insures trust through heightened oversight. It seems as if at some point New York UJA-Federation just decided to drop the ball. And no one -- staff or lay or both --is held accountable.

Anonymous said...

It would, IMHO, be a bad move to devolve fiscal oversight to Federations. Federations must demand accountability mechanisms centered in hands on boards of directors coupled with published and legally accepted financial standards. Vigilance begins on the front line of the board of directors.
I would be remiss in not saying that precisely among the direct service staff of the mentioned agencies, from project leaders to supervisors on down, are the best, most effective and most dedicated staff one can imagine. They, their clients and the community at large, have been betrayed and are the true victims of these shandes.

Anonymous said...

Richard, as a NY UJA-Federation Board member I can advise you that about 5 or 6 years ago the then most senior professionals decided that we, as Board members, were just "too busy" with other responsibilities to be "bothered" with oversight of affiliates. Many NY Fed Board members served on those affiliate Boards. The problem with the professionals' decision was two-fold: the NY UJA Board acquiesced in the professionals' decision by silence and just look at the mess we are in now.