Thursday, December 22, 2016


Way back in 2013, a Washington Post investigation disclosed that fraud and embezzlement were rampant at 1,000 non-profit organizations of those it had studied. The reporter's conclusion was that this was but the tip of an ugly iceberg,  One might have expected greater diligence within the world of non-profits inasmuch as these disclosures might have caused more intensive lay leader monitoring, greater scrutiny, less secrecy.

But...that was not to be. In fact, within a year after the Washington Post revelations, one New York Jewish organization after another was disclosed to have been victimized by a combination of criminal fraud and lax oversight, the damages not just in the 10's of millions but in the breakdown of the trust so critical to the charitable enterprise. And, the question: have we learned anything from these disasters? Because if you accept my thesis -- that the single-most failing leading to these episodes of corruption and to the breakdown in trust that followed was secrecy coupled to lay leadership's failure to demand accountability -- then the evidence demands that we answer: we have learned nothing. There is not one publication -- be it Guidestar, the National Council of NonProfits or the Trustees of the Indiana University Foundation, to name just three -- that doesn't mandate greater transparency and greater accountability, the opposites of secrecy. One has to wonder what the State of New York Attorney General would require and when.
Friends, the reality is as it has always been: secrecy is the flip side of transparency. A failure on the part of lay leadership to demand accountability, to ignore their fiduciary responsibility to monitor the expenditure of dollars -- that is how the organization's Budget is really expended -- leads inexorably to a breakdown in the trust necessary to success. And, secrecy ultimately leads to organizational failure.

Our Continental organization, the Jewish Federations of North America (you may remember that one), has demonstrated an opacity in its disclosures and in its operations that is incomprehensible. You know the litany of secret deals, among them: million dollar consultant contracts, General Assemblies accounting, naming of new "partners," Dues defaults, conduit deals, and the like. Now, perhaps, in every area the members of the Transactions Committee (chaired by the Board Chair), the Treasurer (also the Budget & Finance Committee Chair) and the CEO know exactly where the money is being spent and for what. But a Board member can't perform the Board Member's fiduciary responsibility if he/she can't "follow the money." And I would submit to you that no voting Board Member of JFNA can "follow the money" if he/she wanted to do so -- for JFNA truly operates in the darkness and claims "confidentiality" in matters that in any other public charity would be transparent and accessible.

The great Rabbinic leader, Rabbi Haskell Lookstein recalled as he looked on as a horrific fire destroyed his treasured Kehilath Jeshrun, it was not the fire or the destruction, it was the future: "When tragedy happens -- and this was a catastrophe, not a tragedy, no one was hurt -- it doesn't help to ask why did it happen, it helps to ask what we're supposed to do next." That's the opportunity available to Richard Sandler and the JFNA Board -- to state once and for all that JFNA will operate in a transparent manner appropriate to its position as a public charity; not to continue to hide its actions behind claims of alleged "confidentiality." It's long past time to open the "books" to the JFNA Board; to disclose: the consultant contracts, which communities are paying less than or none of the Dues that others are paying and the losses suffered on the GA, among other things.

You know I believe that the truth will set JFNA free; why should the federations trust their umbrella organization when that organization doesn't trust them with the truth embodied in the concepts of transparency and full disclosure? Susan Solomon, a lawyer by training, the co-founder of the New York Stem Cell Foundation was recently quoted in The Wall Street Journal: "I'm really comfortable asking dumb questions." Class, please compare and contrast with JFNA where leaders are comfortable asking no questions at all. It's also past time for questions. Isn't it time for secrecy to end once and for all?

JFNA has chosen to operate in its own self-imposed darkness -- that's the same dark curtain that cloaked numerous agencies in New York City, the darkness that produced the corruption at FEGS, at the 92nd Street Y, at the Metropolitan Council on Jewish Poverty, at the New York Legal Assistance Group. It was Justice Louis Brandeis who observed: "Sunlight is said to be the best of disinfectants." JFNA is in need of a whole lot of sunlight.

It's up to JFNA's Board to demand accountability. Do you think they will do so?

Just askin'.



Anonymous said...

Why would JFNA's board demand accountability? From everything we've seen since the current board chair took office, he doesn't. Think the board will rock the boat?

In about 60 hours we light the first candle. Perhaps a 21st century version will bring a miracle of transparency to 25 Broadway. But I wouldn't bet any money on that outcome.

Anonymous said...

Seems like the bigger problem is with UJA New York. They just seem to have scandal after scandal and haven't implemented a single reform. They stack the agency boards with their own lay leaders who are either incompetent or indifferent to proper fiscal oversight. And their own financial and program staff are unable to provide proper oversight either.

Thank goodness it hasn't impacted their fund raising, so they can continue to measure their effectiveness by dollars raised, not dollars spent well.

There are all sorts of lunatic spending projects on top of major agencies that are unaccounted for.

Meanwhile, there has not been a single change in practice since the fraud at MetCouncil and NYLAG and the bankruptcy of FEGS. They weren't even embarrassed that they gave FEGS money for programs that were imaginary in addition to everything else to do with the bankruptcy.

Anonymous said...

Any organization that hides matters behind claims of confidentiality clearly has something to hide. And JFNA must have something to hide. What's with the leadership? Or maybe the better question is is there any leadership at all?

Anonymous said...

Unfortunately, our President-elect is exhibiting the very same qualities. And if he isn't being transparent about his taxes, his businesses, his "philanthropies", or any potential conflicts of interest, that sets a horrendous example for all others.

Anonymous said...

To anon 10:16 Sheesh! Get over it already. You lost and Trump (nor the Obamination or Hillary the felon) have nothing to do with JFNA.

Focus on the problem at hand? Or run for office for the next round of elections

Anonymous said...

And what about all the fraud, corruption and opacity at JAFI?

Is that guy they just arrested in Israel for bribing the Africans and his cohorts on the JAFI board?

RWEX said...

OK, please refocus. There will be no more point-counterpoints with regard to Trump. At some point I will write of my own opinion as to the implications of the Trump Administration for the Jewish Federations but all of you will have to wait until then.


Anonymous said...

At least we can rest assured that when all this blows up in our faces we will have our new "partner" - Israel Trauma Coalition - available to care for us.
By rhe way, where, when and how was it decided that they were our "partners"?

Anonymous said...

It is probably better that this organization is run on a need to know basis so that we can all feel good and believe that all is well.
It's just too bad that it is not true that what we don't know can't hurt us. It can and it will unless somebody wakes up fast!

Anonymous said...

Isn't everything you are writing about illegal under New York State's revised charities laws?

Shouldn't you just reach out to the New York State Attorney General's office and report JFNA for the multiple violations of law that you implicitly hae alleged above?

Just go to

Or write to

and if you are unwilling to do it, and end the need for your blog, perhaps a few of your intrepid readers are not that timid that they will file a complaint

Don't you want your blog to be put out of business because of real reforms?

RWEX said...

Your implicit "remedy" could also be a consequence of "Secrecy..." could it not?

One purpose of this Blog has been to try to inspire the leaders -- lay and professional -- of our organizations to step forward and meet their responsibilities in the hopes that third parties would not ultimately force them to do so.

However it may happen, the end of this Blog will be a blessing for all, and, especially, me.

Thanks for the thoughts.