Several years ago, JDC’s Board of Directors adopted a very detailed and transparent budget process. The goal was to ensure that everyone understood from where we receive our funds and how we spend them. As I have often written, about 80 percent of our funding comes as designated giving. Twenty percent comes as undesignated gifts, subject to the Board’s discretion. Using our ever-decreasing undesignated funds to leverage the designated gifts is critical to our mission.
Staff are now fully involved in preparing a draft budget for 2010 even though we are just five months into 2009. For those new to the JDC budget process, it is as follows:
In January and February of this year, I prepared the CEO’s proposed Global Programmatic Priorities, as well as an estimate of 2010 revenues. The draft document was shared with Irv Smokler and his President’s Advisory Committee (PAC). Once they were in agreement, I presented the priorities to the Executive Committee in March. The Executive Committee discussed all of the issues and adopted the Global Programmatic Priorities. A copy of the priorities was sent to the Board in one of these columns.
The next step in the process is Regional Priorities. Immediately after the March meeting, I share the approved Global Priorities with my senior staff and ask them to prepare Regional Priorities. The Regional Priorities are reviewed in New York, shared with Area Chairs, and then discussed at the May Area Committee meetings. The two sets of priorities (Regional and Global) establish the Board’s policy for planning the actual budget. From May until October, JDC staff, Area Chairs, and the Budget and Finance Committee are involved in the discussions that lead to the preparation of the actual budget document. This is the point where we are today—and it has become extremely difficult for us to project what the undesignated revenues are for both 2009 and 2010.
At the May 2009 meetings, we reduced the amount of money we expect to receive in 2009 from the UJC system by an additional $2 million. Our 2009 budget is now projecting about $37 million from UJC.
Our finance staff, however, has already reported an even greater shortfall than anticipated in UJC funding thus far this year. As most of you know, the majority of federation funding comes to JDC at year end when people pay their pledges. By the end of May 2008, we had received annual campaign funds of $ 7.6 million. In 2009, we have received only $3.4 million for this same period, meaning we are already short $4.2 million in 2009. How can we project what our 2010 annual unrestricted revenue from UJC will be given current data?
The answer simply is we cannot. Last week, in order to ensure our fiscal stability, I met with my senior Hanhalla staff and spent a day developing various scenarios of funding and—based on the goals outlined in the Board-approved Strategic Visioning Report—discussing what programs can be reduced, eliminated or suspended. We also discussed where additional revenue may be found. All program areas were on the table.
The next step will be to meet with lay leadership to discuss and jointly develop options to take to the Board in October. Inevitably, 2010 will be a very tough year for JDC.
We will continue to be proactive and persevere, as we have done for 95 years, through the toughest of times. How often I have reminded you that in the eyes of the Jewish world, we are the lifeline that never fails them. Through two World Wars, through the great Depression, overcoming every obstacle, we are the helping hand that extends and never closes completely. And Irv and I remain confident that we will continue on this path for as long as we are needed.
Until next time,