Special Report

Making Do
With Less

Agencies brace for decreases as Federation
deals with General Fund shortfall.

HARRY KIRS BAUM

StaffWriter

E

annan Lis begins his presi-
dency of the Jewish
Community Center facing
an 8 percent drop-off in
support from the Jewish Federation,
Detroit Jewry's philanthropic overseer.
This Federation reduction has
brought JCC staff layoffs
and other expense cuts, but
Lis knows the JCC is not
alone.
"We had to tighten our
belt and reinvent our opera-
tional philosophy," said Lis,
whose agency maintains a
$10 million budget. "We are
Lis
sharing the burden and the
pain with the rest of the
community."
In addition to a $1.6 million _alloca-
don from the 2003 Annual Campaign,
Federation also awarded the JCC a sup-
plemental $200,000 for operations. In
2002, the JCC recieved a $1.8 million
allocation and a $200,000 supplement.
"The supplement is in recognition of
the extraordinary burden that the JCC
takes on for the community in operat-
ing this 300,000-
square-foot building
that is used by every-
body," said Mark
Davidoff, Federation
executive director and
chief operating officer.
The JCC is seeing the
fruits of facility
improvements, part of a
Davidoff
$35 million capital and
endowment campaign.
The upgrades are expected to lower the
JCC's dependence on Federation by
spurring more revenue from member-
ships, programs and fees.
"They are doing what they need to be
doing. Their projections are pretty
much on track," said Federation

Related editorial: page 27

7/18
2003

16

President Lawrence Jackier.
Federation faces a $6.2 million short-
fall in revenue in its General Fund for
the fiscal year beginning June 1, necessi-
tating budget adjustments.

Wide-Ranging Cuts

Allocation cuts generally ranging from 4
to 11 percent to Federation constituent
agencies are mainly the result of
a flat 2003 Campaign and
dwindling unrestricted reserves
in the General Fund. Some per-
centages were higher: the
Neighborhood Project was
phased out; the Agency for
Jewish Education was realigned
into the Alliance for Jewish
Education; and the Michigan
Jewish Conference consolidated
some operations.
On June 26, Federation's Board of
Governors approved the budget devel-
oped by its staff for
allocating the
$34.5 million in
pledges made dur-
ing the 2003
Campaign. After
fund-raising costs
and uncollected
pledges, nearly $30
million was avail-
Jackier
able to allocate.
The 2003 Campaign pledges were
$30.25 million, the same as last year
and $1.075 million less than the goal.
The Stephen and Nancy Grand
Challenge Fund for urgent needs in
Israel and Detroit raised $4.25 million,
$250,000 more than its goal, but $2.75
million less than the $7 million raised
for the Israel Emergency Fund in 2002.
The Grand Challenge was a special fund
of one-time gifts matched dollar for dol-
lar by the Grands.
"Last year, we had a Campaign that
will end at roughly $34.5 million,
which is possibly the second-best cam-
paign achievement in our history,"

Jackier said. "Yet, we had to go through
this pain. People are trying to under-
stand how this can be."
In 2002, the Federation tapped into
more than $6 million in unrestricted
reserves to supplement Campaign allo-
cations and further enrich communal
programs and services. Over the past
five years, those reserves have fallen from
$70 million to $20 million because of
supplemental allocations and a bearish
investment market.

Back To Basics

*We had gone through a whole period
of time where we were able to use, in
very effective and appropriate ways,
community reserves to provide even
greater levels of service to needy con-
stituencies in our community," Jackier
said.
"Now we've come back to under-
standing, because of the virtual lack of
reserves, that we don't have a choice but
to live within the Campaign achieve-
ment."
He added: "We have to go back to a
culture that existed in the mid-1980s,
where we live off the Annual Campaign,
where the needs we fund and the cost
associated with that rely solely on the
Campaign."
The available cushion is about $5.9
million based on an anticipated unre-
stricted reserve base of $14.1 million.
Hints of budget troubles surfaced last
summer, when Federation told agencies,
which received a 1 percent increase
across the board the year before, to
strategize should reductions occur.
Discussions continued, with specifics
developed between February
and April, a time that Jackier
called "gut wrenching."
Agencies also have seen United
Way and government funding
cut.
Federation's focus now
includes helping agencies corn-
bine efficiencies, move forward
and stay productive.

By The Numbers

Of the $30 million available
from the 2003 Campaign,
Israel and Overseas received
allocations of $13.9 million, a
reduction of 30 percent. Local
and national agencies received
allocations of $16.2 million, a
reduction of 12 percent.
Page
Jewish day schools received
an across-the-board cut of 5
percent.
The Alliance for Jewish Education
saw a 21 percent reduction, or about

$338,000, that includes its absorption
of the Agency for Jewish Education and
the resulting operational efficiencies and
refinements.
Jewish Family Service's reduction was
4.5 percent. The JVS reduction was 6.5
percent, Jewish Home and Aging
Services', 15 percent.
Federation gave priority to Jewish
education and support services for the
low-income frail elderly, said Linda Z.
Klein, chair of Federation's Planning
and Allocations Steering Committee.
Federation also decided that the largest
reduction of the budget and implemen-
tation plan — $750,000 — would
come in the first year of the three-year
plan.
"Based on the information we have,
we still have an additional $1.1 million
to cut between Federation and its agen-
cies over the next two years," Klein said.
"What can make the difference in
whether we have to cut more as
planned, or hopefully, we can forestall
cuts, is the Annual Campaign."

The Human Cost

Some 70 staff members of Federation
and its member agencies have been laid
off since April.
Some Federation agencies have seen
increased workloads as well as funding
cuts because of the tough economic
times.
"We acknowledged the direct impact
of people not only losing their jobs
within the system, but also losing their
jobs throughout the community," said
Howard Neistein, Federation's chief
planning officer.
Th e n the Jewish Fund
stepped in. The foundation of
well over $50 million was
started with the proceeds from
the 1997 sale of Sinai
Hospital to the Detroit
Medical Center.
Jewish Fund grants totaling
$500,000 went to four
Federation agencies to offset
the $500,000 pullback in
funding, to bolster the
increased workloads and to
offer assistance to jobless
agency workers and others.
WS will receive a grant of
$200,000; $150,000 will go
to Jewish Family Service (JFS)
to support its temporary assis-
tance program; $60,000 is
earmarked for a Jewish Home
and Aging Services guardian-
ship program; and $90,000 is to facili-
tate medical services and pharmaceuti-
cals for indigent clients referred by JFS