As USCJ advances into year two of implementing our Strategic Plan, we can take great pride in many of the programmatic and people achievements in year one, including: the commencement of our new multi-tiered SULAM leadership development program; the adoption of an entirely new governance system; the hiring of several key senior level professionals; the work of a movement-wide commission developing a new educational paradigm for our children; and the finalization of a new Strategic Plan for the Fuchsberg Center. More than 90% of the milestones targeted for year one of the Strategic Plan have been successfully completed!!
Another of USCJ’s greatest accomplishments in the past twelve months has been advancing philanthropy from approximately $450,000 in FY 2011 to $1.5 million in cash for FY 2012! An additional $300,000 of board and other pledges have already been received for FY 2013. This success story also highlights the financial needs and challenges that we face if we are to achieve many major goals of our Strategic Plan.
More specifically, the key to our financial capacity to address many strategic plan mandates and outcomes during the next 24-36 months is achieving the following benchmarks:
- Increasing annual philanthropy to between $4 million and $5 million annually;
- Stabilizing annual dues payments from kehillot at $8.0 million or more;
- Boosting participation in USY and Kadima and revising the funding structure of those programs;
- Significantly increasing the financial independence of the Fuchsberg Center with the assistance of a more independent board at the Center, so as to also reduce the costs of our Israeli operations that are absorbed by USCJ as a whole; and
- Achieving a balanced operating budget.
Going forward, we will keep you updated on these matters, including through articles in this “Leadership Update”. Below I address in greater detail some of the financial fundamentals summarized above.
I. Philanthropy secured on an annual basis by USCJ must grow to between $4 million and $5 million by FY 2015.
The “scorecard” from FY 2012 is encouraging, as we estimate that we have collected about $ 1.5 million, comprised of:
For the year ahead, our budget is predicated upon raising total restricted and unrestricted philanthropy of $2.6M. In addition we are pursuing fundraising efforts for KOACH in the amount of at least $130,000.
Critical to achieving such philanthropic goals for FY 2013 is:
- securing 10-15 new board members, and increasing other Board giving;
- reorganizing the development department at USCJ, to include enhanced “firepower” to identify, research, connect and build relationships with major givers;
- beginning to build our USY alumni association as an important source of revenue; and
- Creating a culture of philanthropy at all levels of USCJ.
While such results for FY 2012 are encouraging, they represent only the beginning of the needed growth in philanthropy.
II. Stabilizing Dues Revenue from Our Kehillot
The dues collected from our kehillot in FY 2012 totaled $7,634,000—$328,000 less than the FY 2011 collections, and $416,000 below our FY 2012 budget projections. Our dues collections in FY 2012 were almost exactly what we took in 10 years earlier (in FY 2002), and they were 22% less than we received five years earlier (in FY 2007).
USCJ’s leadership and staff are in the midst of an evaluation of all aspects of the connections, systems and processes involving dues collection from our kehillot, and will issue an action plan for FY 2013 dues collections in the next few weeks. Simply, the stabilization of dues from our kehillot at $8.0 million or more is critical to USCJ having the resources to help kehillot, as envisioned under our Strategic Plan.
III. Revising Participation and Revenue Trends at all of USY District and 820 Programs
Over the past three years, due in part to the economic downturn, the net program revenues before overhead and full-time personnel costs from our well-established and highly effective USY programs have declined by more than 30%. Although beginning to rebound, our attendance at USY’s major programs – USY on Wheels, Pilgrimage, NATIV, and regional programs – have declined from their peak years before the recession. In FY 2013, we will look for way to boost the appeal of USY programs, with game plans to be developed for building upon the traditions and transformative impact of such programs.
IV. Achieving a Balanced Budget
We do not yet have a final figure for the operating deficit in the fiscal year that just ended. We had budgeted a deficit of about $800,000, and it is likely to end up at least that large because of the weak dues collections. (USCJ incurred operating deficits of several hundred thousand dollars in each of the previous two fiscal years.) The Board approved a budget for FY 2013 which projects an operating deficit of $493,000 on revenues of $12.3M. Such operating deficits are before the costs of certain Fuchsberg Center debt and other charges. After several years of using reserves to fund operating deficits to deal with an economic downturn affecting our youth programs and many synagogues and to jumpstart the new USCJ organizational structure and needed program initiatives under the Strategic Plan, we need to bring the budget into balance in the near future.
All of the factors described above in this update are directly relevant to balancing the budget. The most important factor will be our ability to generate additional philanthropic giving. Also important is aggressively continuing to reduce non-personnel operating expenses at all levels of USCJ in an annual amount of $400,000 to $500,000; half of such savings have already been achieved in the FY 2013 budget.
As we reshape USCJ and its financial pillars to meet the imperatives of our Strategic Plan, we do so with great confidence that the partnership between our dedicated lay leadership and professional staff will make a critical difference.
— Jerry Herman
Chief Operating Officer