Change is Challenging

Change. Donor Rights. Reputation. Transparency. Trust. Some of the most important keywords in 2009.

The late Harry Zvi Hurwitz, the Founder and President of the Menachem Begin Heritage Foundation, was a gentleman. He was also a well respected and successful fundraiser. Harry was from the old school – in soliciting donations “trust me” were commonly heard words. Right up until his death, his faithful staff tried to get him to see times have changed.

And change is certainly challenging.

Brandeis University’s decision to close the Rose Art Museum and sell their art collection has been in the news extensively as of late. Their actions, even if the University chooses to backtrack, brought public the overall state of the school’s finances. Leaving aside whether they even had any real choices, they mishandled the pr surrounding the Rose’s closure. More importantly, from everything we know, they did not act in a way that was respectful of donor wishes – so much so the Commonwealth of Massachusetts is reviewing their actions. The University’s reputation, at least in the short term, has taken a serious hit.

If there was any doubt remaining in your mind, in the aftermath of the Madoff tsunami, it is time to bury the “old boys” or “old girls” network way of doing business; including doing away with funneling organizational investments through “connected” firms. Trust, while absolutely necessary, is not the same as “trust me”. Transparency, public accountability (after all these are public organizations) is not only expected but is being demanded by the various stakeholders. The time has come for all to “wake up and smell the coffee”.

Which brings me to Hadassah – the Women’s Zionist organization of America. Established almost 100 years ago, Hadassah has a long and rich history of providing exemplary programs and services both in Israel and the U.S. Lately they’ve stumbled – and the resulting losses from Madoff investments has apparently put an urgency to their restructuring plans. To say they have mishandled their pr is an understatement. But they clearly still do not understand the need to be accountable and transparent with all their stakeholders – including their employees, their donors, their alumni and those who receive services from the various organizations they admirably support.

Back on January 13th, Young Judaea’s leadership wrote a letter to their alumni detailing a long list of changes YJ needed to make in order to come through the present economic downturn. One of the changes under consideration is the sale of the Young Judaean Youth Hostel in Jerusalem. According to the letter,

“Hadassah has been considering the sale of the JYH for over a year, as one option to resolve financial difficulties which have arisen from the operation of the building as a for-profit entity, as required by Israeli law. This consideration is not a reaction to the current world-wide financial crisis, nor to the Madoff situation (though both have exacerbated the urgency of this matter). Rather, it is the result of a thoughtful ongoing process of examining all alternatives.

Any decision on this matter is to be made by Hadassah’s National Board. The Board will address this at its next regularly scheduled meeting in mid- January. It is likely that further information will be available after that meeting. In the interim, the building has been appraised and very preliminary discussions with potential buyers are being held.”

The meeting is long since over. Hadassah has been silent. They have ignored repeated requests for comments about what decisions have been made relevant to the Hostel – which by the way is their standard way of doing business as of late. As the Brandeis actions have shown, at the very least selling off assets may put donors in jeopardy with the IRS. Still they remain silent.

Does Hadassah realize, or do they even care, that in nonprofit board rooms on at least two continents, in coffee shops around Jerusalem (for those not familiar with Israeli culture this should not be minimized) to prestigeous MBA classes, Hadassah is being discussed, disected and looked upon as a model not to follow.

Here’s what we’ve been asking of Hadassah. We feel these are reasonable questions that should be responded to. You be the judge.

  • What decisions were made relative to the Hostel as Rabbi Arian specifically indicated the subject would be addressed at the Atlanta meetings.
  • If the campus is sold how will Hadassah recognize the donors who contributed through “naming rights”.
  • Since this was a capital campaign, there most likely are pledges outstanding. How is Hadassah addressing those pledges.
  • If the campus is sold, what is Hadassah’s policy if a donor requests their gift returned.
  • It has been reported that Young Judaea’s Israel programs budget is being cut by $1 million. What percent of their Israel program budget does this represent.

UJA Federation of Greater Toronto suffered a Madoff related loss of anywhere between $486,000CDN and $5.4 million. In announcing the loss back in December, in fell swoop, they took the opportunity to explain the effect on the Federation, the actions they were taking and even tossed in some good news about their annual campaign. They got ahead of the negative publicity. PR done well.

As Gail Hyman so eloquently wrote several days ago in Bad Times Beget Bad Decisions,

“One bad decision can create an avalanche of woes. One bad economy can make some smart people act unwisely. With all the troubles our institutions face, we cannot afford for them to ignore the basics—treat your supporters well and cherish your reputation like your life depended on it. It does.”

Shabbat Shalom.