American Friends Yad Eliezer

MISSION:
“American Friends of Yad Eliezer (AFYE), www. yadeliezer.org
provides financial aid and support to Yad Eliezer. Yad Eliezer,
founded in 1980, is the largest anti-hunger agency in Israel. Yad
Eliezer's mandate is to help families cope with financial
difficulties and to empower them to break through the cycle of
poverty and achieve self-sufficiency. Our objective is to combat
poverty at its root, through an array of programs that provide
critical short-term relief, while facilitating long-term recovery.
Each component of Yad Eliezer's comprehensive welfare system
- nationwide distribution of essential food, clothing and household
items, job training, and adolescent mentoring programs - contributes
toward economic recovery and social development.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AFYE has an overall rating
of four stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AFYE based on
990 tax returns through fiscal year 2007:

Overall Rating ****
Organizational Efficiency: Program Expenses 95.7%
Administrative Expenses 0.7%
Fundraising Expenses 3.4%
Fundraising Efficiency $0.03
(AFYE spends 0.03 to raise $1.)
Efficiency Rating ****

Organizational Capacity:
Primary Revenue Growth 15.2%
Program Expenses Growth 17.8%
Working Capital Ratio (years) 0.20
(AFYE can sustain itself for 0.20 years
without generating new revenue.)
Capacity Rating ****

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its CEO, Sori Tropper, was $0. For
purposes of comparison, compensation for Ruth Messenger,
the President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.

As of fiscal year 2007, AFYE had net assets of $2,120,539
(up from 1,445,855 in 2006) and total assets of $2,120,539
(up from $1,450,501 in 2006.) AFYE had investments of
publicly traded securities of $1,241,340 (990 Tax return –
line 54a) and it had investments of other securities of $0
(line 54b). AFYE had cash non- interest bearing
investments of $829,620 (line 45) and savings and temporary
cash investments of $0 (line 46.) It had pledges
receivable less allowance for doubtful accounts of $0
(line 48b.) AFYE had fixed assets of land, buildings and
equipment less accumulated depreciation of $48,870
(line 57c) and other investments of $0 (line 56.)


FINANCIAL TRANSPARENCY EVALUATION:
According to our PET (Philanthropy Economic Transparency)
Index, this blog’s financial transparency rating
system of information provided by the nonprofit on its
own website, AFYE has a transparency rating of 4 stars
(6 stars is the highest rating.) Of the following six
items, AFYE provide items 3, 4, 5 and 6 of the following
metrics on its website:

1) The nonprofits most recently filed 990 tax return
2) The nonprofit’s audited financial statement
3) The nonprofit’s annual report
4) An annual statement of achievements in each of the
three main programs supported by the nonprofit
5) A breakdown of the nonprofit’s expenses
6) The nonprofit’s rating from Charity Navigator


DISCUSSION:
As of fiscal year 2007, AFYE was a financially
efficient nonprofit with high organizational capacity.
Though AFYE had no direct exposure to Madoff
investments, the downturn on Wall Street will cause
its donors to reduce their support. As of fiscal year
2007, a larger percentage of its net assets (57%) were
in publicly traded securities and a smaller percentage
(38%) were in safe liquid assets; this aggressive
investment strategy combined with its poor working
capital ratio of 0.20 years will make it difficult for
AFYE to continue to provide support for social and
job training services in Israel.


RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street
and Madoff scandals, has also affected the relationship
between donor and non-profit. The turmoil has caused
donors to become uncertain and more selective in giving to
non-profits. Non-profits that are transparent about their
finances will regain the lost trust of its donors sooner than
those non-profits that are not transparent about their
finances. Though AFYE is financially transparent in that it
does disclose financial information on its web site, in order
to reach out to more selective donors, AFYE should be even
more transparent about its finances. AFYE should provide
an audited financial statement and its most recently filed
tax return on its web site.

AMIT

MISSION:
“Founded in 1925, AMIT is the world's leading supporter
of religious Zionist education and social services for
Israel's children and youth, nurturing and educating Israeli
children to become productive, contributing members of
society. Our more than 70 schools and programs constitute
Israel's only government-recognized network of religious
Jewish education, incorporating academic and technological
studies. These also include youth villages and facilities
for children in foster care. At present, AMIT's more than
20,000 children come largely from impoverished and/or
dysfunctional families; significant numbers are new
Ethiopian and Russian immigrants, as well as young people
of Sephardic backgrounds.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AMIT has an overall rating
of three stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AMIT based on
990 tax returns through fiscal year 2007:

Overall Rating ***
Organizational Efficiency: Program Expenses 79.6%
Administrative Expenses 13.1%
Fundraising Expenses 7.2%
Fundraising Efficiency $0.06
(AMIT spends 0.06 to raise $1.)
Efficiency Rating ****

Organizational Capacity:
Primary Revenue Growth 20.0%
Program Expenses Growth -8.5%
Working Capital Ratio (years) 0.92
(AMIT can sustain itself for 0.92 years
without generating new revenue.)
Capacity Rating ***

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Executive Vice President, Arnold Gerson,
was $287,158 which was 3.58% of expenses. For purposes
of comparison, compensation for Ruth Messenger, the
President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.

As of fiscal year 2007, AMIT had net assets of $17,798,411
(up from 17,487,511 in 2006) and total assets of $19,998,800
(up from $19,420,466 in 2006.) AMIT had investments of
publicly traded securities of $3,128,290 (990 Tax return –
line 54a) and it had investments of other securities of $83,772
(line 54b). AMIT had cash non- interest bearing
investments of $1,033,960 (line 45) and savings and temporary
cash investments of $3,541,875 (line 46.) It had pledges
receivable less allowance for doubtful accounts of $12,500
(line 48b.)AMIT had fixed assets of land, buildings and
equipment less accumulated depreciation of $10,580,195
(line 57c) and other investments of $0 (line 56.)

PET (Philanthropy Economic Transparency) Index:
According to this blog’s financial transparency rating
system of information provided by the nonprofit on its
own website, AMIT has a transparency rating of 3 stars
(6 stars is the highest rating.) Of the following six
items, AMIT provide items 1, 2 and 4 of the following
metrics on its website:
1) The nonprofit’s Charity Navigator rating
2) A breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy

DISCUSSION:
As of fiscal year 2007, AMIT was a financially
efficient nonprofit with high organizational capacity.
Though AMIT had no direct exposure to Madoff
investments, the downturn on Wall Street will cause
its donors to reduce their support. As of fiscal year
2007, a small percentage of its net assets (17%) were
in publicly traded securities and a larger percentage
(25%) were in safe liquid assets; this conservative
investment strategy combined with its good working
capital ratio of 0.92 years will help AMIT weather
the Wall Street meltdown and allow it to continue to
provide support for educational and social services
in Israel.


RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street
and Madoff scandals, has also affected the relationship
between donor and non-profit. The turmoil has caused
donors to become uncertain and more selective in giving to
non-profits. Non-profits that are transparent about their
finances will regain the lost trust of its donors sooner than
those non-profits that are not transparent about their
finances. Though AMIT does provide financial information
on its web site, in order to reach out to more selective donors,
AMIT should be even more transparent about its finances.
AMIT should provide an audited financial statement and its
most recently filed tax return on its web site.

American Friends Alyn Hospital

MISSION:
“American Friends of ALYN Hospital (AFAH), www.alynus.org
supports Israel's premiere rehabilitation center for physically
disabled children, adolescents and young adults. ALYN Hospital
combines expertise and love so that each patient and family can
meet the challenges of living with disabilities and achieve the
highest possible level of mobility and independence. ALYN
Hospital, established over 50 years ago, is one of the world's
leading specialists in the active and intensive rehabilitation
of children with a broad range of physical disabilities and is
the only facility of its kind in Israel. The Hospital currently
has 93 beds for hospitalized patients, 100 beds for day-care
treatment and specialized out patient clinics which receive over
10,000 patient visits a year.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AFAH has an overall rating
of three stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AFAH based on
990 tax returns through fiscal year 2006:

Overall Rating ***
Organizational Efficiency: Program Expenses 84.2%
Administrative Expenses 4.1%
Fundraising Expenses 11.5%
Fundraising Efficiency $0.13
(AFAH spends 0.13 to raise $1.)
Efficiency Rating ***

Organizational Capacity:
Primary Revenue Growth 17.0%
Program Expenses Growth 5.2%
Working Capital Ratio (years) 1.71
(AFAH can sustain itself for 1.71 years
without generating new revenue.)
Capacity Rating ****

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Executive Director, Cathy Lanyard,
was $206,615 which was 5.85% of expenses. For purposes
of comparison, compensation for Ruth Messenger, the
President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.

As of fiscal year 2008, AFAH had net assets of $5,450,214
(down from 7,176,198 in 2007) and total assets of $5,508,989
(down from $7,219,210 in 2007.) AFAH had investments of
publicly traded securities of $3,524,025 (990 Tax return –
Part X: Balance sheet line 11) and it had investments of other
securities of $0 (line 12). AFAH had cash non- interest bearing
investments of $745,598 (line 1) and savings and temporary
cash investments of $0 (line 2.) It had pledges receivable
of $0 (line 3.) AFAH had fixed assets of land, buildings and
equipment less accumulated depreciation of $0 (line 10c) and
other investments of $0 (line 13.)

According to this blog’s financial transparency rating system
of information provided by the nonprofit on its own website,
AFAH has a transparency rating of 0 stars (6 stars is the highest
Rating.) Of the following six items, AFAH did not provide any
of this information on its website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy

DISCUSSION:
As of fiscal year 2006, AFAH was a financially
efficient nonprofit with high organizational capacity.
As of fiscal year 2008. large percentage of its assets,
64%, were in publicly traded securities; this explains
why its net assets took a hit of 24% reflecting the
meltdown on Wall Street. meltdown. Though AFAH had
no direct exposure to Madoff investments, the downturn
on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.71 years,
will help i t limit the amount it will have to reduce its
support of the ALYN Hospital in Israel.


RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street
and Madoff scandals, has also affected the relationship
between donor and non-profit. The turmoil has caused
donors to become uncertain and more selective in giving to
non-profits. Non-profits that are transparent about their
finances will regain the lost trust of its donors sooner than
those non-profits that are not transparent about their
finances. In order to reach out to more selective donors,
AFAH should be more transparent about its finances. AFAH
should provide additional financial information on its web site.

American Jewish Joint Distribution Committee

MISSION:“Since 1914, the American Jewish Joint Distribution Committee (JDC), www.jdc.org, has given global expression to the principle that all Jews are responsible for one another. Working today in over 70 countries, JDC acts on behalf of North America's Jewish communities and others to rescue Jews in danger, provide relief to those in distress, revitalize overseas Jewish communities, and help Israel overcome the social challenges of its most vulnerable citizens. JDC also provides non-sectarian emergency relief and long-term development assistance worldwide.” (Quote from Charity Navigator)

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org) America’s leading charity evaluator, JDC has an overall rating of four stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of JDC based on 990 tax returns through fiscal year 2007:

Overall Rating ****
Organizational Efficiency: Program Expenses 92.2%
Administrative Expenses 6.4%
Fundraising Expenses 1.2%
Fundraising Efficiency $0.01
(JDC spends $0.01 to raise $1.)
Efficiency Rating ****

Organizational Capacity:
Program Revenue Growth 7.1%
Program Expenses Growth 7.2%
Working Capital Ratio (years) 1.53
(JDC can sustain itself for 1.53 years
without generating new revenue.)
Capacity Rating ****

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Chief Executive Officer, Steven Schwager,
was $431,654 which was 0.17% of expenses. For purposes
of comparison, Ruth Messenger, the President of the
American Jewish World Service, was $218,625 which
was 0.76% of expenses. These are both extremely low
percentages for a nonprofit to pay its chief executive.

As of fiscal year 2007, JDC had net assets of $379,673,951
and total assets of $474,991,928. JDC had investments of
publicly traded securities of $337,787,541 (990 Tax return –
line 54a) and it had investments of other securities of $0 (line
54b). JDC had cash non- interest bearing investments of
$64,486,725 (line 45) and savings and temporary cash
investments of $11,482,486 (line 46.) It had pledges receivable
less allowance for doubtful accounts of $22,642,102 (line 48c.)
JDC had fixed assets of land, buildings and equipment less
accumulated depreciation of $24,292,621 (line 57c) and other
investments of $0 (line 56.)

According to this blog’s financial transparency rating system
of information provided by the nonprofit on its own website,
JDC has a transparency rating of 1 star (6 stars is the highest
Rating.) Of the following six items, JDC provided only its
Charity Navigator rating on its website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy

DISCUSSION:
As of fiscal year 2007, JDC was a highly financially
efficient nonprofit with high organizational capacity.
A large percentage of its assets, 71%, were in publicly traded
securities that have since taken a 30-40% hit from the Wall Street
meltdown. Another 5% of its assets were in pledges
receivable of which JDC discounts 21% for doubtful
accounts; this optimistic expectation will not be realized.
Though JDC had no direct exposure to Madoff investments,
the downturn on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.53 years, will
help it limit the amount it will have to reduce its support other
nonprofits.

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and
Madoff scandals, has also affected the relationship between donor
and non-profit. The turmoil has caused donors to become uncertain
and more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors,
JDC should be more transparent about its finances. JDC
should provide additional financial information on its web site.

A Nonprofit Financial Transparency Rating System

Mark Bane, the Chairman of the Orthodox Union Board of
Governors, wrote an article in the current issue of Jewish
Action entitled “The Financial Restructuring of the American
Orthodox Community.” In the article Bane states that many
Jewish nonprofits remain “oblivious to the bleak new economic
realities.” If corporate CEOs failed to respond to these new
realities, their actions would constitute a breach of fiduciary
duty to shareholders and creditors. Nonprofit leaders do not
have these fiduciary responsibilities, but their failure to
respond to the crisis indicates that they are not acting in a
responsible manner in the allocation of the Jewish community’s
limited resources.

During a credit crunch, lenders to business demand greater
transparency and accountability. Nonprofit donors are the
equivalent to lenders to business and they will also demand
increased financial transparency and greater accountability of
how their dollars are being used.

These demands, rather than being problematic, are actually an
opportunity for well managed nonprofits. Bane stated that
“…significant donors are likely to be even more generous when
they observe their money being used in a responsible manner.”

What should nonprofits do to better respond to donors’ growing demands for additional financial information? Bane proposed that nonprofits should have a uniform standard for reporting their financial information.

Following is a possible uniform standard for reporting financial information that would allow donors to compare the transparency of different nonprofits. This system is similar to the donor friendly four star system used by Charity Navigator for evaluating nonprofit efficiency and capacity. For each parameter provided on the nonprofit’s website, the nonprofit would receive one star. A nonprofit that provided each of the following financial parameters on its website would receive a six star rating.

Provided on nonprofit’s website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy

This transparency system would allow a donor to conclude that a
nonprofit with a five star rating is more transparent, and acting more
responsibly, than a nonprofit with a three star rating. Bane believes that not only would this system help the donor, but it would help the well managed nonprofit as donors are more likely to be more generous with the more transparent nonprofit.

American Committee Shaare Zedek Medical Center

MISSION:
“The American Committee for Shaare Zedek Medical
Center (ACSZ), www.acsz.org, in Jerusalem provides
financial support, services and equipment for the Shaare
Zedek Hospital in Jerusalem in order to support health
care, research and nursing programs in all branches of
medicine. Founded in 1902, Shaare Zedek has been
known as the Hospital with a Heart for more than a
century. Patients have consistently streamed to our
hospital, seeking top level treatment in a compassionate,
supportive and nurturing environment. Today, while our
reputation as the most exceptional hospital for health care
treatment continues to grow, Shaare Zedek has taken its
commitment to its patients to the next level by providing
industry leading, cutting-edge medical care.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)America’s leading charity evaluator, ACSZ as an overall
rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of ACSZ based on 990 tax returns through fiscal year 2007:

Overall Rating **
Organizational Efficiency: Program Expenses 76.0%
Administrative Expenses 7.0%
Fundraising Expenses 16.9%
Fundraising Efficiency $0.14
(ACSZMC spends $0.14 to raise $1.)
Efficiency Rating **

Organizational Capacity:
Program Revenue Growth 2.9%
Program Expenses Growth -4.1%
Working Capital Ratio (years) 1.70
(ACSZMCcan sustain itself for 1.70 years
without generating new revenue.)
Capacity Rating **

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Executive Vice President, Paul Glasser,
was $226,173 which was 1.19% of expenses. For purposes
of comparison, Ruth Messenger, the President of the
American Jewish World Service, was $218,625 which
was 0.76% of expenses.

As of fiscal year 2007, ACSZ had net assets of $28,331,359.
ACSZ had investments of publicly traded securities of
$18,873,338 (990 Tax return – line 54a) and it had
investments of other securities of $0 (line 54b). ACSZ had
cash non- interest bearing investments of $1,839 (line 45) and
savings and temporary cash investments of $2,652,470
(line 46.) It had pledges receivable less allowance for doubtful
accounts of $11,230,530 (line 48c.) ACSZ had fixed assets
of land, buildings and equipment less accumulated
depreciation of $44,630 (line 57c) and other investments of
$647,961 (line 56.)

DISCUSSION:
As of fiscal year 2007, ACSZ was a moderately financially
efficient nonprofit with moderate organizational capacity.
A large percentage of its assets, 64%, were in publicly traded
securities that have taken a 30-40% hit from the Wall Street
meltdown. Another 39% of its assets were in pledges
receivable of which ACSZ discounts less than 1% for doubtful
accounts; this optimistic expectation will not be realized.
Though AMSZ had no direct exposure to Madoff investments,
the downturn on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.70 years, will
help it limit the amount it will have to reduce its support of the
Shaare Zedek Medical Center.

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and
Madoff scandals, has also affected the relationship between donor
and non-profit. The turmoil has caused donors to become uncertain
and more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors,
ACSZ should be more transparent about its finances. ACSZ
should emulate the transparency of the American Jewish World
Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of
its investments.
3) It should provide its Charity Navigator rating.
4) It should provide a pie chart breakdown of its expenses.
5) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.

Next Week’s Blog: Introduction of a non-profit financial
transparency rating sytem.

Ohr Somayach

MISSION:
“Ohr Somayach International (OSI), www.ohr.edu provides religious, educational and charitable aid to North American and Israeli institutions. OSI began over thirty years ago as a response to the desire of a handful of young people who wanted to learn more about Judaism. It quickly grew to be not only a sensitive respondent to the needs of the Jewish community, but an active initiator of new and innovative educational programs around the world. OSI involvement in mass media has included Shma Yisrael magazine; film, radio and television programs; slide shows and video productions; computer software; and a series of books and publications entitled Jerusalem Echoes. These endeavors have helped crystallize and project OSI as an innovative force in Jewish education."


FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, OSI has an overall rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of OSI based on 990 tax returns through fiscal year 2007:

Overall Rating **
Organizational Efficiency: Program Expenses 95.4%
Administrative Expenses 1.6%
Fundraising Expenses 2.8%
Fundraising Efficiency $0.02
(OSI spends $0.02 to raise $1.)
Efficiency Rating ****

Organizational Capacity:
Program Revenue Growth 0.9%
Program Expenses Growth -5.0%
Working Capital Ratio (years) 0.07
(OSI can sustain itself for 0.07 years
without generating new revenue.)
Capacity Rating *

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Director, Rabbi Pinchas Kasnett, was $110,958 which was 2.08% of expenses. For purposes of comparison, Ruth Messenger, the President of the American Jewish World Service, was $218,625 which was 0.76% of expenses.

As of fiscal year 2007, OSI had net assets of $660,993. OSI had investments of publicly traded securities of $88,310 (990 Tax return – line 54a) and it had investments of other securities of $31,104 (line 54b). OSI had cash non- interest bearing investments of $29,178 and savings and temporary cash investments of $246,081. It had pledges receivable less allowance for doubtful accounts of $0. AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $45,716. OSI has notes and loans receivable (line 51b) of $477,000 of which $469,000 is in the name of Procidine Inc.

DISCUSSION:
As of fiscal year 2007, OSI was highly financially efficient nonprofit. However, OSI has a limited organizational capacity. A large percentage of its assets are in a non-liquid note receivable (Procidine Inc.) and it has a working capital ratio of 0.07 years. Though OSI had no direct exposure to Madoff investments, the downturn on Wall Street may cause its donors to reduce their
support of OSI. OSI will probably be forced to reduce the amount
of funding it provides to its target programs; if the downturn persists
for a long term, OSI may have difficulty continuing to function.

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors, OSI should be more transparent about its finances. OSI should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) Since a large percentage of its assets are connected to Procidine Inc. OSI should be transparent about the identity of Procidine Inc.
4) It should provide the fact that it has earned a four star efficiency rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.

Next Week’s Blog: American Committee for Shaare Zedek Medical Center

American Jewish World Service

MISSION:
“Established in 1985, the American Jewish World Service (AJWS) is an international development organization motivated by Judaism's imperative to pursue justice. AJWS is dedicated to alleviating poverty, hunger and disease among the people of the developing world regardless of race, religion or nationality. Through grants to grassroots organizations, volunteer service, advocacy and education, AJWS fosters civil society, sustainable development and human rights for all people, while promoting the values and responsibilities of global citizenship within the Jewish community.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AJWS has an overall rating of three stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of AJWS based on 990 tax returns through fiscal year 2007:

Overall Rating ***

Organizational Efficiency: Program Expenses 81.6%
Administrative Expenses 7.9%
Fundraising Expenses 10.4%
Fundraising Efficiency $0.10
(AJWS spends $0.10 to raise $1.)
Efficiency Rating ***

Organizational Capacity:
Program Revenue Growth 27.1%
Program Expenses Growth 37.8%
Working Capital Ratio (years) 0.47
(AJWS can sustain itself for 0.47 years
without generating new revenue.)
Capacity Rating ****

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its President, Ruth Messinger, was $218,625 which was 0.76% of expenses. Percentage wise, the 0.76% is a very low figure compared to the compensation paid to other nonprofit executives.

As of fiscal year 2007, AJWS had net assets of $15,957,924. AJWS had investments of publicly traded securities of $16,220,897 (990 Tax return – line 54a) and it had investments of other securities of $0 (line 54b). AJWS had cash non- interest bearing investments of $2,009,272 and savings and temporary cash investments of $1,117,491. It had pledges receivable less allowance for doubtful accounts of $2,903,893 (AJWS assumed there would be no doubtful accounts, that is, it assumed it would collect 100% of the monies pledged.) AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $2,353,514. In fiscal year 2007, AJWS operated with an excess of $2,075,612.

DISCUSSION:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. During today’s present credit crisis, corporations must meet harsher requirements of transparency and accountability demanded by its creditors and lenders. In similar fashion, nonprofits need to provide their donors with increased financial transparency and accountability in order for the donors to responsibly allocate their diminished resources.

AJWS is the gold standard for nonprofit financial transparency. Until a uniform standard of financial reporting is accepted by all nonprofits, AJWS is the model of financial reporting that other nonprofits should emulate. AJWS recently provided its 2008 (fiscal year ended December 31, 2008) financial report (completed on May 14, 2009 by the accounting firm of McGladrey & Pullen) on its website. In providing this important information with such alacrity, AJWS is demonstrating its integrity to its donors and supporters. AJWS, like the rest of the world, suffered a financial hit in 2008. Its net assets dropped from $15,957,924 to $13,505,608; this represents a loss of approximately 15%. This drop resulted from a loss of investment income (both realized and unrealized losses) of $3,392,516. Admittedly, this financial information is negative and diminished funds will negatively impact AJWS’ ability to fund all of its expenses. However, donors are likely to be more generous, not less generous, when they learn that their money is being used in a responsible manner.

UJA Federation of New York

MISSION:
UJA-Federation of New York (http://www.ujafedny.org)
"cares for those in need, rescues those in harm's way,
and renews and strengthens the Jewish people in New York,
in Israel, and around the world. We reach out to the poor,
the elderly, and people in need, providing social and
humanitarian services in New York and around the world;
connect communities worldwide by aiding Jews in distress
and by strengthening and sustaining Jewish communities
from Belarus to Buenos Aires; and we support programs
to make Jewish education more meaningful, to deepen
Jewish identity, and to recruit and train dynamic
professionals to serve the community."

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator,
(http://www.charitynavigator.org)/
America’s leadingcharity evaluator, UJAFNY has an overall rating of four stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of UJAFNY based on 990 tax returns through fiscal year 2007:

Overall Rating ****
Organizational Efficiency: Program Expenses 79.2%
Administrative Expenses 6.9%
Fundraising Expenses 13.8%
Fundraising Efficiency $0.14
(UJAFNY spends $0.14 to raise $1.)
Efficiency Rating ***

Organizational Capacity:
Program Revenue Growth 10.8%
Program Expenses Growth 11.7%
Working Capital Ratio (years) 2.68
(UJAFNY can sustain itself for 2.68 years
without generating new revenue.)
Capacity Rating ****

Organizational Capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more likely
to sustain its programs and services over the long haul.

Compensation for its Executive Vice President and CEO, John Ruskay was $428,000 which was 0.17% of expenses. Percentage wise, the 0.17% is a very low figure.

As of fiscal year 2007, UJAFNY had net assets of $1,070,066,000. UJAFNY had investments of publicly traded securities of $519,275,000 (990 Tax return – line 54a) and it had investments of other securities $438,208,000 (line 54b); the attached Securities Schedule (page 89 of the tax return) described most of this amount, $378,238, as Alternative Investments. UJAFNY had cash non- interest bearing investments of $7,736,000 and savings and temporary cash investments of $80,650,000. It had pledges receivable less allowance for doubtful accounts of $91,070,000. UJAFNY had fixed assets of land, buildings and equipment less accumulated depreciation of $77,212,000. In fiscal year 2007, UJAFNY operated with an excess of $30,208,000.

DISCUSSION:
As of fiscal year 2007, UJAFNY had a working capital ratio of 2.68 years. with approximately 10% of its net assets in liquid investments. Though UJAFNY had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Since less than 10% of its net assets are in the form of pledges, the Madoff scandal will have minimal affect on UJAFNY’s ability to fund its programs. However, since a large portion of its net assets were in the form of securities, and since most investment portfolios took a hit of at least 33%, UJAFNY will be forced to reduce the amount of funding it provides to its target programs.

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors, UJAFNY should be more transparent about its finances. UJAFNY should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) It should provide its complete fiscal year 2007 financial statements, not an abridged statement.
4) It should provide the fact that it has earned an overall four star rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
6) It should provide information that its CEO is compensated at a rate that is a very small rate of expenses and that he took a cut in pay in the past year.


Next Week’s Blog: American Jewish World Service

Jewish National Fund

MISSION: “Founded in 1926, the Jewish National Fund (JNF) www.jnf.org America has been a vital part of Zionist history, achieving its goal of purchasing the land that would become the State of Israel, helping to develop that land into a thriving nation, and protecting Israel's environment. Over the past century, JNF has planted over 240 million trees, built over 180 dams and reservoirs, developed over 250,000 acres of land, created more than 1,000 parks throughout Israel and educated students around the world about Israel and the environment. As a global environmental leader focusing on Israel, JNF is committed to improving the quality of life for all who live in the Middle East.”

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, JNF has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of JNF based on 990 tax returns through
2007:
Overall Rating: Four stars ****
Organizational Efficiency:
Efficiency Rating: Four stars ****
Program Expenses: 84.3
Administrative Expenses: 7.3%
Fundraising Expenses: 8.2%
Fundraising Efficiency: $0.08
(JNF spends $0.08 to raise $1.)

Organizational Capacity:
Capacity Rating: Four stars ****
Primary Revenue Growth: 9.3%
Program Expenses Growth: 14.9%
Working Capital Ratio (years): 0.49
(JNF can sustain itself for 0.49 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Chief Executive Officer, Russell Robinson, was $302,531 which represents 0.67% of expenses. For comparison purposes, compensation for the President of the American Jewish World Service, Ruth Messinger, was $191,000 which represents 0.79% of expenses. Percentage wise, these are very low figures for nonprofit organizations.

As of fiscal year 2007, JNF had net assets of $52,752,456. JNF had
investments of publicly traded securities of $15,192,853 of which 36% was invested in riskier common stock. JNF had cash non-interest bearing investments of $2,084,077 and savings and temporary cash investments of $1,192,902. It had pledges receivable less allowance for doubtful accounts of $20,629,568. JNF had fixed assets of land, buildings and equipment less accumulated depreciation of $3,939,984. In fiscal year 2007, JNF operated with an excess of $5,088,616.

JNF also runs a donor advised fund program and made grants from these donor advised funds of $710,800.

DISCUSSION:
As of fiscal year 2007, JNF had a working capital ratio of 0.49 years with approximately 1/3 of its net assets in liquid investments. 38% of
its net assets are in the form of pledges receivable after allowing for a 25% rate of doubtful accounts. Though JNF had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Thus, in the present economic environment, JNF will experience a higher rate of doubtful accounts.

Accordingly, JNF will not be able to fund all the programs that it has in the past; JNF will have to reduce all of its expense with a concomitant decrease in organizational capacity.



RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors, JNF
should be more transparent about its finances.
JNF should provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
4) It should provide information explaining what it means to have
an overall four star rating from Charity Navigator.

Next Week’s Blog: American Jewish World Service

Friends of AKIM USA

MISSION:
Friends of AKIM USA (FAU), www.akimusa.org provides funding
for AKIM Israel. AKIM is an acronym for the Hebrew words
which, translated, means Association for the Habilitation of the
Mentally Handicapped in Israel. AKIM, founded over 54 years
ago, is the largest organization in Israel caring for mentally
handicapped, Down Syndrome and developmentally disabled
children and adults. Over 30,000 mentally handicapped and
120,000 members of their families benefit from these services.
AKIM cares for all Israelis, including Christians and Moslems in
need of AKIM services. AKIM's early intervention and follow
through eases the burden for families, providing real hope for the
future for mentally handicapped infants and children.

FINANCIAL EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, FAU has an overall
rating of one star (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of FAU based on 990 tax returns through
2006:
Overall Rating: One star *
Organizational Efficiency:
Efficiency Rating: One star *
Program Expenses: 67.2
Aministrative Expenses: 16.7%
Fundraising Expenses: 15.9%
Fundraising Efficiency: $0.13
(FAU spends $0.13 to raise $1.)

Organizational Capacity:
Capacity Rating: One star *
Primary Revenue Growth: -12.8%
Program Expenses Growth: -13.0%
Working Capital Ratio (years): 1.47
(FAU can sustain itself for 1.47 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Executive Director, James Knee, was
$51,923 which represents 9.4% of expenses. For comparison
purposes, compensation for the President of the American Jewish
World Service, Ruth Messinger, was $191,000 which represents
0.79% of expenses.

As of fiscal year 2006, FAU had net assets of $832,665. FAU had
investments of publicly traded securities of $0 and cash non-interest
bearing investments of $251,398 and savings and temporary cash
investments of $0. It had pledges receivable of $521,596. FAU had
fixed assets of land, buildings and equipment less accumulated
depreciation of $3,976. In fiscal year 2006, FAU operated with an
excess of $97,794. It was able to award a grant of $338,100 to AKIM
Israel.

As of fiscal year 2007, FAU had net assets of $510,952. FAU had
investments of publicly traded securities of $0 and cash non-interest
bearing investments of $197,492 and savings and temporary cash
investments of $0. It had pledges receivable of $251,596. FAU had
fixed assets of land, buildings and equipment less accumulated
depreciation of $2,291. In 2007, FAU operated at a deficit of $321,713. It was able to award a grant of $413,150 to AKIM Israel.



DISCUSSION:
1) As of fiscal year 2007, FAU had 37% of its total assets in liquid
cash investments. This is less than what FAU needs for one year’s administrative and fundraising expenses. 48% of its total assets were
in the form of pledges receivable with no allowance for doubtful
accounts. In the present economic environment, FAU will not be able
to count on these pledges, thus, FAU will have difficulty surviving the
present economic downturn.
2) In 2007, FAU operated at a deficit of $321,713. In spite of this
deficit, in 2007 FAU actually increased its support of AKIM Israel.
Continuing this support may be difficult in the current economic
downturn. FAU will have much difficulty realizing its commitment
to AKIM Israel. It cannot continue to function at a deficit.
3) ANY had no exposure to Madoff investments.
4) FAU’s mission statement says that it helps over 30,000 “mentally
handicapped” persons are benefiting from AKIM Israel. In fiscal year,
FAU gave $413,150 to AKIM Israel. This works out to a little less
than $15 per person. It is misleading for FAU to say that it is helping
the “mentally handicapped.”

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors, FAU
should be more transparent about its finances.
FAU should provide the following information on its web site:
1) It should provide its three most recently filed tax returns.
2) Since FAU has done a superb job in keeping most of its assets in
cash, it was probably able to avoid taking a big hit in its total assets.
Accordingly, FAU should provide its investment philosophy and
a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
4) FAU must update its website. The last news event on its website
was an event held in July, 2007.
5) Donors who want their giving to help the mentally challenged
of Israel should consider giving their money to Ezer Mizion.
Ezer Mizion helps the Israel’s sick and disabled and has received
an overall four star rating from Charity Navigator. Such a
donation would be a more efficient and effective use of donors’
giving dollars.

Next Week's Blog: Jewish National Fund

AISH HaTorah New York

MISSION:
Aish New York (ANY), www.aishny.com provides cutting-edge
social and learning opportunities for young Jewish professionals
in New York City in a warm, welcoming, and open atmosphere.
Whether you want business networking events, a crash course in
Hebrew, Jewish wisdom for living, or the Israel adventure of a
lifetime, Aish New York offers you access to more of the value
in being Jewish. Since 1974, Aish has been dedicated to
revitalizing the Jewish world by reintroducing Jews everywhere
to their heritage. Today it is a dynamic, rapidly expanding Jewish
social and educational network committed to a worldwide
renaissance of the Jewish people.

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, ANY has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of ANY based on 990 tax returns through
2006:

Overall Rating: Four Stars ****
Organizational Efficiency:
Efficiency Rating: Three stars ***
Program Expenses: 89.6%
Administrative Expenses: 5.5%
Fundraising Expenses: 4.8%
Fundraising Efficiency: $0.10
(ANY spends $0.10 to raise $1.)

Organizational Capacity:
Capacity Rating: Four stars ****
Primary Revenue Growth: 1.9%
Program Expenses Growth: 15.2%
Working Capital Ratio (years): 1.44
(ANY can sustain itself for 1.44 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Executive Director, Kenneth Greenman,
was $143,823 which represents 2.41% of expenses. For comparison
purposes, compensation for the President of the American Jewish
World Service, Ruth Messinger, was $191,000 which represents
0.79% of expenses.

As of fiscal year 2006, ANY had total assets of $10,311,117. Of
this figure ANY had investments of publicly traded securities
of $0, cash-non-interest bearing investments of $339,298 and
savings and temporary cash investments of $8,852,169. It had
pledges receivable of $0. ANY had fixed assets of land, buildings
and equipment less accumulated depreciation of $941,977. In fiscal
year 2006, ANY operated at a deficit of $2,642,724.

As of fiscal year 2007, ANY had total assets of $11,189,280. Of
this figure ANY had investments of publicly traded securities of
$161,842, cash-non-interest bearing investments of $348,925 and
savings and temporary cash investments of $8,625,984. It had
pledges receivable of $0. ANY had fixed assets of land, buildings
and equipment less accumulated depreciation of $1,921,502. In
fiscal year 2007, ANY operated with an excess of $912,800

Its 990 2007 tax return Line 54a: Investments of publicly traded
securities “A- Beginning of the year"(2007) should agree with
its 2006 line 54a “B End of the year"(2006); these should be the same
figures; they are not: it is 0 in 2006 and it is $122,678 in 2007.


DISCUSSION:
1) As of fiscal year 2007, ANY had 77% of its total assets in liquid
savings and temporary cash investments. This is more than one
year’s expenses without generating any new support. Thus, ANY will
be able to survive the present economic downturn.
2) In 2006, ANY operated at a deficit of $2,642,724. In 2007, ANY
greatly increased its public support and turned the deficit into an
excess of $912,800. Continuing this support may be difficult in the
current economic downturn.
3) ANY had no exposure to Madoff investments.

RECOMMENDATIONS:
The recent financial turmoil, caused by the Wall Street and Madoff
scandals, has also affected the relationship between donor and
non-profit. The turmoil has caused donors to become uncertain and
more selective in giving to non-profits. Non-profits that are
transparent about their finances will regain the lost trust of its
donors sooner than those non-profits that are not transparent about
their finances. In order to reach out to more selective donors, ANY
should be more transparent about its finances.
ANY should provide the following information on its web site:
1) It should provide its three most recently filed tax returns.
2) Since ANY has done a superb job in keeping most of its assets in
cash, it was probably able to avoid taking a big hit in its total assets.
Accordingly, ANY should provide its investment philosophy and
a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
4) ANY should publicize its overall four star rating from Charity
Navigator.

National Jewish Outreach Program

MISSION: The National Jewish Outreach Program (NJOP), www.njop.org was founded in 1987, by Rabbi Ephraim Buchwald, in response to the urgent need to prevent the loss of Jews to Jewish life due to assimilation and lack of Jewish knowledge. NJOP has become one of the largest and most successful Jewish outreach organizations in the world, reaching out to Jews by offering them positive, joyous, Jewish educational opportunities and experiences. NJOP programs are presently offered at more than 3,665 locations across North America, and in 37 countries worldwide. NJOP has successfully reached close to 1,040,000 North American Jews and engaged them in Jewish life.

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, NJOP has an overall
rating of two stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of NJOP based on 990 tax returns through
2007:

Overall Rating: Two Stars **
Organizational Efficiency:
Efficiency Rating: Two stars **
Program Expenses: 73.4%
Administrative Expenses: 12.8%
Fundraising Expenses: 13.7%
Fundraising Efficiency: $0.13
(NJOP spends $0.13 to raise $1.)

Organizational Capacity:
Capacity Rating: Two stars **
Primary Revenue Growth: 5.1%
Program Expenses Growth: -0.2%
Working Capital Ratio (years): 0.35
(NJOP can sustain itself for 0.35 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Director, Ephraim Buchwald,was $128,052 which represents 6.05% of expenses. For comparison purposes, compensation for the President of the American Jewish World Service, Ruth Messinger, was $191,000 which represents 0.79% of expenses.



As of fiscal year 2006, NJOP had total assets of $722,020. Of this figure NJOP had investments of publicly traded securities of $19,158 (in 2005, this figure was $200,174) and cash non-interest bearing investments of $100 and savings and temporary cash investments of $167,833. It had pledges receivable of $492,121. NJOP had fixed assets of land, buildings and equipment less accumulated depreciation of $18,784. Thus, in fiscal year 2006, NJOP operated at a deficit of $128,139.

As of fiscal year 2007, NJOP had total assets of $883,944. Of this figure NJOP had investments of publicly traded securities of $0 and cash non-interest bearing investments of $100 and savings and temporary cash investments of $406,190. It had pledges receivable of $437,253. NJOP had fixed assets of land, buildings and equipment less accumulated depreciation of $18,617. Thus, in 2007, NJOP operated at an excess of $84,059.


DISCUSSION:
On the 13th anniversary of the Shabbat Across America/Canada
event, NJOP should be acknowledges for its financial insight.
1) NJOP was prescient about the financial crisis of 2008. Between
2005 and 2007, it completely reduced its investments in publicly
traded securities and increased its investments in its liquid savings
and temporary cash investments.
2) As NJOP moved out of risky investments in securities, it moved
from operating at a 2006 deficit to operating with an excess in 2007.
3) NJOP had no exposure to Madoff investments.
4)However, NJOP’s ability to withstand the present economic downturn is questionable as 49% of its 2007 total assets are based on pledges. Donors’ ability to fulfill on past commitments is uncertain due to the unknown effects of the economic downturn on individual donors.

RECOMMENDATIONS: The recent financial turmoil, caused by the Wall Street and Madoff scandals, has also affected the relationship between donor and non-profit. The turmoil has caused donors to become uncertain and more selective in giving to non-profits. Non-profits that are transparent about their finances will regain the lost trust of its donors sooner than those non-profits that are not transparent about their finances. In order to reach out to more selective donors, NJOP should be more transparent about its finances.
NJOP should provide the following information on its web site:
1) It should provide its three most recently filed tax returns.
2) Since NJOP did a superb job at predicting the economic downturn, it should provide its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff investments on the homepage of website, especially since it had NO exposure to Madoff.

In conclusion, website visitors need to be made award of NJOP’s prescient economic forecasting.

President Obama’s Plan to Reduce the Charitable Deduction

Once in a blue moon, Jupiter is aligned with Mars. Presently,
liberals and conservatives are in alignment over President
Obama’s recent proposal to reduce itemized charitable
deductions. Liberals, who run most of America's non-profits,
and conservatives, who oppose raising taxes, are both opposed
to the president’s proposal.

President Obama’s budget proposal for 2010 includes a
provision to raise the tax rate on the two highest income tax
brackets from 35 % to 39.6% and from 33% to 36% respectively
and to lower the tax benefit from itemized deductions for these
two brackets to 28%. This includes the benefit for charitable
deductions. The money garnered by these changes will be used
to help create a $630 billion fund to be used to fund the
envisioned new health care system.

Non-profits are concerned that this change will cause donors to
give less money to charity. The White House budget chief,
Peter Orszag, responded to this concern by offering the following
example on his blog: “If your’re a teacher making $50,000 and
decide to donate $1,000 to the Red Cross or United Way, you enjoy
a tax break of $150. If you are Warren Buffet or Bill Gates and
you make that same donation, you get a $350 deduction – more
than twice the break as the teacher.” According to the editorial
page of the Wall Street Journal (3/10/09), the administration is
turning “…philanthropy into a class issue.”

Instead of wealth redistribution by choice, wherein a donor
chooses what charity to support, this tax change is a step down a slippery slope toward forced redistribution wherein the
government chooses where to direct one's money As taxes increase and itemized deductions decrease, private citizens will become
acclimated to the notion that it is the responsibility of the state to support the less fortunate; private citizens will gradually become less inclined to support the less fortunate on their own initiative.

Government responsibility for the less fortunate is the method of
philanthropy that is prevalent in a welfare state. The nadir of this
slippery slope is best exemplified by the nations in Europe. In
Europe, very few private citizens give to charity. It is worth
noting that greater than 70% of Americans give to charity.

The Center on Philanthropy at Indiana University just published
an analysis of how changes in the tax rate will impact itemized
charitable deductions. It estimated that had the proposed changes
been in affect in 2006, the total itemized contributions from the
4 million highest income households would have dropped off 4.8%
or $3.8 billion. At the time, these high income tax filers accounted
for $81.2 billion out of a total of $186.6 billion that was claimed by
all tax returns with itemized charitable deductions.

The proposed change in reducing the charitable deduction is not
taking place in a vacuum. It is taking place at a time that the economy, according to Warren Buffet, has fallen off a cliff. It is taking place at a time when there have been mega-changes in personal wealth and income. The changes in wealth and income play a larger role in charitable giving than changes in tax rates. The structural changes in the role played by the government in the economy, as recently engineered by the Congress, may lead to long
term changes in wealth and personal income. These structural changes may create a permanent debt for future generations with concomitant changes in the way Americans support the less fortunate.

What makes Americans give almost $200 billion to charity each year
is not pressure from government mandates, but “…a diversity of
interest, freely chosen and passionately pursued.” (Naomi Riley,
Wall Street Journal op-ed page 3/3/09) In order to prevent the
Europeanization of American philanthropy, conservatives and liberals
must work together in order to keep American philanthropy unique
and effective in supporting the least fortunate throughout the world.

OneFamily Fund

Mission:
The OneFamily Fund (OFF), www.onefamilyfund.org, provides much-needed assistance to thousands of terror victims throughout Israel on a daily basis. We collect not only money, but all human resources - bringing together people who have suffered through terror attacks, along with caring people who thankfully haven't. We connect people in Israel with people in almost every country around the world. OneFamily provides direct financial, legal, and emotional assistance to victims of terrorism in Israel. In addition, OneFamily provides the family network for world Jewry to express and actuate their natural sense of brotherhood by facilitating direct contact, relationships, and interaction between survivors and world Jewry as individuals, communities, and organizations.

Financial Efficiency Evaluation:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, OFF has an overall
rating of one star (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of OFF based on 990 tax returns through
2006:
Overall Rating: One Star *

Organizational Efficiency:
Efficiency Rating: 1 Star *
Program Expenses: 63.3%
Administrative Expenses: 21.6%
Fundraising Expenses: 15.0%
Fundraising Efficiency: $0.16
(OFF spends $0.16 to raise $1)

Organizational Capacity:
Capacity Rating: One Star *
Primary Revenue Growth: -13.3%
Program Expenses Growth: -17.6%
Working Capital Ratio: 0.01
(OFF can sustain itself for 0.01 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Chief Executive Officer, Gary Kenzer, was $40,000 which represents 1.28% of expenses. For comparison purposes, compensation for the President of the American Jewish World Service, Ruth Messinger, was $191,000 which represents 0.79% of expenses.

As of 2006, OFF had net assets of $259,677. Of this figure,
OFF had investments of publicly traded securities of $0 and cash non-interest bearing investments of $$37,091 and savings and temporary cash investments of $71,818. OFF had fixed assets of land, buildings and equipment less accumulated depreciation of $205,970. It operated at a deficit of $250,489.

Discussion:
OFF is a financially inefficient non-profit institution. This conclusion is based on the following facts:

1) Charity Navigator has given OFF an overall rating of one star
including an efficiency rating of one star. Too much of its revenue
is spent on administrative and fundraising expenses; and too little
of its revenue is spent on its target – families victimized by terror.
2) OFF has a working capital ratio of 0.01 years. It has no margin
safety against future financial uncertainty as exists right now. OFF
has a limited ability to withstand the present economic downturn.
3) OFF had no exposure to Madoff investments.

Recommendations: The recent financial turmoil, caused by the Wall Street and Madoff scandals, has also affected the relationship between donor and non-profit. The turmoil has caused donors to become uncertain and more selective in giving to non-profits. Non-profits that are transparent about their finances will regain the lost trust of its donors sooner than those non-profits that are not transparent about their finances. In order to reach out to more selective donors, OFF should be more transparent about its finances.
OFF should provide the following information on its web site:
1) It should provide its three most recently filed tax returns.
2) It should provide its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff investments on the homepage of website, especially since it had NO exposure to Madoff.

Next Week’s Blog: Obama’s Plan to Reduce the Charitable Deduction

American Friends of the Open University of Israel

MISSION:
The American Friends of the Open University of Israel (AFOUI) www.afoui.org works to expand the curriculum and facilities for the distance learning center at the Open University in Israel, and to provide scholarships to its students. Distance teaching and the self-study method provide conditions that meet the constraints of individuals who work, raise a family, manage a household or serve in the military. The various aspects of distance education developed by the Open University, along with the University's open admission policy, aim to open the world of higher education to all, irrespective of age, sex, place of residence or occupation, in order to enable every individual to realize his or her academic ability.

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, AFOUI has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of AFOUI based on 990 tax returns through
2006:
Overall Rating: Four Stars ****

Organizational Efficiency:
Efficiency Rating: 4 Stars ****
Program Expenses: 82.2%
Administrative Expenses: 9.0%
Fundraising Expenses: 8.7%
Fundraising Efficiency: $0.03
(AFOUI spends $0.03 to raise $1)

Organizational Capacity:
Capacity Rating: Four Stars ****
Primary Revenue Growth: 21.0%
Program Expenses Growth: 2.6%
Working Capital Ratio: 2.53
(AFOUI can sustain itself for 2.53 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its President, Ingeborg Rennert,
was $0. For comparison purposes, compensation for the
National Executive Director of the American Friends of
Hebrew University, Peter Willner, was $370,253 which
represents 0.85% of expenses - a very low figure
percentage-wise for non-profits. .

As of 2006, AFOUI had net assets of $5,778,180. Of this figure, AFOUI had investments of publicly traded securities of $0 and cash non-interest bearing investments of $0 and savings and temporary cash investments of $398,110. It had pledges receivable of $4,327,626. AFOUI had fixed assets of land, buildings and equipment less accumulated depreciation of $1,052.

As of 2007, AFOUI had net assets of $4,632,895. Of this figure AFOUI had investments of publicly traded securities of $0 and cash non-interest bearing investments of $48,954 and savings and temporary cash investments of $1,905,606 It had pledges receivable of $2,649,233. AFOUI had fixed assets of land, buildings and equipment less accumulated depreciation of $1,548. Thus, in 2007, AFOUI had a deficit of $1,145,285.

Discussion:
AFOUI is a financially efficient and effective non-profit institution. This conclusion is based on the following facts:

1) AFOUI was prescient about the financial crisis of 2008. Between 2006 and 2007, it increased its investments in its liquid savings and temporary cash investments.
2) AFOUI has received an overall four star rating from Charity Navigator. It has a working capital ratio of 2.53 years. AFOUI’s working capital ratio of 2.53 years is a measure of its reserve of liquid funds in excess of current liabilities that is available as a margin of safety against future financial uncertainty.
3) AJHS had no exposure to Madoff investments.

However, AFOUI’s ability to withstand the present economic downturn is questionable as 56% of its 2007 net assets are based on pledges. Donors’ ability to fulfill on past commitments is uncertain due to the unknown effects of the economic downturn on individual donors.

Recommendations: The recent financial turmoil, caused by the Wall Street and Madoff scandals, has also affected the relationship between donor and non-profit. The turmoil has caused donors to become uncertain and more selective in giving to non-profits. Non-profits that are transparent about their finances will regain the lost trust of its donors sooner than those non-profits that are not transparent about their finances. In order to reach out to more selective donors, AFOUI should be more transparent about its finances.
AFOUI should provide the following information on its web site:
1) Though its website homepage states that it received an overall four star rating from Charity Navigator, many donors do not know what this means. AFOUI should explain the meaning of this rating.
2) It should provide its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide its three most recently filed tax returns.
4) It should provide information about its exposure to Madoff investments; AFOUI had NO exposure to Madoff investments.
5) AFOUI should state that it does not compensate its president.

Next week’s blog: One Family Fund

Abraham Joshua Heschel School (NYC)

Mission: Founded in 1983, The Abraham Joshua Heschel School (AJHS), www.heschel.org is an independent school named in memory of one of the great Jewish leaders, teachers, and activists of the 20th century. Unaffiliated with any single movement or synagogue, The Heschel School sees as essential the creation of a community with families from a wide range of Jewish backgrounds, practices and beliefs. The Heschel School is dedicated to the values and principles that characterized Rabbi Heschel's life: integrity, intellectual exploration, traditional Jewish study, justice, righteousness, human dignity, and holiness. It regards the texts of the Jewish tradition and the history of the Jewish people as fundamental resources for developing ideas, beliefs, behaviors and values to shape and inspire the lives of individuals.

FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, AJHS has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of AJHS based on 990 tax returns through
2006:
Overall Rating: Four Stars ****

Organizational Efficiency:
Efficiency Rating: 3 Stars ***
Program Expenses: 77.9%
Administrative Expenses: 19.3%
Fundraising Expenses: 2.6%
Fundraising Efficiency: $0.15
(AJHS spends $0.15 to raise $1)

Organizational Capacity:
Capacity Rating: Four Stars ****
Primary Revenue Growth: 14.5%
Program Expenses Growth: 21.1%
Working Capital Ratio: 1.23
(AJHS can sustain itself for 1.23 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Head of School, Roanna Shorofsky,
was $401,880 which represents 1.71% of expenses.
For comparison purposes, compensation for the
Head of School of the Dalton School, Ellen Stein, was
$438,600 which represents 1.01% of expenses.

As of 2006, AJHS had net assets of $60,897,802. Of this figure, AJHS had investments of publicly traded securities of $14,403,396 and savings and temporary cash investments of $7,650,699 and cash non-interest bearings investments of $133,572. AJHS had fixed assets of land, buildings and equipment less accumulated depreciation of $40,532,811.

As of 2007, AJHS had net assets of $77,362,414. Of this figure, AJHS had investments of publicly traded securities of $9,971,728 and savings and temporary cash investments of $10,479,580 and cash non-interest bearing investments of $567,217. AJHS had fixed assets of land, buildings and equipment less accumulated depreciation of $57,024,601.

Discussion:
AJHS is a financially efficient and effective non-profit institution and is in excellent financial shape to weather the present economic downturn. This conclusion is based on the following facts:

1) AJHS was prescient about the financial crisis of 2008. Between 2006 and 2007, it reduced its exposure to publicly traded securities and concomitantly increased its investments in both savings and temporary cash investments and in fixed assets.
2)Between 2006 and 2007, AJHS increased its net assets by over 25%.
3) AJHS has received an overall four star rating from Charity Navigator. It has a working capital ratio of 1.23 years. AJHS’s working capital ratio of 1.23 years is a measure of its reserve of liquid funds in excess of current liabilities that is available as a margin of safety against future financial uncertainty.
4) AJHS had no exposure to Madoff investments.

Recommendations: The recent financial turmoil, caused by the Wall Street and Madoff scandals, has also affected the relationship between donor and non-profit. The turmoil has caused donors to become uncertain and more selective in giving to non-profits. Non-profits that are transparent about their finances will regain the lost trust of its donors sooner than those non-profits that are not transparent about their finances. In order to reach out to more selective donors,AJHS should be more transparent about its finances.
AJHS should provide the following information on its web site:
1) It has received an overall four star rating from Charity Navigator.
2) It should provide its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide its three most recently filed tax returns.
4) It should provide information about its exposure to Madoff investments; AJHS had NO exposure to Madoff investments.

How Charities Can Regain Lost Trust (part III)

The present system of charitable giving entails an informal
agreement, between donor and charity, that is based on trust.
A donor gives to a non-profit and trusts that the non-profit will
use that gift to support a mutually agreed upon person in need.
Non-profits have functioned on a business model based on that
trust. The recent financial turmoil caused by the Wall Street and
Madoff scandals have caused a breakdown in the agreement
between donor and non-profit. The environment in which non-
profits have functioned has changed. The new environment of
uncertainty requires non-profits to change their business model.
The new business model must reflect the changed environment.
The present system of giving, based on trust, must be transformed
to a system based on transparency. Those non-profits that
make their finances transparent will regain the trust of
donors; those non-profits that do not make their
finances transparent will lose support.

Recommended Non-profit Actions:
1) The non-profit should make sure that it is rated by Charity
Navigator http://www.charitynavigator.org/. Charity Navigator
is America’s premier Charity evaluator and it rates charities based
on their financial efficiency.
2) The non-profit should provide it’s Charity Navigator rating on
the home page of its website. The non-profit should also explain
what the rating means.
3) The non-profit should provide its three most recently filed tax
returns on its website.
4) The non-profit should provide a breakdown of its liquid and
fixed assets. This can be found by examining the non-profit’s
investment-securities assets (Line 54b of 990 tax return) and its
fixed assets of land, buildings and equipment less accumulated
depreciation (line 57c of 990 tax return.)
5) The non-profit should provide the same type of investment
information that mutual funds provide. Specifically, the non-profit
should provide its investment philosophy and a breakdown of its
investments on a semi-annual basis.
6) The non-profit should provide donors and others with access
to an employee who can respond to financial questions upon
request. If the the employee is unable to answer the question,
the employee should promise to get back to the questioner within
24 hours.
7) The non-profit should provide information on its home page
about its its recent financial losses. It should provide information
as to weather it had direct exposure to Madoff investments. The
Jewish Communal Fund,
http://www.jewishcommunalfund.org/ provides
information about its exposure to Madoff investments on its home
page; it had NO exposure to Madoff investments.
8) The non-profit should provide information on its website about
any cutbacks it will be making. It should be specific about where
it is making its cutbacks – program expenses, administrative
expenses or fundraising expenses.

Conclusion:
Nobody likes bad news. However, hiding the bad news only
compounds the problem. Non-profits that are transparent about
their finances will regain the lost trust of its donors sooner than
those non-profits that are not transparent about their finances.
The economy runs in cycles. Today’s economic downturn will
eventually end. Those non-profits that choose to be
transparent today will benefit far more in tomorrow’s
economic upturn than those non-profits that are not
transparent. Rahm Emanuel, President Obama’s Chief of Staff,
famously said, “You never want a serious crisis to go to waste.
And what I mean by that is an opportunity to do things you think
you could not do before.” Today’s crisis in the world of Jewish
philanthropy is really an opportunity for those non-profits that
choose to be ahead of the curve. Providing financial transparency
today will allow non-profits to be more effective in supporting
their brother and sister Israelite in the future.

Next Week's Blog: Abraham Joshua Heschel School (NYC)