American Jewish Congress

Mission: The American Jewish Congress (AJ C), www.ajcongress.org is an association of Jewish Americans organized to defend Jewish interests at home and abroad through public policy advocacy - using diplomacy, legislation, and the courts. Five subjects comprise the core of our agenda: safety and security of Israel and the world Jewish community, especially in the face of worldwide terrorism; fighting to eradicate the new anti-Semitism; preserving religious freedom in the United States through separation of Church and State; energy independence and stopping the flow of petrodollars that fund terrorism; and supporting moderate Muslim countries and prominent individuals who oppose radical Islam and believe in "enlightened moderation" as the message of Islam.

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

Overall Rating: One Star *

Organizational Efficiency:
Efficiency Rating: 0 Stars
Program Expenses: 59.8%
Administrative Expenses: 8.1%
Fundraising Expenses: 31.9%
Fundraising Efficiency: $0.57
(AJC spends $0.57 to raise $1)

Organizational Capacity:
Capacity Rating: Two Stars **
Primary Revenue Growth: - 0.7%
Program Expenses Growth: 1.8%
Working Capital Ratio: 2.93
(AJC can sustain itself for 2.93 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, Neil Goldstein,
was $206,232 which represents 3.33% of expenses.
For comparison purposes, compensation for the President
of the American Jewish World Service, Ruth Messinger, was
$191,000 which represent 0.79% of expenses.

As of 2006, AJC had net assets of $17,125,899.
Of this figure, AJC had investment-securities
assets of $16,035,469 and fixed assets of
land, buildings and equipment less accumulated
depreciation of $294,019.

Discussion:
AJC’s working capital ratio of 2.93 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 and such random
shocks, as the Wall Street meltdown and the Madoff
affair, to which its flow of funds is subject. It is important
to note, however, that there is no direct or established
relationship between balances of working capital items
and the pattern that future cash flows are likely to assume.
The AJC acting co-executive director, Marc Stern, was
quoted in Jewish Week (12/19/08) as saying that the
AJC “…took a loss that we would rather have not taken.
It’s not trivial, but it’s not fatal.” Stern said that the
AJC had two endowment funds invested with Madoff,
but its “…operating funds were safely invested elsewhere.”
Normally, a working capital ratio of 2.93 years is a
Sufficient cushion for a non-profit to fall back upon;
However, the reliability of this figure is now in question.
Depending upon the severity of its Madoff investments,
the AJC may not be in good position to weather the
present economic downturn.

Recommendations:
On the home page of its website, the AJC provides
access to its annual report of its accomplishments in
2008. This report, however, provides no financial
information. Due to the lack of financial transparency
on Wall Street, and by Madoff, the public has become
more selective to giving to non-profits. As the AJC has
received low ratings from Charity Navigator, the AJC
should re-issue its annual report and include financial
information. In addition, the AJC should also provide
easy access to its financial statements and tax returns.
The AJC should provide access to this information on
the homepage of its website, http://www.ajcongress.org.
Negative information is better than hidden information.
In order to keep the trust of its donors, the AJC needs to
be become more transparent about economic matters.

Next week’s blog: Just One Life