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