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