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