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.