Federation Board Votes to Realign Resources



"A model of efficiency, effectiveness and accountability" is what the Jewish Federation of Greater Philadelphia must be in conducting its business, said Federation president Ira M. Schwartz, who took over the position on July 3.

Schwartz initiated a hiring freeze this summer and charged Federation's executive staff with reviewing the organization's performance in relation to its 2003 Strategic Philanthropy Plan. The executive team undertook a two-month comprehensive review of Federation's in-house community-building and other programs to determine if those programs were achieving desired results and standards of excellence. At the completion of the review, the team worked with Schwartz to develop a set of recommendations to Federation's board of directors that included significant changes to Federation's operating budget and funding strategies. These recommendations addressed the necessity for cost-cutting measures in community-building programs and internal operational expenditures.

"We put together a proposal that will enable Federation to live within its means — a mandate clearly articulated in the Strategic Philanthropy document," said Schwartz. "This will eliminate the need to supplement future shortfalls with unrestricted endowment funds, and create a stronger financial and business foundation from which we can grow our campaign."

Entering its fourth year of implementation, the Strategic Philanthropy Plan called for regular reassessments of Federation's programs and operational efficiency. The plan called for development of three centers of excellence to focus on local and global community priorities: the Center for Jewish Life and Learning, the Center for Social Responsibility and the Center for Israel and Overseas. The reorganization called for clearly defined goals and outcome measures, enhanced focused giving so that donors could choose where their philanthropic dollars are invested, and significant impact on community priorities. It established funding criteria based on community needs, priorities and impact; required transparency of funding decisions and operational expenses; and emphasized added value to donor investments, which are expected to be used wisely, for the highest-quality and most effective programs.

At a Sept. 21 meeting, Federation's board of directors reviewed the executive staff report and budget proposal. The presentation highlighted that the 2003 Strategic Philanthropy Plan "was very high in introducing strategic concepts, but could not offer many implementa- tion details at its inception," explained Schwartz.

"The board was excited to hear the vision for Federation that was articulated by Ira," said Peggy Carver, a member of the board, and the new chair of Federation's Center for Jewish Life and Learning. "He gave us a direction that advocates fiscal responsibility, and provides needed implementation tools for strategic philanthropy."

Carver is a 20-year volunteer with Federation, and has held many leadership positions, and served on numerous committees, including the Strategic Philanthropy Committee that put together the 2003 plan. "It provided important organizational restructuring for Federation, but it now needs a more refined, fiscally practical implementation process moving forward," she said.

The board unanimously endorsed the staff's recommendations. Accordingly, Federation is planning to restructure its regional presence and reduce operating expenses by a significant percentage. It is also making plans to refocus future funding allocations on only the highest-quality and most efficient programs and initiatives that can produce measurable, meaningful and timely results.

"From a financial perspective, we can no longer afford to invest in programs that are costly to implement and maintain, require significant lag time in realizing return on social investment, and present difficulties in evaluation of impact and outcomes," said Beryl D. Simonson, Federation's board chair.

"We all have to exercise our fiduciary responsibility," he added.

"Ira has a real business-like approach to Federation, and has come up with a series of proposals and ideas to reduce expenses, and allow more funds to be distributed through our centers to important community programs," said board member Joseph Smukler. "The ideas that Ira presented to the board were well-received, and will help stabilize the costs of Federation's operations."

"Ira's approach is very refreshing," said Jeffrey I. Schwartz, another board member. "It is really important to take a practical approach, in addition to the emotional approach we often take when caring for the needs of our community. For years, our hearts were out there trying to do it all, but we realize we cannot do everything and must do what is fiscally responsible to benefit the community."

"We cannot be all things to everybody, and still provide the quality of services our community needs and deserves," added Carver. "For our community-building initiatives, we are going to take a hard look at each program. The ones that are working will be enhanced, and the ones that are not will be divested. It is a difficult process, but in the end, we will have the best programs helping us become a stronger community."

"It is sad to have to make these changes, but it is the right thing to do," said board member Nancy Astor Fox. "We must divert our resources to the best programs that have careful measures and outcomes, and are providing quality services to people most in need."

The changes will be implemented over the next several weeks. Federation's three centers' boards are setting specific annual goals and making recommendations for investing in a limited number of carefully selected programs and divesting from others. Federation's Policy, Strategy and Funding Committee will then review the recommendations from the centers, and develop funding proposals to achieve the budget for the board to review and vote on.

Carver noted that Ira Schwartz's approach for change was both "responsible and inclusive."

"This is not just one or two people making decisions, but a whole consensus process," she said. "I am looking forward to taking strategic philanthropy one step further."

"Federation sometimes feels like a large aircraft carrier, hard to turn and change directions," added Jeffrey Schwartz. "But with Ira's leadership, our board was able to make a quick turn and take a new direction that makes sense."

Changes in the Works

The cost reductions in community-building programs and infrastructure will change Federation's regional presence to focus on its relationships with and support for gateway institutions, primarily synagogues.

The mission of the Center for Jewish Life and Learning will be to provide strategic support to:
· Gateway institutions;
· Jewish day schools;
· Supplementary schools and;
· "best-practices" adult-education programs.

Engaging in programs that will strengthen synagogue membership is a high priority of Federation. Existing Kehillot construct will play an integral role in impacting this priority.

"We will be focusing more intensely on what is working for the community, and what is being effective in addressing and impacting its greatest needs," said Ira Schwartz. "The plan addresses our donors' expectations for operational efficiency and the responsible management of their community investments. The 2003 Strategic Philanthropy Plan adopted by the board of directors provided the initial direction for the priorities and programs that were funded. The review we are now going through — which the plan called for — will lay out the direction Federation will be taking and the priorities it will be funding for the next five to 10 years.



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