On June 24, I drove from my home in South Minneapolis across the river to Highland Park, the St. Paul neighborhood of my youth. I interviewed Ted Flaum, the new CEO of the St. Paul Jewish Federation.
My original idea was to write a feature story about Flaum, who has led an interesting and varied life. Many AJW readers likely know him from his previous tenure as director of fundraising at the Federation, from 2008 to 2014; and from his service as CEO of Jewish Family Service of St. Paul, for the past five years.
However, recent financial problems at the St. Paul Federation entered the conversation, and the Jewish World is still seeking answers to questions about the agency’s overseas allocations over a number of recent years. Thus, the story took a different turn. (I’d still like to write a Ted Flaum profile.)
I was alerted to things possibly being out of order, when an anonymous letter, dated July 31, 2018, was sent to me at the Jewish World. The letter was addressed to Mark Adelman, president of the Federation; also copied on the letter were Libby Parker and Lonny Goldsmith of TC Jewfolk, the online news site geared to young Jews.
The letter’s author described herself or himself as a “donor and volunteer” with the Federation “for decades.” The missive declared: “The fact that for the better half of a decade, Federation did not honor its overseas allocations, continued to have its allocations committee make these allocations and said nothing to the community, is disgraceful.”
In fact, the St. Paul Jewish Federation ended up in arrears to the Jewish Federations of North America (JFNA), the umbrella group of Jewish federations, for funds earmarked for the Jewish Agency for Israel, the American Jewish Joint Distribution Committee and World ORT.
Rob Jacobs, the previous Federation CEO, broke the news at a Nov. 29, 2017, board of directors meeting. This is from the minutes of the board meeting posted on the Federation’s website (the Transparency page): “Rob Jacobs reported that for the past 10 years, our Federation has been overestimating our campaigns, resulting in insufficient funds to cover our approved overseas and national allocations (except for P2G and JFNA dues). We currently owe JFNA $2.7 million for the unpaid overseas and national allocations. Instead of allocating 70% local and 30% for national/overseas, we’ve actually been allocating 78% local and 22% national/overseas. Based on discussions with the CFO of JFNA, JFNA has offered to write off the entire amount currently due from us.”
TC Jewfolk investigated the issue and published a lengthy article, “Amidst Financial Struggles, St. Paul Federation Looks to Move Forward,” on Feb. 6, 2019. Editor Lonny Goldsmith is to be commended for his diligent shoe-leather reporting. And I would like to apologize to Jewish World readers for neglecting to cover this story until now — 11 months after we received the anonymous letter. Likely, many of our readers who don’t peruse online content are learning about this for the first time.
Prior to the publication of the TC Jewfolk article, Federation officials intended to keep the financial problems under wraps. The Dec. 19, 2017, Federation board meeting minutes included this item: “Rob [Jacobs] reported that, based on JFNA’s advice, we have not informed the general community about the Federation’s budget and allocation issues. Board members were reminded not to discuss these issues in the community; if asked… direct questions to Rob.”
Rebecca Dinar, JFNA’s managing director of communications and media relations, disputed the way her organization’s advice was characterized. “JFNA advised the Federation to determine the facts and a course of action as a first step in preparing to engage stakeholders,” she informed TC Jewfolk.
After the TC Jewfolk article appeared, Federation President Adelman sent out an email to the community, on Feb. 18, 2019, and acknowledged that, indeed, the Federation had accumulated a large debt to JFNA: “We learned that over a period of years, our overseas allocations had been underfunded due to our campaign falling short of projections and not being restated for the purposes of making allocation decisions. We have worked diligently and successfully with our partners at JFNA to eliminate all outstanding liabilities that had accrued during the years in question and have made reasonable commitments with regard to future allocations to our global partners.”
JFNA leaders agreed to write off the Federation’s $2.7 million debt.
In his email message, Adelman added that board members initially reacted to the revelations of the Federation’s debt to JFNA with “shock and disbelief. But the board and staff quickly united around our responsibility to be good stewards of the community’s trust and dollars to understand and resolve these issues and ensure that we operate at the highest levels of accountability and transparency so they never happen again.”
The Jewish World has investigated the problem with Federation allocations to JFNA. On its 990 forms — which tax-exempt foundations are required to file annually with the IRS — the St. Paul Jewish Federation did not report any allocations to JFNA in 2011, 2012 or 2013. An allocation of $658,029 is listed on the 2014 Form 990, and similar amounts appear on the 2015 and 2016 forms submitted to the IRS.
In response to questions from the Jewish World, JFNA’s Dinar informed the newspaper that “St. Paul made overseas allocations in those years [2011-2013] — on average JFNA received about $350,000 each year against those allocations. This does not include dues to JFNA or other payments that we do not count within overseas.” She did not know why these allocations were not reported on the 990 forms.
Dinar also noted that there are “many reasons that a Federation may find itself in arrears [to JFNA]. It is not unprecedented.”
Apart from these financial problems, Rob Jacobs, the former Federation CEO who was the bearer of bad news, resigned at the end of 2018, after a tenure of 17 months. He had succeeded Eli Skora, who served as Federation CEO for 17 years; the financial problems developed under Skora’s watch.
In reporting the problems at the St. Paul Jewish Federation, the AJW is finally doing the responsible journalistic thing — it’s never too late to do the right thing. Perhaps, St. Paul Federation officials will offer a comment on this editorial.
Mark Adelman, in his Feb. 18 email, quoted the words of local philanthropists Rhoda and Don Mains: “St. Paul has a wonderful Jewish community. We have been privileged to have known and worked with outstanding community and professional leaders. All have contributed so much to our community. We must recognize that for several years Federation annual campaigns have fallen short of what is needed to support our local agencies, programs in Israel, and Jews throughout the world. We hope that all in our community recognize that gifts to the Federation are vital so that it can maintain this support. The need is so great. It is our fervent hope that the St. Paul Jewish community can remain strong and vibrant in the future, long after we are gone.”
The Jewish World heartily endorses those sentiments.
Mordecai Specktor / editor (at) ajwnews (dot) com