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Wednesday, May 21, 2008

Why Should Anyone Invest in a Bankrupt Agency?

Hat Tip: Charlie Hall

The Yeshiva World is reporting that the Chinuch Atzmai school system (an Israeli network of private religious schools founded in 1953 that teaches almost exlusively Talmud Torah) is about to bankrupt. The report states that the school system has debts of $3 million and HaRav Eliyashiv and HaRav Aryeh Leib Shteinman are requesting the the "tzibur must come forward and meet the needs to keep the critical operation alive."

Let's not forget that this school system receives funding from the Israeli government and has always received funding from private donors and has long been a priority of many donors in the US, Canada, and Europe.

Donating to a school system that does not prepare its (male) graduates to support themselves and their families is not a priority of mine. But, I'm not here to comment on that.

I'm here to ask why in the world I, or anyone else, should throw good (tzedakah) money after bad(ly) managed money? Where is the modified business plan? Where is cheshbon of what when wrong and how it will be fixed or if it can be fixed at all? Unfortunately, there is none.

A few months ago I received a slick and busy brochure telling me that a tzedakah organizations serving the same population was facing mounting debts and and a statement by gedolim that every family is obligated to give a minimum of $180. The brochure is slick and glossy and thick, but it does little to reassure the donor that the money isn't going to be sent into some deep hole.

When a car has proven itself to be a lemon, you scrap it and start again. But, in a world with little accountability, no one knows that the car is a lemon and money will keep getting pumped into a black hole (sorry I'm so pessimistic today. . . .but I am quite concerned about fiscal erosion in Torah communities, from left to right).

So, the beat goes on.


arnie draiman said...

right on! yasher koach. it makes no difference to me if it is from the yeshiva world or the world of secular social action (in the name of tikkun olam).

you MUST know where your tzedakah money is going, how it is being spent, and that it is not being wasted.

i teach all about efficient and effective use of tzedakah funds. why would you want 18% - 40% or more to go for salaries, fundraising, administrative costs, etc.???? especially when there are proven non-profits doing the same work for under 10% admin????

and, one Torah teaching comment, if i may: giving tzedakah money to a place that wastes it is the same as stealing from the person in need who you thought was being helped.

you can see this in "al tigzol dal, kee dal hu" - mishlei (proverbs) 22:22 and the various comments on it, paticularly bamidbar rabba 5:2).

once again, thanks for bringing this to light.

arnie draiman
philanthropic consultant

jewinjerusalem said...

I fully agree with you.Organizations should be fiscally responsible. Here you're unaware of some facts. First, the government doesn't fully support these schools. Second, as you said they have to turn to private donors. Nu, they're turning to you and me. Some people stopped giving and they need NEW donors. Third, B"H the C. A. school system is growing. There are BH thosands of new people who want to give their children a Torah education. That means more is needed even if everyone keeps giving. Fourth, many of these new programs also have secular studies. (That should make you happy.) This of course costs even more. Fifth, many of these kids live in small communities. Therefore alot of the money that is sought is for transportation.
I hope my words will inspire you to write a check!! (Tax deductible, of course.)

SephardiLady said...

JewinJerusalem-Thanks for chiming in, but you haven't made a good case for why someone should write a check. I am fully aware full support is not given and I'm glad to hear there are schools with greater amounts of general studies. But what does the organization plan to do to keep out of a hole? They know the population is growing? Why are they loosing previous supporters? Where is a modified plan? Are they opening their budget up to scrutiny?

I find the demand for money without an open discussion about the budget and the problems to be an incorrect approach. In our own home, when we aren't meeting our goals, we have a brutal sit down and change of course. What will be changed here?

Bob Miller said...

There's such a thing as staying alive until your plans for reorganization or improvement are completed.

SephardiLady said...

Bob Miller-I don't think this is the first time there have been problems. In fact I recall some similiar plea a few years back.

I agree with you that sometimes you need to stay alive before implementing changes. But, do you think there will be changes? I get enough letters from a number of organizations to ask that question. I'm sure you do too.

Anonymous said...

"There are BH thosands of new people who want to give their children a Torah education."

They don't need Chinuch Atzmai for that. There have been free government-run religious schools since the state was established.

Anonymous said...

"There are BH thosands of new people who want to give their children a Torah education."

They don't need Chinuch Atzmai for that. There have been free government-run religious schools since the state was established.

Bob Miller said...

Anonymous must have noticed a large gap in religious outlook between the Chareidi and Dati-Leumi communities. Neither group would want the other to control the education of their group's children.

ora said...

Why does a budget crisis mean that a school--or tzedaka organization--is mismanaging its money? Schools and tzedakas aren't money-making operations. They will always need more from donors. When populations grow, or the government cuts funding, or the economy takes a turn for the worse, they will need extra money, even if they're stretching each shekel to the maximum.

I share your reluctance to donate to chinuch atzmai (even those school with secular studies programs do not have programs that prepare students for Israel's job market), but I don't see why you're assuming there's something wrong with the system.

SephardiLady said...

Badly managed does NOT mean mismanaged. I have an aversion to debt and really don't like to hear about a state of emergency when a hole is so deep.

Commenter Abbi said...

Also Jewinjerusalem- the population is growing, but not at the rate that it demands 5-6 schools on every block. There's a new yeshiva opening up in J-m every other minute, because someone doesn't like the hashkafa of the the existing one or they don't like the way the kids wear striped instead of plaid shirts.

Among other money management problems, that's a biggie. When my brother tried to bring up fundraising for his son's school in Har Nof in my parents MO community, my mother responded that who wants to support yet another yeshiva in J-m? They're a dime a dozen.