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Tuesday, June 23, 2009

A Business Owner Puts a Lot of His Money Where His Mouth Is

I have tried to cover the battle for the Bnot Shulamith Shulamis Brooklyn school on my blog in months past. The battle involves a lot of factors an outsider cannot get a good grip on. The Jewish Star has another installment on the story and this one leaves my mouth agape.

There is a business man who believes that he can save the Brooklyn school (not the campus which is the subject of a legal battle) and is planning to put up his own money to do so. Mr. Abilevitz, a parent of a student and owner of a pharmacy on Kings Highway in Flatbush, believe he been reviewing the financial records and believes he has identified the source of the steep losses. He claims that by eliminating inefficiencies and tightening up tuition collections that he can turn the school around and get it out of the red.

And, he is willing to put hundreds of thousands of his own dollars into the school during the turn around.

I don't quite know what to say except that it is likely that the same inefficiencies that he has identified are the argument that one of my commentors made in a previous post about the need to bring in outside consultants to make the hard cuts and tighten the bolts is likely true.

Read and leave your comments.


Lion of Zion said...

i don't understand the point in the article about choosing between a building and a school.

i've heard nice things about abilevitz from derech hatorah parents.

personally i feel shulamith (the school that is, not the parents/students) is getting exactly what it deserves with the threats of closure. for years, shulamith slid to the right and contributed both directly and indirectly to the MO flight out of brooklyn. of course the "real" RW never bought into shulamith even with its slide. thus shulamith has been left with a truncated pool of applicants.

also, i know a girl who graduated the e.s. and was rejected from the h.s. because she also applied to flatbush (i don't know if they objected to flatbush specifically or applying to another school altogether). then last year shulamith specifically advised parents to apply to a second school because it was already thought that there wouldn't be 9th grade.

Dave said...

i don't understand the point in the article about choosing between a building and a school.

The school accepted a deposit from a buyer for the building.

They then, with his permission, spent the deposit to pay their taxes.

At the same time, they have a large deposit down on the new location, but have 60 days to close, or they forfeit that deposit.

Should the lawsuit continue, the school will lose its deposit on the new location. Should the lawsuit prevail, they will have to refund the deposit to the prospective buyer, which they also don't have.

In short, if the parents prevail in blocking the sale, the school is bankrupt anyway.

or at least, that's how I read things.

Ezzie said...

Good for him.

Maybe he'll run it like a business. That wouldn't be all bad.

SuperRaizy said...

Jake Abilevitz is a good guy. He's very honest, he has the MO community's best interests at heart, and he has been keeping Yeshiva Derech Hatorah afloat for years with his contributions (he is the President of Derech Hatorah and manages their finances. The school would have closed up long ago without him.)If anyone can turn Shulamith's finances around, he can, because people around here know and trust him.
{BTW, "Bnot Shulamith" is the name of the Long Island school. The Brooklyn school is called Shulamith School.}

SephardiLady said...

Thanks SuperRaizy!
I am very excited about seeing a school going under the guidance of a dedicated businessman.

I wish more schools would seek input because I think there is more to be gained than lost.

brooklynparent said...

Dave, No school, not even under the leadership of a competent administrator, can survive the loss of the vast majority of its capital (which the building is, by far). If the Brooklyn school loses its building, the school is dead too. Brooklyn schools with buildings are tottering over the brink; if Shulamith loses the accumulated capital of decades of fundraising then it's dead anyway. Even in the best of times it would be nigh-impossible to recover, and the economic environment is brutal. It's not a choice between building and school: no building equals no school.

JLan said...

Ignoring the issue about the building- it sounds like there are a number of people there who either aren't paying tuition they're supposed to be paying or are receiving aid and shouldn't be. It's possible that the school could go into the red if that's tightened up, but it's also possible that the money just isn't there among the parents and that the school has been overlooking this fact (intentionally) for quite a while.

ProfK said...

Losing capital can certainly be a death knell for a school but so can losing a steady source of students. Isn't one of the problems in Shulamis declining enrollments? If there is less clientele for the services you offer than will sustain the school financially as it is structured now, then will a new administrator really solve the problem long term?

Look at the families now who live in Brooklyn and send their children to Shulamis. When their children move up through the grades are there going to be sufficient other children to populate those younger grades? In other words, are there going to be replacement families for when the present families are out of the school? If Shulamis is to stay in the MO column, are there enough MO families in the area to keep it alive? For how much longer?

Anonymous said...

If Mr. Abilevitz can get Shulamith out of the red, then why should the building be sold at all? All it needs, apparently, is someone willing to do the job, instead of someone trying to run the school to the ground.

It's easy to claim low enrollment when rumors of closing aren't stopped since BS opened in LI.

It's easy to claim there's no money when tuition is not actively collected.

It's easy to destroy the school's MO reputation by accepting students who are not Modern Orthodox.

Dave said...

If the building is not sold, it will cost the school $4 million (2.5 million in a lost deposit, and 1.5 million they need to refund the deposit they already spent).

Do they have that money?

Anonymous said...

"I wish more schools would seek input because I think there is more to be gained than lost."

It's ridiculous that in this day and age they still have us brainwashed enough to allow our schools to have closed books. The inefficiencies and flow of money should be out there for all to so, it shouldn't be this one guy even if he is capable.

Anonymous said...

"It's ridiculous that in this day and age they still have us brainwashed enough to allow our schools to have closed books."


citizen of brooklyn north said...

in monsey some schools will be tightening their belts by cutting remedial services. But first they have hired consultants to tell them to do that. Then they will have to pay for training for teachers to accomodate those weak students who aren't receiving help. So those parents will need tutoring, and will be able to afford their tuition even less.

We will never get out of this tuition bind. We need rebbeim, we need morohs. they need an income to support their families.

I have a proposal: Pay those rebbeim what they need to live, and require them to contribute several hours a week to tutor kids one on one in school.

I am not familiar with brooklyn schools, (just North of Brooklyn schools....)

every business hires consultants to take care of inefficiencies. But people are incensed when it happens in a yeshiva.

Anonymous said...

"But people are incensed when it happens in a yeshiva."

Says who? Why would the parents be "incensed" if schools got professional management consulting?? Only the flab getting cut would be upset.

Anonymous said...

I once did business with Shulamith, and my parting words at the end of the relationship were, "You'll never see bracha from doing business this way." It seems like I wasn't the only one.

Miami Al said...

CBN wrote, "We need rebbeim, we need morohs. they need an income to support their families"

Maybe... but what percentage of our workforce should that be? What percentage of the Orthodox income should be dedicated there.

I think we have an abundance of both, which is why pay is so lousy. However, rather than letting the market shake them out, we subsidize them. So we pay them "market salaries" which are low, then give free/reduced tuition.

The alternative would starve them out, but the only way for the market to correct itself is for them to be starved out, and fewer people enter that field. As long as we as a community say "Rabbeim and Morot are to be protected from harm," then economically, we'll end up with an unlimited number.

A stock broker might starve and be unable to educate his child. A Rabbi, however inept and bumbling will never be allowed to starve or not educate his child. Why would any rational young bochur leave Yeshiva to be a stock broker with the downside risks when staying until Semicha means no risk. Net-Net, we have too many people that depend on the community because we backstop them.

Cut the supply of Jewish educators, and salaries will naturally rise. Increase the Jews working outside the community, and overall income and therefore demand for the remaining Jewish community business (education, Kashrut, etc.) will increase and return to a natural equilibrium.

Keep fighting the economic forces and we are doomed to failure.

Anonymous said...

Miami Al: Excellent points. Just not sure a stockbroker is the best example this year :)
To be economically healthy and vibrant, a community needs diversification and a full range of occupations and professions and to be part of the larger national economy.

Charlie Hall said...

A day school in the Bronx moved to the right, lost the local community, and closed last year leaving tens of thousands of dollars in unpaid bills. The community neither sent their kids there nor contributed financially to the school as the leadership was interested in their own hashkafah rather than serving the community. It was all very sad.