Making Sense of Federation of Jewish Philanthropy (FJP) Agency Budgets

As I mentioned in yesterday’s post, I knew that in order to discover why JCCs in New York City began taking government money in the 1960s and ‘70s I would need to read through the accounts and budgets that they submitted to the Federation of Jewish Philanthropies of New York (FJP) during those years. These documents can all be found at the Center for Jewish History; the United Jewish Appeal-Federation of Jewish Philanthropies of New York Collection is one of the most expansive, comprehensive, and informative collections held by the American Jewish Historical Society (AJHS).

Jewish philanthropic societies, known as Federations, were established beginning in 1895 and proliferated across the United States in the first two decades of the twentieth century. For more on this history, I highly recommend reading Deborah Dash Moore’s classic At Home in America, which discusses the formation of the FJP in chapter six. Federations took on the responsibility for communal fundraising and planning, with the intent of eliminating duplication of agencies, services, and donor solicitation. They created a more efficient system for soliciting donations, eschewing bazaars and raffles and galas for an annual campaign, during which they collected pledges and cash donations from Jewish individuals throughout their metropolitan area. Federation beneficiaries were prohibited from conducting their own fundraising campaigns and obligated to support the Federation’s annual fundraising efforts. Most JCCs, for example, stipulated in their by-laws that members of their Board of Directors make an annual pledge to Federation. Agencies benefitted from this coordination and came to depend on an annual allocation to support their operations and overhead—particularly the maintenance of highly utilized buildings that experienced extensive wear and tear.

New York City's JCCs were guaranteed an annual allocation because they were Federation beneficiary agencies, but the amount could fluctuate from year to year. Each beneficiary agency went through an annual budget review by the Federation Distribution Committee (FDC) to determine how much they would be allocated. This was true for beneficiaries in all of the Federation functional groups, not just JCCs.

The Annual Agency Files are organized by year, and each agency has its own file folder containing the materials that the FDC’s review process generated each year. At minimum, the file folder always contains a multi-page budget worksheets (chronicling that agency’s income and spending for the last fiscal year) and the budget recommendation that the FDC made for that agency for the upcoming fiscal year. Usually the folder also includes: minutes from meetings between the FDC and agency leaders; correspondence about the allocation or requests for additional funds; and an annual document in which an agency responded to FDC questions about specific functions or trends at the agency. Sometimes additional reporting was also added to the folder. This qualitative material is valuable for historians interested in how social welfare agencies prioritized and changed their activities over time, and it is not difficult to parse if one is familiar with organizational history and archival materials. By contrast, when I first encountered the accounting documents, I had absolutely no idea what I was looking at.

From my own experience as a financially independent adult, I understood a few basics about budgeting:

·      All income is listed together, and all expenditures are listed together.

·      “Housing” costs include more than just a rent or mortgage payment. Buildings and spaces are expensive to maintain.

·      There are fixed costs (rent/mortgage) and variable costs (emergency repairs).

·      Labor is always the most expensive item in a budget.

·      The goal is to spend less than you make.

A budget for an institution the size and scope of a community center follows similar principles, but is like a family budget on steroids: the costs are much higher, and there are many more of them. Through slow and careful reading of over twenty years of budgets and accounts for four JCCs, I began to assemble a basic understanding of a) how accounting tables function; b) how JCC finances work; and c) what the FJP wanted to know about their agencies’ financial operation and health.

The easiest place to begin investigating how the budget tables worked was to take one JCC's budget from a given year and to examine the section listing their income, because their funding did not come from very many places. Although they charged an annual membership fee and smaller fees for other special programs (like dance or music classes, or drama programs, for example), the majority of the money that New York City JCCs made came in the form of their annual allocation from the FJP. As a result, there were very few line items, and most were pretty self-evident from their short description—day camp fees, art classes, and towel and locker rentals being a few examples.

Expenditures make up the vast majority of each budget, particularly salary lines and overhead costs for the building and administration of JCC programs (such as utilities, educational supplies, and insurance). The first two pages of the budget list the total amount spent for each line item, but on later pages the individual expenses are broken out and elaborated upon. The total amount spent on salaries, for example, would be listed the first page, but on later pages each individual role (like Executive Director or Group Worker) would be listed along with the annual salary paid or the employee’s rate per hour and number of hours worked. This was also done with administrative expenses and maintenance costs, so it’s possible to trace how much an agency spent each year on items as varied as telephone calls, food, publicity materials or repainting the walls. I haven't looked deeply at this but if anyone is interested in labor costs in voluntary agencies, or the effects that aging buildings can have on non-profit entities, these budgets offer a wealth of information.

At the top of each budget, the FDC tallied the total amount of income earned by the agency, added to it the amount of the allocation that they disbursed to that JCC for the fiscal year, and then subtracted the total expenses.  In some years, a surplus would remain—but I have found that it was much more common for agencies to run deficits. It was expected that the allocation would cover the JCC’s overhead costs, its administrative costs, and subsidize most of its program. The agency was responsible for raising the balance through membership and program fees. If an agency added new programs, or hired more people, or bought expensive equipment—even if it was absolutely necessary in order to keep the doors open and serve their members—the Board of Directors was responsible for covering the added costs that contributed to a deficit.

In addition to the allocation, the FDC also provided special reserve funds to JCCs for non-recurrent expenses, like to cover start-up costs for new programs, make improvements to facilities, or hire a consultant. Agencies did not always fully indent the reserves they were granted. Federation did careful audits, so there are also plenty of documents in each folder from consultations made by a building inspection firm they used. Every reserve allocation had to be carefully justified. The budgets also demonstrate that the FDC added additional lines to each allocation to pay for employees' insurance and retirement contributions so that the agency did not have to indent their allocation to pay into Social Security or Medicare. Historians interested in employee compensation could use these budgets to track how social welfare organizations covered such costs. Finally, the budgets also include statistical information on JCC membership and enrollment in programs like the nursery school, day camp, and senior center.

If this description makes these documents seem organized or simple, I must confess that there are several pitfalls to examining them over a long durée. The template of the budget sheets changed over time as the FDC changed its accounting practices, making certain comparisons difficult. Also, frustratingly, if the JCC ran any programs that were funded entirely by another source of income (meaning it received zero dollars of support from Federation), the agency did not have to list that form of income. The Federation budgets worksheets, unfortunately, are not a complete accounting record for each agency. 

The FJP Annual Agency Files are nonetheless valuable sources to anyone interested in the history of New York City, social welfare, or American Jewish communal politics. The frequency with which agencies ran deficits raises questions about how, and on what, these agencies spent most of their FJP allocation. By digging into the back pages of the budgets, it’s clear just how many items JCCs had to pay for beyond salaries and space rental—and thus, how often they had to prioritize program maintenance over innovation. 

Forensic Accounting

Early on in my dissertation research I noticed that, in the 1960s and '70s, JCCs in New York City began to receive money from the government to pay for programs like Head Start preschool classes and senior citizens centers. The question for me then became, why? Why would a Jewish agency funded by private Jewish philanthropy and devoted to serving the local Jewish community take public money? Especially considering that public money must be used to serve the public, not only one distinct group of Americans.

I had a few hypotheses:

  1. They needed the money. Maybe, because of suburbanization, fewer people were joining the JCC and so they were making less money from membership dues? Maybe, because of suburbanization again, fewer people were living in New York and so fewer donations were being made to support the city's Jewish communal organizations?
  2. They wanted to provide more social services. Maybe the social workers that staffed and lead these JCCs wanted to improve the lives of their members? Maybe they wanted to improve their communities? Maybe they believed it was more important to take care of the public good and welfare of society than to maintain the JCC as an exclusively Jewish space?

I suspected that the answer was not so simple, and that the truth would be a combination of several of these hypotheses. While I could read about the opinions, decisions, and actions of JCC workers and leaders in the minutes of JCC board meetings, or in their annual reports, or in professional journal articles they wrote about their experiences, I could only find information about money in one place: their annual accounting audits.  

That's how I found myself, in February 2015, digging through archival boxes filled with budget spreadsheets from four different JCCs located throughout Manhattan and the Bronx: Educational Alliance, the YM-YWHA of the Bronx, the YM-YWHA of Washington Heights-Inwood, and Bronx House. I took thousands of pictures of legal-sized paper divided into elaborate tables filled with numbers. I had no idea what I was looking for, nor what I was looking at, so I just snapped the photos and hoped that I could figure it all out later.  

A year and a half later, I finally reached the point in the dissertation where I was ready to write about how the JCC financed their programs. About a month ago I began to read through the documents I'd photographed, and I realized that I had a lot to learn before I could understand what I was looking at. It wasn't just terminology like "a/c" (accounts current) or conventions (fiscal years versus calendar years) but also basic mathematical and economic principles. 

I never expected that, in becoming a professional historian, I would find myself practicing a form of forensic accounting. My work may not be intended for the court of law, but I am piecing together how funds were made and spent in order to establish evidence for an argument. As someone who is not particularly facile with mathematics, accounting, or economics, I would not have expected to enjoy this foray into quantitative analysis. Surprisingly, I’ve actually loved it! It has forced me to learn new skills (especially in Excel), brush up on old ones (basic math calculations), and to think in new ways about the value and purchasing power of the dollar. So this week, I will be posting a series about how to work with historical budgets and accounting documents—particularly those created by the agencies of the Federation of Jewish Philanthropies of New York (FJP)—and how to analyze them to support historical arguments.

Stay tuned!

When Bad Things Are Good

My father-in-law, who generously does my taxes for me, always says that April 15 is Opposite Day: tax season is the only time of year when bad things are good and good things are bad. Lost money in the past twelve months? Great! You can probably count on getting some cash back from Uncle Sam in June. 

This week, my research presented me with this same perverse logic. The third chapter of my dissertation relates how the JCC movement, at the height of Civil Rights activism in the early 1960s, came to declare their support for an open membership policy that accepted Jews and non-Jews as full Center members. I've been reading through documents from this period all week, and I encountered several studies that the Jewish Welfare Board made during the 1950s to determine the extent of non-Jewish membership in Centers throughout the United States. Two of these studies revealed that several Jewish Centers had determined to maintain a Jews-only membership policy in order to exclude non-white members from using their facilities. These Centers, which were located in both northern and southern cities, carefully hid this racial discrimination behind the justification that Jewish Centers had to uphold their "Jewish purpose." How terrible to uncover such a shameful act! And yet--I confess--what an exciting discovery!

My reaction does not reflect pure callousness, nor am I attempting to shame my grandparents' generation for my own personal aggrandizement. This chapter of my dissertation describes the evolution of a debate, and a debate inherently has two sides--I'm celebrating having found the record of my second interlocutor in this dialogue. It's not particularly thrilling to bear witness to the uncomfortable reality of midcentury racial prejudice, nor is it surprising, but I do believe it's of the utmost importance to share and reflect on this historical reality. So as a researcher, in unearthing these records of racism, a bad thing became good.

Describing this dissonance to a friend, he remarked that it could be turned into a great headline for (satirical newspaper) The Onion: "Local Historian Ecstatic to Announce Discovery of  New Genocide." 

Foresight

On Monday, June 5, 1950, a group of conference-goers filed into a room to participate in a session entitled "The Need for a Central Archives." Attendees were in Atlantic City for the Annual Meetings of the National Conference of Jewish Social Welfare, the National Association of Jewish Center Workers, and the National Council for Jewish Education. For five days, Jewish communal workers and educators could sit in on panels and lectures, visit with colleagues at meals, and contribute to committees that were charged with guiding these professional fields. The Conference Program was filled with practical panels like "Dynamics of Inter-Relationships in the Marital Counseling Process," "Characteristics of Youth Programming in the Synagogue-Center," and "Jewish Music Activity in the Center." Professionals could learn how to improve their practices and processes and could gather new ideas for programming--it was all directly applicable to the present. The Conference Program, however, described "The Need for a Central Archives" this way:

“The purpose of this meeting is to discuss the need for preserving institutional and organizational records and archives in the fields of Jewish community organization and social work, as well as methods of making them available for historical, social and professional research.”
— Program, 1950 Annual Meetings. Association of Jewish Center Workers Collection (MS-654), Jacob Rader Marcus Center of the American Jewish Archives (Cincinnati, OH). Box 7, Folder 4.

This panel was forward-thinking. It pushed Jewish communal workers and educators to consider their legacy. How would future Jewish communal professionals learn from the past and continue to improve the field? 

My dissertation could not be written without the foresight of the men (sadly, yes, all men) who led and participated in this conference session. As they went back to their agencies, Federations, and associations, they implemented filing systems (executed by women, their secretarial staff) to save and preserve the history of their work. Their forethought means that historians can now  study how these organizations made decisions, big and small, and how those decisions had an impact on the communities they served.