asset squandering, Board Malfeasance, DUBIOUS EXECUTIVE, financial mismanagement, Ina Levine Jewish Community Campus, indiscriminate killing, JCA, Jewish Community Association, Jewish Community Association of Greater Phoenix, Stuart Wachs, Valley of the Sun Jewish Community Association
It is axiomatic that every time the residents of Gaza, the West Bank, or Southern Lebanon embark on a missile launching spree and Israel retaliates, that the international press agencies populate their headlines and stories with the the numbers of civilian casualties among the Arabic speaking population. For news agencies marketing their intellectual property, this makes great sense. There are far greater numbers of Muslims than Jews, and of course the Arab population is much larger than the Jewish population. For the news agencies, which are part of businesses, it is prudent to market to the widest possible audience. It is also axiomatic that every Jew you can speak to will lament the fact that the world is not examining the facts, and the press is not examining the facts, and that the stories are, of course, slanted against the Jews.
I have been encouraged to read two articles in the main stream digital press which actually address this question. One article, which appeared in Slate, titled “Is Israel Killing Indiscriminately in Palestine?” concludes, with an analysis of the facts, that Israel’s conduct is actually the gold standard of behavior during warfare and that all nations, including Israel, should be held to this standard. The second article I read with interest is called “The lopsided death tolls in Israel-Palestinian conflicts” which appeared in the Washington Post. This article provides a more clinical explanation for these factors. This article is neutral, but certainly does not in any way praise Israel, it is just an examination of the facts. Still, I am always encouraged when facts can be examined and the truth can see the light of day.
We are confounded by a very simple truth: Jews everywhere demand that the world question the press and carefully examine the facts surrounding the oft repeated charges of indiscriminate killing by the IDF, but we allow The Jewish Community Association to operate without an examination of their facts. There is no willingness on their part to be transparent, only a willingness to hide the truth. As Mr. Kramer, board chair of the JCA, so eloquently explained to me: there are things the masses must not be told. They will have until November of this year to file their tax returns from 2013, and it will be the close of 2014 and we will have no information for two years, while being asked to give our precious resources to them so that they can squander them any way they see fit.
When this Blog addresses the question of whether the JCA is killing off the Jewish Community in Phoenix, we have only their financial reports to examine (or the lack of their financial reports to examine), what we can piece together from the incessant turnover in the executive suite, and their lack of transparency and good governance. We also look through their historical performance as the bankrupted JFED. It is often said that past performance is the best indicator for future performance, but this is a gross oversimplification. This only holds true if the following is true:
- High-frequency, habitual behaviors are more predictive than infrequent behaviors.
- Predictions work best over short time intervals.
- The anticipated situation must be essentially the same as the past situation that activated the behavior.
- The behavior must not have been extinguished by corrective or negative feedback.
- The organization must remain essentially unchanged.
- The organization must be fairly consistent in its behaviors.
So, when one looks at the JCA, every condition enumerated above, 1- 6, holds completely true for the JCA. Their behavior is the same, the board is basically the same, the economy of Phoenix is basically unchanged since the JFED was driven into insolvency, and nothing in their behavior suggests that they care at all about feedback from the community.
1) We have no idea how it happens that the JCA’s financial statements are not yet available to the public for 2013? Given their past performance, will they even be in business in 2015? How is is that 46% of every allocable dollar goes to JCA overhead and never makes it to the Jewish Community.
2) Stuart Wachs, the CEO of the JCA, has fired or replaced every one of his hand picked executives since arriving here in Phoenix.
3) Board Governance is still a disaster. The JCA has made a $30,000 loan to Stuart Wachs, which is absolutely bizarre considering he received a raise from $198,000 (Head of Sabes JCC in Minneapolis) to $245,833 to run the JCA. In essence, money donated to the JCA has been loaned to Stuart Wachs because his $245,883 salary is just not enough. Review this passage from Charity Navigator’s website to learn what they have to say about loans to insiders:
Insider Transactions and Conflicts of Interest
Summary of Sarbanes-Oxley Provision
The Act generally prohibits loans to any directors or executives of the company.
Relevance to Nonprofit Organizations
Nonprofits are presently highly regulated with respect to financial transactions that take place within the organization. Private inurement, excessive personal benefit, and self-dealing all cause serious penalties for any nonprofit that steps out of line. “Intermediate sanctions” laws specifically address compensation and excess benefit transactions with “disqualified” individuals, generally meaning board members and executive staff.
Providing private loans to insiders—the specific item included in the Sarbanes-Oxley Act—is not a common practice in the nonprofit sector. However, when it has occurred, it has raised problems either from the perception of a conflict of interest or because it has not been appropriately documented as part of executive compensation. In addition, in some states, nonprofit law expressly prohibits loans to directors and officers.
Because the practice of providing loans to nonprofit executives has been a source of trouble in the past and because this practice is specifically prohibited under Sarbanes-Oxley and in some states is prohibited for nonprofit organizations, it is strongly recommended that nonprofit organizations not provide personal loans to directors or executives.
If such loans are provided, they should be formally approved by the board, and the process for providing the loan should be documented, and the value and terms of the loan should be disclosed.
To guide the board and staff in independent decision making, the organization must have a conflict of interest policy with disclosure and this policy must be enforced without fail.
4) Now we learn that the Interim CFO is the wife of a Board Member of the JCA. When Stuart’s contract comes up for renewal in the next months, I am guessing that there will be at least one board member who is thinking that if he supports Stuart, his wife might keep her job at the JCA, and this board member is a relatively new board member who does not have that legacy connection to the disastrous behavior of the agency that many of the other long-standing board members have.
5) There is a board Member who sells insurance to the JCA. In fact, this board member sells $329,537 worth of insurance to the JCA. I wonder if this board member will vote to renew Stuart Wachs’ employment contact?
It is beyond obvious that the Board of the JCA is abrogating their responsibility by allowing this type of disgraceful behavior to occur unchecked.
Here is what should happen: 1) The Jewish Community should withhold their money from the JCA until answers are provided. 2) The JCF should step forward and alert their fund advisors that there are serious issues of governance and transparency at the JCA and that there is no certain way to know whether the money earmarked for the JCA or VOSJCC will be delivered to an institution that will be actually functioning. The Community must step up and demand accountability, and it would be a prudent start for the JCA to reform their Board and ask the Board Members with obvious conflicts of interests to step down. The lives that are in the balance here are not under immediate threat like in Israel, but they are under a relentless progressive threat that all but insures that there will be little to nothing left in the way of assets to care for the most vulnerable among us.
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