In the 98 years UJA-Federation has been an integral part of the New York Jewish community, there have been two fundamental pillars on which all our good work rests. The first is the strength of our network of agencies. The second pillar — the one on which everything else is built — is the trust of our donors.
Three of our most visible agencies — FEGS Health & Human Services, Metropolitan Council on Jewish Poverty, and the New York Legal Assistance Group (NYLAG) — have recently disclosed that they are facing significant challenges. While the situations are unrelated and each is distinct, our primary concern is to maintain services for those in need. It is a unique strength of our network that allows us to work closely with the affected agencies, the government, and other agencies within our network to navigate challenges. And, indeed, when agencies have faced difficulties in the past, UJA-Federation has successfully stepped in to make changes.
So we are now actively responding to each challenge, learning from it, and strengthening our community going forward.
Many of us have firsthand experience with the quality of the agencies in the UJA-Federation network. FEGS, in particular, was well-lauded for its work, which is why its current situation is so painful to accept. As you may know, FEGS recently announced a major loss in its last fiscal year and the expectation of significant continuing losses. After reviewing what would be needed to stabilize its finances, its board decided that its operational problems were too deep to be resolved while it continued to run its programs and that it would be in the best interests of its 135,000 clients to transfer programs and services to other providers. Right now, we expect that the programs that are core to UJA-Federation’s mission will find new homes in the UJA-Federation network. That process is underway, and we’re doing everything we can to help it go as smoothly as possible.
Met Council is still recovering from the discovery in mid-2013 of a long-running and well-hidden fraud perpetuated by a few individuals. We’re working with Met Council, along with state and local officials and other stakeholders, to maintain services for clients. At NYLAG, the recently retired founding president and attorney-in-charge is currently the subject of a government investigation. NYLAG’s leadership assures us that the agency’s finances, operations, and programs remain strong and services are unaffected.
In recent weeks, in light of the situation at FEGS, we have brought in healthcare industry experts to closely examine specific issues that could affect other human-service agencies, such as the financial and operational impact of changes in how health care is funded. We are exploring more intensive ways to train trustees regarding governance and accountability, and agency executives on business management and governance. We established a senior task force, led by past UJA-Federation presidents and including veteran lay leaders and UJA-Federation staff, to monitor developments at FEGS and represent UJA-Federation interests as this complex situation develops. Our goal is to ensure continuity of services for those in need and take the lessons learned to apply going forward.
We have always made investments in strengthening the nearly 100 agencies in our network — each an independent 501(c)(3) with its own board and management — and we are committed to making further improvements. These recent situations have only underscored the need to learn all we can from those instances when an individual agency has problems. We are actively reviewing what went wrong, especially at FEGS. However, it is clear that in a time of reduced government funding for health care, agencies must adapt, carefully controlling and tracking their individual program costs and overhead.
Our intent is to emerge on the other side of this difficult and painful time with an even stronger network, comprised of agencies with the highest standards of governance and accountability. There is nothing that matters to us more than maintaining services for the people who depend on us to make their lives better — and upholding the trust of our donors. We intend to fully honor both commitments as we have for close to 100 years, and as we will for many years to come.
Shabbat shalom