Hadassah Cuts Staff, Closes Offices, Spins Off Young Judaea To Stem Red Ink

Recent Financial Challenges Include $45 Million Madoff Bill

Change: After 44 years under Hadassah, Young Judaea will become an independent organization.
COURTESY OF YOUNG JUDAEA
Change: After 44 years under Hadassah, Young Judaea will become an independent organization.

By Nathan Guttman

Published June 29, 2011, issue of July 08, 2011.
  • Print
  • Share Share

Correction Appended

WASHINGTON — Hadassah, the storied women’s Zionist organization, has shut down offices throughout the country and plans to spin off Young Judaea, its affiliated Zionist youth group, in part to offset recent financial setbacks, including a $45 million payment to the federal government related to its unwitting participation in Bernard Madoff’s Ponzi scheme.

Hadassah officials say that the moves stem from not just financial considerations, but also from a broad reform and restructuring drive that predate its Madoff liabilities.

“Of course it hurts, but we planned for it and were prepared,” said Nancy Falchuk, Hadassah’s outgoing national president. She explained that in the two years since the Madoff scandal broke, the group set aside funds so that it would be prepared to face the Madoff settlement. This need for cash, she added, sped up several processes that had already been under way and that were aimed at making Hadassah more efficient.

For the past two years, the group has been engaged in a delicate balancing act, trying, on the one hand, to cope with financial losses in a tough economic environment, and on the other, attempting to grow its membership base and maintain its activity. The results on the ground reflect this mixed goal: large staff layoffs and a scaled-back physical presence, but at the same time, a hike in membership and on-schedule progress in building its largest ever project in Jerusalem’s Hadassah hospital.

As part of a settlement with Madoff’s trustees, Hadassah was obliged to pay back $45 million of the profits it gained on its investments with Madoff, a sum that will go toward compensation to other investors that had lost money in the scam.

The most recent and dramatic of the group’s restructuring moves is the decision by Hadassah to turn Young Judaea into an independent organization. Hadassah has been the youth movement’s sole sponsor for the past 44 years, but the group began discussing Young Judaea’s future more than five years ago, officials said, seeking ways to reinvigorate the 102-year-old movement.

The surprising outcome of those discussions, announced late June, was the emergence of a group of alumni who have come back to form the founding board of a new, independent Young Judaea, which will now fund itself.

“It was like a gift,” Falchuk said of the group of former young leaders agreeing to take over the movement. But it will also relieve cash-strapped Hadassah of the need to fund the program. Hadassah would not provide the dollar amount of the funding that would be saved, but officials of the group made clear that it will continue sponsoring the movement during the transitional period. “We didn’t desert Young Judaea,” Falchuk said, stressing that the decision to send the movement off to independence was “not financial, but mission driven.”

Another money-saving process that has been accelerated because of Hadassah’s cash flow troubles is the restructuring of the group’s U.S. operations, which included closing 16 offices nationwide and consolidating the work of five others. Since 2009, Hadassah has fired 80 workers, one-quarter of the organization’s staff.

But as the group prepares for its 100th anniversary, which comes next year, its leaders are stressing that despite financial hurdles, Hadassah is about more than just cutbacks and downsizing. The group, which retains a sizable endowment, is still on target in building its $300 million hospital tower in Jerusalem, one of the largest philanthropic projects taking place in Israel. It also registered 28,000 new members since January as part of its centennial drive, and hundreds of its members enrolled in the anniversary mission to Israel. “Looking at all this,” Falchuk concluded, “I have the feeling that the glass is half full.”

Contact Nathan Guttman at guttman@forward.com


CORRECTION: In an earlier version of this story, Hadassah is improperly characterized at the top of the story as having terminated its relationship with Young Judaea. As the story noted later, the transition will take place in stages. Also, an earlier version of the headline incorrectly suggested that Hadassah’s cutbacks were wholly attributable to its Madoff investments. In fact, the cutbacks have multiple causes. And a photo caption incorrectly reported the length of the relationship between the two groups. Hadassah had been the sole support of Young Judaea for 44 years, not 102 years.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • A new initiative will spend $300 million a year towards strengthening Israel's relationship with the Diaspora. http://jd.fo/q3Iaj Is this money spent wisely?
  • Lusia Horowitz left pre-state Israel to fight fascism in Spain — and wound up being captured by the Nazis and sent to die at Auschwitz. Share her remarkable story — told in her letters.
  • Vered Guttman doesn't usually get nervous about cooking for 20 people, even for Passover. But last night was a bit different. She was cooking for the Obamas at the White House Seder.
  • A grumpy Jewish grandfather is wary of his granddaughter's celebrating Easter with the in-laws. But the Seesaw says it might just make her appreciate Judaism more. What do you think?
  • “Twist and Shout.” “Under the Boardwalk.” “Brown-Eyed Girl.” What do these great songs have in common? A forgotten Jewish songwriter. We tracked him down.
  • What can we learn from tragedies like the rampage in suburban Kansas City? For one thing, we must keep our eyes on the real threats that we as Jews face.
  • When is a legume not necessarily a legume? Philologos has the answer.
  • "Sometime in my childhood, I realized that the Exodus wasn’t as remote or as faceless as I thought it was, because I knew a former slave. His name was Hersh Nemes, and he was my grandfather." Share this moving Passover essay!
  • Getting ready for Seder? Chag Sameach! http://jd.fo/q3LO2
  • "We are not so far removed from the tragedies of the past, and as Jews sit down to the Seder meal, this event is a teachable moment of how the hatred of Jews-as-Other is still alive and well. It is not realistic to be complacent."
  • Aperitif Cocktail, Tequila Shot, Tom Collins or Vodka Soda — Which son do you relate to?
  • Elvis craved bacon on tour. Michael Jackson craved matzo ball soup. We've got the recipe.
  • This is the face of hatred.
  • What could be wrong with a bunch of guys kicking back with a steak and a couple of beers and talking about the Seder? Try everything. #ManSeder
  • BREAKING: Smirking killer singled out Jews for death in suburban Kansas City rampage. 3 die in bloody rampage at JCC and retirement home.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.