Report: Seminary Faces Massive Debt
The Jewish Theological Seminary is refusing to address questions about its financial picture following a news report claiming that the institution is facing a major financial crisis.
The New York Jewish Week reported last week that the seminary, the flagship institution of Conservative Judaism, needs to repay a $50 million debt.
The paper, quoting unnamed sources, said the Manhattan institution had “borrowed from internal sources to cover operating expenses over the past few years as interest income from investments plummeted with the stock market and created a gap. Promised donations were also never made.” One unnamed faculty member was quoted as saying the debt required a “speedy repayment.”
Elise Dowell, the seminary’s director of communications, declined to discuss the institution’s financial situation, or to provide the Forward with a copy of the seminary’s annual report or any investment policy statements.
She told the Forward that the Jewish Week article is “factually inaccurate in many respects,” but would not elaborate.
“JTS’s financial position remains strong,” she said. “We are moving ahead in carrying out our mission as the pre-eminent center of scholarship and academics in the Jewish community.”
Dowell said that the seminary’s longtime comptroller, S. David Shapiro, had resigned his post November 9 to become executive director of a Jewish day school in New Jersey. She would not discuss whether Shapiro’s departure was related to the disclosure of the seminary’s financial crisis.
The chancellor of the seminary, Rabbi Ismar Schorsch, did not respond to requests for comment.
The alleged financial crisis comes at a time when the Conservative synagogue movement is facing declining membership numbers and wrenching theological divisions.
The seminary operates a rabbinical school, a cantorial school, graduate and undergraduate colleges of Jewish studies, and a world-renowned library, in addition to the William Davidson Graduate School of Jewish Education.
A December 17 memo was sent from Schorsch’s e-mail address to seminary faculty, staff, students and supporters, extolling the financial health of and record attendance at the seminary, but without directly addressing reports of the institution’s financial crisis.
The nine-paragraph e-mail noted that in the last four years the seminary had hired 16 new full-time faculty members. It stated: “With 61 full-time and 54 part-time faculty members, our faculty is the largest it has ever been and is the single largest concentration of Judaica [sic] scholars on any single campus in the diaspora.” According to the e-mail, 708 students attend the seminary’s five schools and “our endowment now stands strong at $80 million.” The institution’s current borrowings, the e-mail added, “represent less than half of our endowment.”
Schorsch, who initially briefed the faculty on the situation at a meeting in early November, acknowledged in his recent e-mail that the seminary intends to sell a property it had planned to use for graduate housing at 100th Street, a mile from its renowned Broadway campus, and to “direct the proceeds to the institution’s endowment.”
According to the Jewish Week, Dowell blamed stock market conditions and deferred gifts for the seminary’s financial woes.
The seminary changed its status with the Internal Revenue Service in 2000 from an educational nonprofit to a religious nonprofit institution, the Jewish Week reported. Such a change makes the seminary exempt from filing federal 990 forms, which list a nonprofit’s expenses and revenues and the salaries of its top officials. Dowell declined to discuss the issue.
The IRS confirmed for the Forward that two arms of the seminary are not required to file annual returns with the IRS because they claim to be a religious institution: The List College-Graduate Alumni Association and the JTS Synagogue. The library is not required to file an annual return with the IRS because its “income is less than $25,000,” an IRS spokesman said.
Dowell refused to discuss the changes in the seminary’s federal tax status.