Needs and Responses

JCCs

Needs

Loss of almost all revenue sources, due to closure of physical plants.

High overhead costs for maintaining empty facilities during closure.

Services can be only partially replaced with online programming, and those generate minimal, if any revenues.

Many are struggling to meet payroll, while others have laid off large numbers of staff. A Philadelphia-area JCC featured in a recent JTA article has laid off all but two of its 178 employees, and Jewish Insider reported on April 13 that more than 700 employees at four San Francisco-area JCCs have been temporarily laid off.

Minimal cash reserves: The JFNA wrote on March 25 that “many JCCs are within weeks of exhausting cash reserves.”

Many expect paying customers to demand refunds for membership services not provided during the closure.

According to the JFNA, the JCC Association estimates that JCCs will incur ongoing costs of 40% of their operating budget during closure. This includes carrying costs for their closed buildings, including insurance, utilities, equipment leases, etc… This represents 15% of the 40% total, with the balance relating to self-insurance costs for unemployment. These factors across the system are estimated at $43M/month. Should JCC’s make the decision to retain core staff during this period, these costs would be greater.

Loans will be of limited help: According to the JFNA, “Business continuity loans may be problematic [for JCCs] because they have no means to recapture lost operating revenue, and because of the uncertainty of the current situation. SBA (CARES Act Small Business & Nonprofit loans) loans may work for some JCCs if they are able to access the portion of the aid program that provide forgivable loans, but for larger JCCs the large number of part-time contractors may push them over the 500-employee cap for this program.”

Restarting operations after closures will also be expensive: JCC Association has done a further analysis about the costs associated with restarting operations after closures, projecting a combined net financial need equal to 22% of pre- shutdown operating expenses. This translates to a system-wide cost of about $24M/month. These figures are based on the expectation that the largest non-governmental JCC programs will quickly re-start: fitness, aquatics, early childhood, after school programs and day camp, as well as the resumption of membership income.

As a result of the larger economic downturn, it is unclear how many paying JCC customers will return after facilities re-open, and it’s expected that many who do will require financial aid: JFNA reports that “JCC Association anticipates significantly reduced revenues at the outset of between 50-70% based on a substantial increase in need-based scholarship support. Expenses will be scaled to the greatest degree possible relative to given operating and regulatory constraints. These numbers are likely to be representative of the average JCC’s reality for a period of six months after the resumption of operations. The estimated shortfall can be expected to be reduced by as much as a third in each of the ensuring financial quarters. The estimated total need for the first full fiscal year is therefore $216 million. The analysis above assumes that there will be a day camp season in 2020. A full camp season will generate $30 million in net revenues. Should the camp season not happen, or should it happen on a shortened or reduced basis, then the estimated financial impact would be increased accordingly. Affiliated overnight camps are also accounted for in the analysis above. Should the overnight camping season be lost, there will be additional need for start-up capital ahead of the summer of 2021.”

Responses

UJA-Federation of New York has allocated nearly $10 million, in a combination of interest-free loans to grants, to help sustain the 22 JCCs across the New York area.

On April 20, the Jewish Federations of North America (JFNA) launched the more than $80 million Jewish Community Response and Impact Fund (JCRIF), supported by a seven foundations, including the Aviv Foundation, the Charles and Lynn Schusterman Family Foundation, the Jack, Joseph and Morton Mandel Foundation, the Jim Joseph Foundation, Maimonides Fund, the Paul E. Singer Foundation, and the Wilf Family Foundation, which will operate in coordination with the JFNA. The invite-only program will be divided in two, with a loan program based at the Nonprofit Finance Fund, providing payroll and basic operational assistance for non-profits in the coming months. JCRF’s focus is to maintain the infrastructure of Jewish life that advances Jewish education, engagement and leadership.

According to JTA, the Kaiserman JCC in the Philadelphia area has opened up a “sustainability fund” to which members can donate that would prioritize staff health insurance — a monthly cost of $20,000 — as well as disability and life insurance, and liability insurance for the building. Six of the approximately 130 preschool families have donated a portion of their April tuition to the sustainability fund, which currently has a total of about $5,400.

Nonprofit Funding Proposals

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  Needs and Responses