Officials at UJA-NY tell 'Post' they're worried about Neuberger Berman, a Lehman Brothers subsidiary.
By ALLISON HOFFMAN, JERUSALEM POST CORRESPONDENTWall Street trader 224.88(photo credit: AP)
US Jewish social service agencies and nonprofits say they expect this week's string of bankruptcies, buyouts and takeovers on Wall Street to severely cramp their end-of-year fund-raising as individuals curtail their donations and whole companies suspend their philanthropic programs.
Officials at the UJA-Federation of New York, which supports 102 social service agencies in the New York area, told The Jerusalem Post Wednesday they were particularly anxious about the fate of Neuberger Berman, a subsidiary of Lehman Brothers whose executives have historically contributed a significant proportion of the approximately $42 million raised annually from Wall Street.
"They've been longtime supporters of UJA and the State of Israel," said Paul Kane, a vice president of financial resources. "Now we're in a very tricky situation, because we know there are people who won't be able to give to us this year and at the same time we know there's a huge cut in state budgets."
Neuberger, a mutual fund management company acquired by the now-bankrupt Lehman Brothers in 2003, continues to operate as executives try to negotiate a sale.
Before its sudden collapse this week, Lehman Brothers was a generous corporate benefactor to an array of charities, from the Robin Hood Foundation that fights poverty in New York City to the Jewish Museum in Manhattan and the Aleh Negev rehabilitation center near Ofakim.
"This is just a crazy time," said Marc Friedman, an executive at Building with Books, an after-school program that held a regularly scheduled board meeting last week at Lehman's headquarters in midtown Manhattan, days before the firm's demise.
"I can't predict what people will do in the fourth quarter - it's always the biggest quarter for giving, and we're just working hard to hit our targets," said Friedman, who oversees a $6.4m. budget.
His organization may be cushioned by the fact that Lehman Brothers' donations were channelled through an independent foundation. Nonprofits that benefited from the largesse of the world's largest insurer, American International Group, which was taken over late Tuesday by the US Federal Reserve, may not be so lucky: Its giving, to a variety of microfinance and education-focused organizations, came directly from corporate coffers, which are now frozen.
"You can call back later and we'll be able to give you a better idea of what's going on," company spokesman Rich Loconte told the Post on Wednesday morning.
Officials said individual and corporate giving fell in 2001 after the September 11 attacks, but among Jewish donors the second intifada spurred a level of contributions to causes benefiting Israel that is absent this year.
"We got hurt then on the annual campaign, but we raised more money than we ever had before for Israel," said Kane, of UJA.
He said donors whose jobs were secure had offered matching grants this year, and plans were being drawn to host Wall Street job fairs and find ways for financial professionals who had lost their jobs to contribute their time instead of money.
The squeeze on private giving exacerbates looming cuts in public funding, especially for Jewish social services agencies that typically get at least a third of their budgets from state and federal programs. New York Gov. David Paterson has estimated that the state may lose as much as $1 billion in tax revenues as a result of the Wall Street chaos.
"There's an enormous loss of tax revenues if these companies close or leave town," said Mimi Abramovitz, a professor of social policy at Hunter College's School of Social Work, part of the City University of New York.
"So these agencies won't disappear, but they'll have to tighten up who they serve and how they give," Abramovitz said. "It's grim all over."
One such agency, the Jewish Association of Services for the Aged, already anticipates cutting its budget as much as 6 percent for this year, limiting the assistance the agency will be able to give to programs that go beyond the basics of providing food and heat for the winter.
"There are seniors in the city who will suffer," said Aileen Gitelson, JASA's CEO.
"We still can't quantify what it will mean this year, because we still have our Hanukka appeal, and it's hard to know how many jobs will be lost, what's going to happen with the city," Gitelson said. "I just kind of feel this winter is a big question mark."
