Nancy Falchuk tries to steer Hadassah through the economic crisis.
By RUTH EGLASHnancy falchuk 248.88(photo credit: Courtesy)
Hadassah national president Nancy Falchuk is surprisingly pragmatic considering the challenges she faces in navigating America's largest volunteer women's organization and one of the central funders of cutting-edge medicine in the State of Israel through the current global economic crisis and critical changes in the philanthropic landscape.
"The world has been turned upside down," admits the well-dressed mother and grandmother, now in her second term as president of this 97-year-old Jewish women's charity. "But out of every crisis rises an opportunity and I truly believe that when the dust settles, we'll be an organization that has continued to stick to its core mission."
We are sitting in the business lounge of Jerusalem's Inbal hotel and Falchuk, who arrived after a short business stop in Paris only hours earlier, talks with unfaltering enthusiasm about the Zionist mission of this organization, which has been close to her heart nearly her entire life.
"We're the second largest employer in the city of Jerusalem and that's not bad for a bunch of women," quips the former New Yorker, who made Boston her home as a young nursing student.
She goes on to describe the organization's current project, the creation of a 14-story, $318 million state-of-the-art hospital tower next to the present site of the Hadassah-University Medical Center campus in Ein Kerem, on the outskirts of the capital.
"There is some of the finest medicine in the world being practiced in an antiquated building that was opened in 1961," states Falchuk. "[The current building] is disgusting and our goal is to build the most beautiful and most modern academic health-care facility. It's the largest building project in Israel today and we are still very committed to it."
However, with economic recession touching more and more people - not to mention the recent Bernard Madoff investment scandal which was said to have lost Hadassah some $90 million and hurt the savings of some of its key donors - Falchuk is under no illusion that the influential organization needs to make serious changes not only to keep the new hospital project on track but also to stay ahead of the game and guide Hadassah through to its 100th birthday in 2012.
"We've had to make some staffing cuts and encourage our volunteers to go back to 'stuffing envelopes,'" she says, referring to the traditional task of nonpaid staff who once - before the Internet - worked diligently sending out mailings to get other women involved in supporting Israel.
Falchuk explains that the only way forward for Hadassah is to go back to its "roots" and to rely more heavily on the input of its roughly 300,000-strong membership based mostly in North America, with a few chapters scattered across Europe and South America.
"They are our bread and butter," she says proudly. "Besides, when you do it this way you get so much more out of it - the camaraderie and the feeling that you are really helping."
STARTED by social worker and pioneer Zionist Henrietta Szold in 1912 at a meeting of the Daughters of Zion organization in New York City, Hadassah's initial goal was to "embrace practical Zionism," with proactive work to help meet the health needs of the population living in Palestine.
According to information on Hadassah's Web site, because the meeting took place around the time of Purim, the women decided to call themselves "the Hadassah chapter of the Daughters of Zion," adopting the Hebrew name of Queen Esther.
With Szold installed as the first president, the organization grew rapidly, opening five chapters in New York, Baltimore, Cleveland, Chicago and Boston within its first year. During that time, the organization's charter was adjusted to make clearer its two main goals: to begin public-health initiatives and nurses' training in Palestine, and to foster Zionist ideals through education in America.
In 1913, Hadassah sent its first two nurses - Rose Kaplan and Rachel (Ray) Landy - to work in Palestine. While the two succeeded in setting up a small public-heath and welfare station in Jerusalem, it was not until 1939 that the first Hadassah-University Hospital opened its doors on the present site on Mount Scopus.
Although the hospital actively treated (and still does) all inhabitants - Jews and Arabs - of the area during World War II, when the war broke out for Israel's independence in 1948, an attack by Arab terrorists on a convoy of Hadassah and Hebrew University doctors, nurses and other personnel caused the women's organization to evacuate the Mount Scopus facilities and set up a makeshift hospital near Ein Kerem.
For Falchuk, it is this emergency response - almost a fabled part of Jerusalem's modern history - which typifies Hadassah's basic principles.
"No matter what happened in Israel or in the world over the past 97 years, Hadassah has managed to survive," she points out. "When we lost the hospital on Mount Scopus, we did not have a business plan or a clear strategy, we just went ahead and created another hospital."
TODAY, luckily, Falchuk does have a plan: a trimming down of expenditures that will hopefully ease Hadassah through the current economic crisis and keep it strong for many more years to come.
"I know most people do not believe this, but we started making our economic reforms long before we knew that the market would crash or about Madoff," says Falchuk, who refuses to delve too deeply into the far-reaching investment scandal for legal reasons. "Hadassah has 24 investment managers and Madoff was only one small piece of our puzzle. Actually, the problem is not with Madoff, although we did rely on cash withdrawals from him, our main problem today is the market."
Falchuk, however, seems to be one step ahead as she highlights that her election campaign for the Hadassah presidency two years ago was based on streamlining the organization financially and pushing through some economic reforms. She also points to a December 2 meeting, a week before the Madoff scandal broke, at which Hadassah's top executive voted to accept some of her key economic suggestions.
"When I took over two years ago, even though the market was good, I knew that we had to restructure the organization," Falchuk recalls. "We were spending a great deal of money on good things, but we could've been doing things differently and saving money - reducing our expenses and increasing our revenue.
"We were running some great programs but we had moved away from our core mission and I felt it was time we went back to that."
She also refers to the changes in the philanthropic world, with many donors insisting on accountability and targeted giving for certain projects, as a guideline for the new approach.
"Today in the philanthropic world people want to be more specific," she says. "And exactly for that reason we had to accept that it was much easier to fund-raise for capital projects."
Hadassah hospital's new emergency room and its extensions to the Mother and Child Pavilion are good examples of such specific projects.
Given these constraints and the looming recession, the December meeting elected to find ways to trim expenses. Until that point, Hadassah had been sending roughly $91 million to Israel each year to cover the operating costs of both its hospitals, as well as for its Youth Aliya villages run in conjunction with the Jewish Agency for Israel, Hadassah College of Technology in Jerusalem, and for youth movement Young Judaea and its relevant programs.
According to Falchuk, not long before the US market crashed, she had informed the Hadassah Medical Organization that it would need to start "absorbing more of its own operating costs, so that [Hadassah Women's Organization] can concentrate on the capital budget for the new hospital tower."
The hospital's operating budget was then cut from $40m. to $15m., with the government promising to pick up some of the loss, she explains.
Hadassah has made other cutbacks too, with Young Judaea, North America's only pluralistic Zionist youth movement, having its funding reduced by some $2m., and the Hadassah College of Technology also suffering losses. Most recently, Hadassah put two multimillion-dollar Jerusalem properties - one utilized by Young Judaea and the other by its alumni branch, Hamagshimim - onto the market.
"We are not actively trying to sell them but will, of course, accept offers on them," said a spokeswoman for Hadassah in Israel. "If we do sell them, Young Judaea will move its operations to another location in the capital. For us, it's the programs that are important not the physical buildings they are housed in."
Falchuk believes these steps need to be taken, not only to help Hadassah move forward during the recession but as a chance for the organizations it supports to find their own independence.
"Young Judaea has had to do the same thing that we did - reorganize," she says. "Hadassah has been supporting Young Judaea to the tune of $8m. and it was wonderful, but at a certain point they needed to become more self-sustaining. If you have the expectation that someone will cover you for x amount of dollars then you are not going to even think about making cutbacks."
And, Falchuk says, she has already challenged the youth movement to utilize its vast database of alumni, many of whom are very active in the North American Jewish community.
"If the youth movement wants to succeed, then these alumni really need to step up to the plate," she says.
AS WELL as trimming back on some of its projects here, Falchuk says that the organization is increasing its attention to its members in North America and around the world.
She estimates that over the past 10 years Hadassah's membership has remained constant, with some 274,000 women members and 32,000 male associates.
"Our support is coming from somewhere because despite all the attrition, we've stayed the same size," says Falchuk. "I believe that many women in their 40s and 50s who join are looking for something stimulating on their own level.
"I believe that every woman can find her niche in Hadassah and because we are the only Zionist organization without a political bent, then we can really focus on educating people about Israel."
And Falchuk is humble about the support each person can give back to the organization.
"Our recovery will not come from the million-dollar givers but rather from the 300,000 members as a collective who sustain us," she says. "[The terrorist attacks of] September 11, 2001, occurred and travel has never been the same; [the Madoff scam of] December 11, 2008, happened and investments will never be the same. We are not a Jewish federation and it has always been about relying on the smaller donors."
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