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April 23, 2019

Where Does $100 to the JDC Go?

by Anne Paddock

The American Jewish Joint Distribution Committee (JDC) is a a non-profit 501 (c) 3 based in New York City. The organization is “the world’s leading Jewish humanitarian assistance organization” so you would expect this organization to raise a lot of money, and they do.

In 2017, the JDC raised $333 million of which they awarded $209 million ($63 out of every $100) in grants. The remaining revenue – $124 million – was primarily spent on staff compensation, office-related expenses, travel and conventions, and fees for services. JDC did not spend $16 million of the revenue raised, using these funds to increase the organization’s fund assets, which had a net balance of $394 million at year-end 2017.

REVENUE

The $333 million of revenue raised in 2017 came primarily from three sources:

  • $303 million:  Contributions, Gifts, and Grants (including $42 million from the government)
  • $ 23 million:  Gain on the sale of assets, investment income, and rental income
  • $  7 million:  Program services (participation and partnership fees, preschool, Joint Israel, apt mgmnt)

EXPENSES

Expenses can be viewed two ways:  by broad general category (i.e. grants, programs, management, and fundraising) or by specific line item category (i.e. grants, compensation, office, travel and conferences, etc). Each are beneficial with the latter providing more detail on how revenue was spent.

Expenses by Broad General Category

The $317 million in expenses were categorized as follows:

  • $209 million (63% of revenue):  Grants
  • $ 71 million (21% of revenue):  Program Services
  • $ 26 million (8% of revenue):  Management
  • $  3 million (1% of revenue):  Fundraising

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 63:  Grants

$  37:  Revenue Remaining

-$ 21:  Program Services

-$  8:  Management

-$  1:  Fundraising

-$ 30: Subtotal Program Services, Management, and Fundraising

$  7:  Revenue Remaining:  To Fund Balance

As illustrated above, $62 out of every $100 in revenue was spent on grants, almost all of the grants made ($207 million of the $209 million) were to foreign organizations (416 grants greater than $5,000 to other 501 (c) (3)’s and 48 grants to other organizations. Geographically, and in terms of revenue, most of the grants were to organizations in Russia and Newly Independent States ($102 million), the Middle East and North Africa ($59 million), and Europe, Iceland, and Greenland ($38 million).

Expenses by Specific Line Item Category

The $317 million in expenses were categorized as follows:

  • $209 million (63% of revenue):  Grants
  • $ 66 million (20% of revenue):  Compensation
  • $ 18 million (5% of revenue):  Office-related expenses
  • $ 10 million (3% of revenue):  Travel and Conferences
  • $  8 million (2% of revenue):  Fees for Services (investment, acct, legal, and other)
  • $  3 million (1% of revenue):  Interest, bad debt, depreciation
  • $  3 million (1% of revenue):  Marketing, Printing, Publications, Other

As illustrated above, the single largest expenses category was grants which comprised $209 million or 63% of revenue.  $108 million (or 32% of revenue) was spent on running the organization with the largest organization support expenses compensation which totaled $66 million for the 169 employees, an average of $390,000 per employee, which seems excessively high given that only 36 employees received more than $100,000 in compensation.  The most highly compensated individual was David Schizer, the Executive VP and CEO who was compensated $919,088 in 2017.

Using the above information, $100 in revenue was spent as follows:

 $100:  Revenue

-$ 20:  Compensation

-$  5:  Office-related expenses

-$  3:  Travel and Conferences

-$  2:  Fees for Services (investment, acct, legal, and other)

-$  1:  Interest, bad debt, depreciation

-$  1:  Marketing, Printing, Publications, Other

-$ 32:  Total Organization Support Expenses

$ 68:  Revenue Remaining

-$ 63: Grants

$  5:  Revenue Remaining:  To Fund Balance

As illustrated above, $32 out of every $100 in revenue was spent on organization support while $63 out of every $100 was awarded in grants. $5 out of every $100 in revenue reported was no spent and added to the fund balance.

SUMMARY

The JDC raises hundreds of millions of dollars annually ($333 million in 2017) and had nearly $400 million in net fund assets at year-end.  They awarded 63% of what they collected – $209 million – in grants primarily to organizations in Russia and Newly Independent States, the Middle East and North Africa and Europe, Iceland, and Greenland.  $32 out of every $100 was spent on organization support, primarily compensation ($66 million for 169 employees which appears to be very high noting the CEO was compensated $919,088), office-related expenses, and travel and conferences.

To read the IRS Form 990 (2017) for the JDC, click here.

Read more from Non-Profits

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