Yesterday Jewish National Fund of America CEO Russell Robinson and CFO Mitchel Rosenzweig agreed to repay personal loans they received from the JNF. These loans turned out to be illegal under New York State Law. This news is intriguing to some, but personal to me. I was one of eight National Executive Board Officers who in 1996 were charged with re-establishing the organization after its very existence was threatened by a scandal involving the former executive officers. Following an extensive search, Mr. Robinson was hired as CEO. He took over a JNF that was on its knees. One of his first moves was to bring in Mr. Rosenzweig. The two have been at the JNF ever since.
Both individuals that I knew were men of the highest ability and integrity. They worked tirelessly first to triage the JNF, then lead it to heights never before seen and which few imagined. I was in the Board Room with both innumerable times when they made difficult decisions affecting the JNF’s future. They always stressed the importance of financial integrity and transparency.
One of our goals during the early days of the Robinson administration was to make sure that the JNF, whose financial reporting for many years had been opaque, qualified under each of the approximately 20 Standards for Charity Accountability established by the United States Better Business Bureau. If you think that’s easy, look into it. Within a few years, Mr. Robinson and Mr. Rosenzweig made it happen.
We in the JNF Board had many discussions back then over whether the JNF should set up subsidiaries to which many of the administrative expenses would be charged. This would make the fundraising numbers and expense percentage of the parent organization look better. Such actions were, and probably still are, common practice at many Jewish organizations. We always resisted. It was a matter of faith that the JNF’s numbers would be entirely accurate and not subject to any financial games or gimmicks.
Twenty years ago, the JNF was thrilled to raise $20-30 million. In 2015, JNF’s income statement showed money raised at almost $190 million. In doing so, the JNF retained its top rating among American nonprofit watchdogs like Charity Navigator. Mr. Robinson himself was rated the 26th most influential Jew in 2016 by The Jerusalem Post.
Given all of that, why would these two gentlemen, and the JNF Executive Board (on which I haven’t served in a decade), risk the financial integrity and good name of the organization by allowing it to act as a personal bank? Also, who at the JNF vetted the legality of this transaction? The JNF has an outside legal advisory committee but no paid General Legal Counsel. Perhaps it is time for that position to be created.
A danger for any organization, whether for-profit or not-for-profit, is when successful executives become so associated with the company that it becomes difficult to say no to them. Assuming what has been made public is all that happened, the offences for which New York Attorney General Eric Schneiderman called out Messrs. Robinson and Rosenzweig are rather minor. The loans involved are not large compared to the resources of the company, the two men were being charged interest and the organization can say it was making money on the deals. Still, the JNF is not a financial institution. It is a Jewish fundraising and educational organization with as proud a tradition in the Jewish and environmental worlds as any organization anywhere.
It is easy to understand everyone’s motivation. Public disclosure documents show that in 2015 Mr. Robinson’s salary was slightly over $430,000 and Mr. Rosenzweig’s was approximately $306,000. That isn’t chicken feed, but imagine what a CEO and a CFO at a for-profit company with the JNF’s revenue would receive? It is one of the paradoxes of the not-for-profit world that the top executives associate with very rich people yet are not hugely wealthy themselves. They often are around that world but not of that world. Given their success, it is understandable that the JNF Board wanted to do something positive for Messrs. Robinson and Rosenzweig. That does not excuse the Board, however, for allowing this to happen. Quite simply, the loans violated New York State law.
A new JNF Board takes office in September. Unlike two decades ago, the Board Members will assume their positions with a hugely successful executive staff already in place. Under such circumstances, it will be doubly important for the Board to remember that part of their job is saying no to that staff when necessary.
Until shown otherwise, I will continue to believe in the integrity and honesty of Mr. Robinson and Mr. Rosenzweig. Even the best people, however, make unfortunate decisions and requests. Let’s hope this incident is just a “one-off” for both men. It will remain an obligation of the new Board to ensure that such actions aren’t repeated. They must insist that the reputation of the JNF of America remains sterling and a testament to the positive actions of people like Russell Robinson and Mitchel Rosenzweig.