NEW YORK ““ A network of philanthropists and family foundations is calling for greater transparency from Jewish religious institutions.
Most American nonprofits are required to file 990 tax forms that make public how the organizations pay their top employees and allocate money to outside organizations. But religious institutions such as synagogues, day schools, yeshivas, and Chabad outposts are under no such obligation.
Prompted by this summer’s money-laundering scandal in Deal and Brooklyn involving a number of synagogues, the Jewish Funders Network has drafted a list of guidelines that essentially would require religious institutions to be as transparent as other nonprofits.
The network, which represents hundreds of major funders of Jewish organizations, is asking its members to insist that the organizations they fund adopt the following standards:
“¢ Organizations should have governing boards that have financial oversight for the organization’s expenses and transactions.
“¢ Organizations should be open to independent audits and should make financial data available upon donor request.
“¢ Compensation of the chief executive should be decided by a compensation committee.
“¢ Organization should draft a code of ethics that includes among other issues non-conflict of interest, whistleblower, and gift acceptance policies.
“We engaged in discussions with our members and found that some just weren’t aware of what the regulations were and some felt they were in an awkward position to request financial information,” said Mark Charendoff, the president of the Jewish Funder Network. “If they don’t have to provide these kinds of statements to the IRS, then they felt they had no right as funders to demand that kind of financial transparency…. Now they can say, ‘We are part of this group. This is what we are demanding.’ We are not taking our case to the government, we are hoping our community can rise to a higher level of understanding and we can effectively police ourselves.”
Synagogues compose the vast majority of Jewish religious institutions, and as last summer’s money-laundering scandal shows, they can run into sticky situations when they act as conduits for money to other charitable organizations.
But the guidelines also could end up focusing attention on transparency issues that have surrounded a number of Jewish institutions in the United States and abroad, and could put pressure on a variety of institutions to be more forthcoming, including rabbinical schools such as the Conservative movement’s Jewish Theological Seminary, Chabad outposts, and overseas yeshivas.
“We are directing our energy toward any institution taking advantage of the religious exemption given by the IRS and not giving financials to investors and prospective investors,” Charendoff said.
This article was adapted from Jacob Berkman’s philanthropy blog, TheFundermentalist.com.