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The Building Blocks

A Summary & User-Guide for Adas Israel’s Budget & Finances
For transparency, knowledge, and collaboration

The Annual Operating BudgetThe Congregation’s Endowment | The Critical (but modest) Synagogue Reserves​​​​​​​


What is this?

Adas Israel is a vibrant collection of humans—seeking meaning, community, and connection, together. We care for the sick and the bereaved, we celebrate with the joyful, and we bear witness to each other’s journeys. Being of service in this way for our many thousands of people, of course, takes time, focus, energy, commitment . . . and yes, money. The following summary is designed to help you better understand and appreciate (even love?) the multifaceted, and truly sacred, financial anatomy of our incredible community. This is our story, in numbers. It is our sincerest hope that the financial picture we provide will serve as a usable and transparent resource for our many community members. 

 

Why now?

Beginning in February each year, the Budget Finance Committee, Board of Directors, Clergy, and Senior Staff begin the hard, diligent, and devoted work of preparing a Draft Operating Budget for the coming synagogue fiscal year (July 1 - June 30). The draft goes through months and months of preparation and refinement, and is ultimately proposed to the Congregation by our Board of Directors at the Annual Meeting each year in June. That meeting will be here before you know it. We hope this information will help prepare and empower our membership to collaborate and to make informed decisions at the annual finance discussions. 

 

There is no “profit margin” at Adas.

A large and transparent financial cabinet carefully assesses Congregational obligations and priorities each year, and forecasts the necessary revenue required to sustain them. We do not budget for profits, or greedy or wasteful spending and collecting. With our building, size, and history, it’s easy to assume (incorrectly) that “money grows on trees.” It is simply not true. We are a nonprofit like any other. In fact, as has always been the case, we barely break even each year in covering our yearly expenses. We choose to be of maximum service and impact, and put the mission first. Our budget exists to serve humans, not the other way around. We are very blessed to have many generous members, and to be the beneficiaries of a small number of founders and supporters who paved the way for all of us. But there is much work to be done each year to meet so many needs, while ensuring finances never be a barrier to full participation at Adas. 

 

Who makes these decisions? 

YOU. Financial matters are never determined by any one person alone. They are Congregational decisions, with oversight from a variety of stakeholders, including our Board of Directors, Budget & Finance Committees, Clergy, Executive Director, accounting staff, external auditing firm, and more. There is a robust and dedicated financial cabinet and process at Adas, and decisions are made with one key question in mind: is this what’s best for the humans at Adas, and the overall long-term financial health of the congregation?

 

Are finances a barrier at Adas? 

No. To help us fulfill our mission, serve our members, educate our children, and involve ourselves in the broader community, we appreciate and rely upon the financial commitment of our members. And, needless to say, we cannot operate our schools without key income lines such as tuition and fees. However, we are 100% committed to personal financial hardship never being a barrier to synagogue membership. We want you more than we want your money. All suggested contributions are just that—suggested. We will never turn anyone away from full participation due to finances. Now, it certainly requires the commitment of many to ensure our continued viability, and to sustain this value. So, while requests for financial assistance should never be taken lightly, a confidential conversation with our executive director about finances is always available to you, should you need it. 

 

The Three Fundamentals of Adas Israel’s Finances

 

1. The Annual Operating Budget (FY18/19 projected)*

money in, money out, each fiscal year

 

 

We are growing!

At odds with all national trends, the Congregation has grown by significant amounts over the last several years. With a low of 1,300 households six years ago, the Congregation is approaching 1,700 households today (net growth of nearly 400)! School enrollment has experienced similar growth. While this is beyond wonderful news (the very best in fact), and a meaningful endorsement of the direction and impact of our community these past several years, this does not mean “profit.” The net margin between revenue and expenses is still close to 0%. It costs real money to serve people, so all additional expenses are directly related to the additional revenue. Budget-wise, it’s just a bigger pie all around, not a more “profitable” one.

 

A Note About Security

As we’ve shared before, security is a top priority for us at Adas Israel. Needless to say, the tragic events at the Tree of Life Synagogue in Pittsburgh only reinforced our inclination to continuously seek outside, expert support when it comes to all security matters—and to take their advice seriously. Within a few hours of the events in Pittsburgh, per the advice of experts from Homeland Security and MPD, a significantly enhanced security infrastructure was put in place at Adas Israel. This includes the presence of magnetometers and additional security personnel, as well as other measures. With this enhancement, we saw a substantial, and unplanned, six-figure increase in our security expenses. Through the generosity of a handful of Adas members, and through this year’s impressively efficient and productive operating budget, we can comfortably project a balanced budget this fiscal year, even in the face of these increased expenses. However, that will clearly not be sufficient or sustainable for years going forward. We are committed to these new security features remaining in place until our advisors recommend differently. So, the Budget & Finance Committee and Board of Directors will continue to review effective, responsible, and sustainable ways of incorporating these new expenses into our ongoing operating budgets. 

2018 Security Budget

$325,000

2019 Projected Security Budget

$490,000

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2. The Congregation’s Endowment

long-term gifts for our future, and for right now!

The Endowment is a collection of literally hundreds of different principal contributions from Adas families and foundations over the years; all invested prudently according to the Congregation’s Board-approved Investment Policy Statement. Gifts are not spent, but rather, retained in perpetuity, and interest earned goes to support the synagogue budget and other key projects in meaningful ways. This is a beautiful mechanism of giving. The Congregation has grown increasingly dependent on yearly Endowment earnings as a critical revenue source for balancing our large operating budget (currently drawing roughly 5% of the Endowment market value, and supporting about 12% of the annual operating budget revenue).
 
Current value of the Endowment: $19 Million 
(This may seem like a lot, but consider this: we rely on the annual 5% draw from that amount each year to pay our bills, serve our members, and educate our students. And it has to last forever.)

 

 

3. The Critical (but modest) Synagogue Reserves

ensuring the Congregation has what it needs to deal with whatever inevitably comes

The Synagogue Reserves are currently reflected through two separate accounts: The Net Operating Reserve and The Building/Capital Fund. These two, relatively small funds, are designed to assist the Congregation with critical needs that often lie outside the capacity of a yearly operating budget, but are no less important in serving our community. Our external audit team has worked with our financial cabinet to recommend the structure, size, and goal of these funds. It may seem like some kind of a “Savings Account,” but they are both actively used each year to deal with the things you’d notice if we didn’t (i.e., moldy carpets, leaky roofs, broken equipment, flooding basements, unavoidable operating deficits, or other emergencies). The primary mechanism for funding The Building/Capital Fund is the 7-year “Building Fund Contribution” assessed to members each year, which you see on your account statement (No, that is not some greedy tax. As you can see, it is critical to maintaining your building.)

 

 

There’s More to Learn. Questions? Comments? Reach Out. 

Our Board of Directors and Finance Committees are committed to regular, transparent communication, so we can all maintain a healthy dialogue regarding our financial picture and future. Our Number 1 goal is to enable all the good and wonderful work of the Congregation to continue, and for you to be served in the way you deserve. Feel free to reach out to Finance@AdasIsrael.org to speak with any of us, to join one of these wonderful committees, or to offer your suggestions or insights for our future. This is up to all of us, and we can do this. Yasher koach for learning with us. And thank you for being a member of our remarkable community.

Sun, December 8 2019 10 Kislev 5780