As Jewish Agency contracts, its executive paychecks swell
Chairman Natan Sharansky earns more than the PM - and his chief fund-raiser makes even more.
On February 26, the Board of Governors of the Jewish Agency for Israel (JAFI ) will gather, as it does three times a year, at the Inbal Hotel in Jerusalem for three days of meetings.
On the agenda will be the strategic and budgetary plans for the upcoming years; euphemisms for another round of cutbacks and layoffs as the cash-strapped agency tries to balance its books in a period of declining donations. Behind the scenes, government ministries, large Jewish organizations and major donors are arguing over the justification of the agency's continued existence.
While the governors are contemplating the hole in the Jewish Agency's budget, they may be interested in the annual financial report for 2010 that the agency filed with the U.S. Internal Revenue Service (IRS ). Among the 40 pages they will find a list of its 22 highest earners. The most recognizable name on the list is, of course, that of Jewish Agency Chairman Natan Sharansky.
For decades, the unofficial arrangement was that the head of the Jewish Agency would make as much the prime minister of Israel, but Sharansky's pay in 2010 totaled $214,000 - 30 percent more than Benjamin Netanyahu, the man who appointed him and made $164,000 pre-tax in 2010.
This may not seem to some as an astronomic sum for the head of an international organization, but the Jewish Agency is a public Israeli organization, based in Jerusalem, Sharansky's home town.
But Sharansky is not the agency's highest earner, in fact in 2010 he was only number four on the list - that distinction goes to the CEO and president of Jewish Agency International Development (JAID ), the agency's chief fundraiser, Dr. Misha Galperin who is based in New York. JAFI paid Dr. Galperin $478,000 in 2010, according to the IRS report. This isn't his real salary though, as Galperin began working for the agency only in June 2010 - $478,000 was his pay for only seven months. Galperin's annual remuneration, including expenses and benefits, is nearly three-quarters of a million dollars.
A former practicing psychologist, Galperin was the CEO of the Jewish Federation of Washington, DC, and before that was the number two at the New York federation. His recruitment by the agency was heralded as a major coup, and was even presented as a budget-saving move as Galperin's new position was to consolidate the role of JAFI North America's CEO with the agency's director of financial resource development who was previously based at the headquarters in Jerusalem. But Galperin makes nearly twice what the previous CEO, Maxyne Finkelstein, earned. Jeff Kaye, the preceding director of financial resource development made barely a quarter of Galperin's price tag. (Kaye, who left the agency, received a year's pay in reparation ).
Sources close to the negotiations that took place in early 2010 over Galperin's pay package explained to Haaretz that Sharansky had agreed with Galperin that he would not lose out financially due to his move from Washington to JAFI's North American headquarters in New York. That hardly explains how he almost doubled the salary of about $400,000 he was due to make that year as head of the Washington federation. The base for Galperin's JAFI pay is half a million dollars, but to that were added the cost of renting an $11,000-a-month, 2,880-square foot townhouse in Brooklyn's upscale Cobble Hill neighborhood, tuition for his two children at the Hannah Senesh private day school, a car and his pension fund.
Galperin's supporters claim that his salary merely reflects the norm for CEOs of big U.S. Jewish organizations, but according to The Forward's annual salary survey of Jewish communal leaders, only one head of a national organization makes over $750,000 - the president of Yeshiva University, Richard Joel, who earned $848,000 in 2010. Next on the list is Rabbi Marvin Hier, founder and dean of the Simon Wiesenthal Center, who made $722,000.
Eight senior executives in Jewish organizations made over half a million dollars in 2010.
John Ruskay, CEO of the largest Jewish community in the world, New York, and Galperin's old boss, made $462,000. Even if Galperin deserves to be in the premier league of communal CEOs, say his critics within the agency, as an employee of an organization going through a severe financial crisis he should not top it.
The figure on Galperin's paycheck was not the only detail that astonished JAFI officials negotiating his new contract. He demanded and received a guaranteed five-year tenure, without connection to any performance level, with the stipulation that if his contract was terminated during his first two years at the agency he would receive compensation worth a full year's salary. If it will be terminated at a later stage, he will receive two years' salaries. In addition, if after five years, at the completion of his tenure, the agency decides not to renew his contract, he will receive a year's salary.
Galperin's personal benefits are not his only cost to the Jewish Agency. Shortly after he started work, JAFI set up Jewish Agency International Development (JAID ), with Galperin as its president and CEO. JAID, which was to become the agency's main fundraising channel, recruited dozens of new employees who work alongside the existing staff of JAFI North America; among them two new vice-presidents, Arthur Sandman and Nirit French, who make around $250,000 each.
"JAID is a monstrous and wasteful structure built by Galperin," says a veteran agency employee, "while all around the organization is cutting back and people are getting fired."
Galperin's package was initially authorized by previous JAFI Director-General Moshe Vigdor, but signed off by Vigdor's successor Alan Hoffman and the agency's Chief Financial Officer Yaron Neudorfer. Senior JAFI officials maintain that Hoffman was not pleased with the terms of Galperin's hiring, but that "it was Sharansky's decision. He made the agreement with Galperin and left the officials to negotiate the details."
"It seems like a desperate move by an agency that has lost faith in its own ability to attract Jewish philanthropists," says one JAFI operative, "but the truth is that even if Galperin was a fundraising superman, no one can change this organization's image sufficiently. Nothing we do will make us look as sexy as projects like Birthright-Taglit."
In recent years, large Jewish donors have prefered to put their money into smaller organizations and to fund initiatives through their private family foundations. More cynical staffers are convinced that Sharansky had another reason for hiring Galperin and allowing him to name his price: Many of the senior leaders of American Jewry were opposed to Prime Minister Benjamin Netanyahu's decision to appoint Sharansky as agency head, partly due to their fears that Sharansky was hostile to the Reform and Conservative movements. As the organization's premier funders, they could have blocked the appointment. Sharansky believes, or so the rumor in the agency goes, that Galperin played a key role in convincing the major donors that they could live with him. Whatever the truth, his financial agreement has been hidden until now.
Though he makes much less money than Galperin, the identity of the agency's second-highest earner in 2010 is even more breathtaking. Yonah Bezaleli's official job is the director of the JAFI Moriah Compound in southeast Jerusalem, but his real position of power is as head of the agency's workers union for over three decades until the end of 2011. Bezaleli, who also ran the agency employees' pension fund, has now finally retired, but in his penultimate year of employment he made no less than $331,000, which makes him easily the highest-paid union leader in Israel, with double the salary of Histadrut labor federation chairman Ofer Eini.
"He has been here for 54 years," says one employee, "but with all the benefits he has accrued, it's still impossible to understand how he reached such a salary."
The Jewish Agency claims that "his salary reflects seniority benefits accrued according to the benefits package customary to the agency at the time in which he was hired," but no longer. At the end of December 2011 Bezaleli retired. In a farewell letter to agency employees, he wrote that "the efficient running of the pension fund" under his leadership, "is an example of proper and efficient management."
The third-highest earner in 2010 was legal counsel Mark Ismailoff. Now back in private practice, Ismailoff's pay was supposed to be linked to that of a judge in Israel's Supreme Court, but at $231,000 was about 15 percent higher. Agency Director General Alan Hoffman's total pay in 2010 was $197,000, almost double that of a director general of a government ministry. Hoffman told Haaretz that comparing the salaries of senior agency staffers to government officials is no longer relevant. "For the agency to succeed, and to attract quality personnel who can operate in this environment, we have to hire by the standards of international organizations. As it is we pay less than similar organizations operating in Israel."
The giving end of gratitude
This level of pay, justified or not, continues while the Jewish Agency has been in long-term financial decline. Global recession and the preference of donors for small and fresh organizations have caused the agency's revenues to dwindle. In 2010, contributions and grants to JAFI were down 9 percent from the previous year, at $316 million. Figures for 2011 are not yet in, but they are reported to be even worse. The agency not only lost $32 million of its income in 2010 - the continuing depreciation of the dollar against the shekel has also mauled the finances of the organization that does most of its fundraising in North America, but pays the great majority of its salaries and operating costs in Israel.
In 2009, the operating budget was cut by $45 million, and in 2011, as part of a new strategic plan that included merging the agency's key departments, a further $20 million were cut. In the process, 180 employees were made redundant. Last June, the firings of a further 50 workers were prevented through a deal with the union which saw every employee giving up a day of paid vacation and forced to take unpaid leave in August.
Operations around the globe have been cut back and absorption centers for new immigrants in Israel have been closed down. One employee quoted from Psalms to describe the atmosphere in the organization: "A thousand shall fall at thy side, and ten thousand at thy right hand."
Misha Galperin is also literary-minded. He has a blog on the agency's website, titled Misha's Musings. In his latest post, from November, he displayed an incredible lack of self-irony when he wrote in the spirit of Thanksgiving: "I never forget that I am on the giving end of gratitude."
According to Jewish Agency Spokesman Haviv Rettig-Gur, "The salaries of the chairman of the executive, the deputy chairman and director general are set by a committee of lay donors who are senior members of the organization's Board of Governors. Those of other senior staff are set by a committee chaired by the director general."
"The agency rejects the accusation that the salaries of its senior staff are inflated," said Rettig-Gur. "Government salaries are not a frame of reference to measure salaries in major non-profit organizations - not in Israel and not anywhere else. The agency competes with the major Jewish international organizations in attracting top-level personnel, not with the government. It is important to note that no senior staff member of the Jewish Agency has received a pay increase since 2005. In 2010 the senior staff voluntarily took a 10 percent pay cut in light of the budgetary challenges facing the organization."
Rettig-Gur also related to Galperin's wage packet. "A committee of volunteer lay donors, headed by the chairman of the Board of Governors of the Jewish Agency, decided to offer Dr. Galperin a contract equivalent to the conditions of his employment as the CEO of the federation in Washington DC. The salary for 2010 includes relocation costs and other one-time expenses. Dr. Galperin's benefits package does not exceed those of CEOs of leading Jewish non-profits."