| Dear Beth El Family,
Earlier this summer, you received my Annual Letter to the congregation in which I referred to Beth El’s ongoing and upcoming financial challenges, which have been exacerbated by the current health crisis. Despite these challenges, I also announced that we are freezing membership dues. Our Audit and Finance Committee worked tirelessly to prepare a balanced budget that the Board of Trustees approved. I want to provide you with information about that budget so that our financial situation is transparent and understood by everyone, as meeting our financial challenges continues to be our collective responsibility.
First, I want to thank our Treasurer, Barbara Cohen, our Comptroller, Olivier Vogel, the members of our Financial Task Force, the members of our Audit and Finance (A&F) Committee, and our professional staff for their hard work these past few months. And, as you will read, their efforts have been productive. Given the great uncertainty that remains on so many fronts, we elected to create a worst-case scenario budget for the coming year. Of course, we do not know for sure that this is truly the worst case, but we have been very conservative and are therefore optimistic that our actual results will be no worse, and hopefully better, than budgeted. Our Board will be reviewing the budget at least quarterly and, as necessary, making adjustments recommended by the Treasurer and A&F Committee. Our Treasurer and A&F committee will be scrutinizing it on an even more frequent basis.
Perhaps the greatest budgetary challenge we face is a significant loss of Camp revenue. Our Day Camp generally contributes a net profit of more than $600,000 to our bottom line. But this year, due to the pandemic, we are not holding traditional Camp as usual, and we are anticipating that our “Camp Reimagined” program, intended as a service to our members and camp families, will break even at best. In addition, we do not expect revenue from the purchase of extra seats for the High Holidays, which generally adds an additional $100,000 in revenue. Taking these and all other factors into account, our initial projection was a worst-case shortfall of between $1 Million and $1.5 Million dollars.
Our A&F Committee and professional staff have reduced costs by slashing expenses wherever possible in the proposed budget, including programming, marketing and communications, administration expenses, and so forth. We have reduced employee compensation by 5% by eliminating pension plan contributions for 2020-21. Rabbi Schuck and Rabbi Sitkin both have contracts but they have voluntarily reduced their compensation by 5% as well to help us balance the budget and to show solidarity with their colleagues on the staff.
All of this would still leave us with a significant shortfall. Fortunately, we succeeded in obtaining a Paycheck Protection Program (PPP) loan from the Small Business Association (SBA) in the amount of $482,000. Our expectation is that we will qualify for forgiveness of this loan and will be able to apply the full amount to reducing our deficit. In addition, we were fortunate these last two years that the combination of conservative budgeting, tight monitoring of expenses, and several unique financial situations (including savings this spring when the building was closed) generated budgetary surpluses totaling $373,000 that we are rolling forward to help balance the budget. All told, even with these one-time benefits, we are still left with a shortfall of approximately $100,000. We will assess the situation after the holidays and, if necessary, we will be required to make more drastic decisions and likely need to close this deficit with further payroll cuts. It is also important to note that the PPP and prior-year surpluses are one-off savings, and we are still facing a serious annual budgetary deficit in the years ahead if the downward trend continues.
To address the current financial challenges posed by the pandemic, we felt it was vital to examine our fundraising efforts. These are unprecedented, challenging times that require a more expansive approach to raising funds critical to meeting our operating budget. Under the leadership of Sam Berger and Hila Reichman, we formed a Fundraising Task Force to determine the way forward. This Task Force has been working diligently over the past two months to design a fundraising plan that will enhance our culture of giving. It has always been important for us to come together to support Beth El and now, more than ever, we need your participation. With thanks to the Fundraising Task Force, Beth El will launch a new fundraising initiative later this summer that will be an expansion of our Kol Nidre Appeal. If you have supported this appeal in the past, we hope that we can rely on your continued generosity, and, if possible, your increased generosity this year. If you have not participated before, this is the time to make a contribution. This year, let us face these challenging times by demonstrating our unwavering support. Together, we can raise the funds necessary to assure that Beth El can continue to play a central role in our lives.
May the remainder of this unusual summer be a healthy and pleasant one for us all.
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