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MARBLEHEAD

Jewish center cuts back

A $500,000 loan helps keep it afloat

By Steven Rosenberg
Globe Staff / April 5, 2009
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On the eve of the festival of Passover, the largest Jewish institution in northeastern Massachusetts has run out of cash and is being forced to borrow $500,000 to keep its doors open.

Hard hit by the economic turndown and an exodus of hundreds of members to the new Marblehead YMCA, the Jewish Community Center of the North Shore is putting up some of its 90-acre Middleton property, Camp Simchah, as collateral to help obtain the loan.

"Things are challenging," said Perry Frankston, who resigned last week as JCC executive director but has agreed to stay on until the financial crisis eases. Since January, the JCC - which has an annual budget of $4.9 million and 160 employees - has lost 18 percent of its membership, down to 1,550 individuals and families. While the JCC had prepared for 15 percent of its members to switch to the Y, Frankston said the additional 3 percent who left could no longer afford membership.

Meanwhile, the JCC is taking other actions to keep its deficit from deepening. Employees have taken pay cuts of up to 7.5 percent, and Frankston said the center plans to cut its budget by as much as 15 percent next year.

Frankston said the nonprofit would continue to focus on three areas.

"We're going back to basics, with childcare, camping, and fitness. Those are the three legs of the JCC stool and that's what we're really focusing on," he said.

But some members of the Jewish community wonder if the facility should continue to focus on those areas, since they are three primary services offered by the nearby YMCA. In December, the Y opened a $24 million, 90,000-square-foot building just a mile away. Two months after it opened, the new Y had tripled its membership to more than 10,000 people, attracting hundreds of former JCC members.

"The old model of gym, preschool, and camp is not working. It's not bringing in the dollars," said Liz Donnenfeld, who heads the Jewish Federation of the North Shore, the largest Jewish charity in northern Massachusetts. "We have to find new ways to bring new revenue streams to the JCC."

But because of the faltering economy and a lag in fund-raising, Donnenfeld can offer little more than encouragement and a volunteer task force to help the center create a strategic plan. Last year, the federation gave $180,000 in subsidies to the JCC, but Donnenfeld said the charity is not in a financial position to grant midyear emergency funds. Last year, the federation raised $1.61 million, down 11 percent from 2007.

In the late 1970s the JCC faced a similar financial crisis. At that time philanthropist Robert Lappin and others rallied to help raise $1.3 million from area Jews to help pay off the JCC's mortgage.

Lappin, who has given more than $30 million over the years to Jewish causes on the North Shore, said he believes a similar fund-raising effort now would not succeed.

"I think the institution does not have the broad base of affluent supporters who are capable of raising the money," he said.

Without deep-pocketed donors, JCC and federation officials are reviewing area Jewish institutions to see if there's a way to pool their resources.

Dr. Stephen Hamelburg, president of the JCC, said part of any new plan would include a review of how the Marblehead building is being used. Some community members also have suggested selling the Middleton campgrounds and merging the camp with another Jewish day camp in Essex. Another idea that's been floated is to move the offices of the federation, Jewish Family Service, and the Jewish Journal into the JCC. Those three organizations pay a total of $125,000 a year for rent in Salem.

Frankston said the $500,000 loan would allow the JCC to remain open until the end of the year and give the center's volunteer board time to come up with a new financial plan.

Rich Kessel, who first attended the center as a child more than 50 years ago at its Lynn location, said he believes the JCC will survive but will have to make major changes.

"It will evolve," he said.

Steven Rosenberg can be reached at srosenberg@globe.com.