The Impact of the Economic Recession on the Nonprofit Sector : A Crisis?

The weakening US economy, beset by troubled financial institutions, high gas prices, and increasing unemployment, is also hurting Jewish charitable institutions, both here and in Israel. 

According to SOVA, a network of kosher food pantries serving the Jewish and non-Jewish poor, the number of people served by SOVA increased from 2500 in June of 2002 to 8000 in July of this year.  In California, the situation is more difficult for many Jewish charities, many of whom are in charge of programs paid for by state and local government to help the poor and needy. After going 72 days without a state budget, the final budget cut state assistance to the elderly and cut relief to the poor, putting more burden on private charities who must deal with impacts of the cuts as well as the wider economic crisis. While the budget was delayed, non-profits experienced delays in receiving the grants they receive from local government to fund services for the poor and childcare, and were unsure of how much in cuts they could expect.

 

The weakening of the US dollar has hurt the export sector of the Israeli economy by making Israeli products and the cost of labor more expensive to American consumers and businesses. It has hurt the export sectors of the Israeli economy, as well as contribution from Americans. IDT, a company that handles technical support calls for companies, has been forced to lay off hundreds of workers, as the cost of hiring an Israeli worker has gone up as the dollar has become weaker. This has hit immigrants from English speaking countries like the United States, the United Kingdom, and Australia particularly hard because for many immigrants IDT was the best paying job they could get with limited Hebrew skills.

 

In another example, because of the increased value of a shekel, the cost of hiring an Israeli software engineer is high, and the industry will lose 4500 jobs this year. Additionally, the weak dollar has also hurt Israeli NGOs (nongovernmental organizations). The Jewish Agency has been forced to make faces a multimillion dollar shortage as a result of declining dollar, forcing cuts to Israel programming and social projects the Agency does in Israel. With the consequences of the financial meltdown in the US spreading to Europe and Asia, the question is whether the previously booming Israeli economy will relapse and enter a recession. 

At USC, Chabad has seen a surge in turnout, necessitating more resources to feed the hungry (spiritually and physically) Jewish students. But as Rabbi Dov says, "we feel there is something important to do, we do it, and the we go out and break our heads to fund it. It was always our motto and continues to be. We make sure there is Jewish service available regardless." 

 

With regards to food pantries such as SOVA and other groups that provide social relief, students can make a difference by volunteering, conducting food drives, and even making donations (food or otherwise related). It is also important to become educated about hunger and economic hardships, keeping in mind how these issues affect people.  Students need to understand how such issues pertain to political legislation and economic change. Most of all, to become thinking voters and active members of the community is a positive step in combating the negative consequences of an economic recession.