At the Jewish Agency, we are sensitive to the

difficulties you and the entire federation system

must grapple with as the global economic

downturn continues. We are your partners in facing this storm as we carefully weigh every dollar spent to ensure maximum benefit to the

people supported by campaign dollars. Now, as

always, our beneficiaries are our most important

priority. Every year, some 2 million people around the world depend on the services of the Jewish Agency because of your partnership. Youth and communities at risk in Israel—at risk

from neglect, disadvantage or kassams—depend

on our help. Vulnerable new immigrants look to us

as they struggle to build new lives. So do young

immigrant soldiers and students alone in Israel

who count on us as family. Throughout the former

Soviet Union, young people and communities at

risk of being severed from their Jewish identity

reach out trusting we’ll be there for them.

That is why we are constantly looking for

greater efficiencies, considering carefully and

responsibly every single dollar spent on any

activity not directly helping our beneficiaries.

But today, and increasingly over the past two years, many are now in jeopardy.

Presentation of the Champion of Children Award

Update on impact of economic crisis on our beneficiaries

April 2010

Find out more about how you can make an impact:

v 212 339.6048 e ask@jafi.org jewishagency.org

As the world’s largest Jewish nonprofit, the Jewish Agency is the leader in partnering world Jewry with the people and State of Israel. The Jewish Agency is funded by The Jewish Federations of North America, Keren Hayesod, major Jewish communities and federations, the International Fellowship of Christians and Jews, foundations and donors from Israel and around the world.

Partnering with purpose, all over the world.

$25.4 million in further budget cuts

Program Cuts

STRENGTHENING ISRAEL through immigration and absorption -10.4

CONNECTING NEXT GENERATION with Israel and peoplehood -2.3

PARTNERING WITH ISRAELIS to effect transformative change -4.2

Overhead and other expenses -$8.5

2010 Budget Changes in U.S. $/ in millions

Immigration and absorption$10.4 million cut in 2010 / 29.2% since 2008

• Five Absorption Centers that provided a soft landing to vulnerable new immigrants were closed between 2005 and 2009, which means 2,700 fewer olim can be served. Additionally, many new immigrants will no longer receive the same level of support to ease their difficult transition because of the $4.64 million budget cut for Absorption Centers in 2010.

• Programs that care for young immigrants served 450 fewer olim in 2009 than in 2005, and many young immigrants are not receiving the assistance they need to attend institutions of higher education because of the $1.3 million in budget cuts for Student Authority Scholarships since 2005.

• The number of shlichim (Israel emissaries) was cut in half between 2005 and 2009. The opportunities to engage new target audiences are reduced, and potential olim receive less support as they prepare to move to Israel.

• Many people who wish to build a new life in Israel will not receive the information they need to make aliyah because Aliyah Promotion Activities have been cut by nearly 40 percent since 2005.

for example

Effecting social change in Israel$4.2 million cut in 2010 / 13.4% since 2008

for example

Connecting the next generation

for example

2010 Budget Changes

Administrative Cuts

$13.2 million in administrative budget cuts in 2009, $18.9 cut since 2006

We continue to make major reductions in personnel and as you can see from the facing charts, administrative cuts have been just as deep.

We are now implementing changes to our organizational structure to not only reduce costs further but to increase efficiencies by centralizing key functions.

While we continue to make every effort to minimize the negative fallout on our beneficiaries, unfortunately, we have also had to make major reductions in essential programs in order to be able to responsibly manage these financial realities.

Background

Impact on Jewish Agency beneficiaries

In order to maintain budgetary balance, we have further reduced our operating budget by $25.4 million in 2010 – in addition to the $74.3 million already slashed in 2009 – for a cumulative reduction of $99.7 million in expenditures since 2008.

• In the FSU, we are now reaching some 6,700 fewer children and youth through summer and winter camps than in 2007, and an additional $1.5 million was cut for camps in the FSU and the rest of the world in 2010.

• In 2009, 10,300 less people in the FSU were able to study Hebrew and connect to their Jewish heritage through identity-building ulpans than in 2008, and participation will decrease further as a result of the budget reduction in 2010.

• In the FSU, we are now active in 54 fewer towns and cities than in 2006 and have 11 fewer educational shlichim than five years ago.

• In France, the number of youth involved in Zionist youth movements has fallen by more than 2,000, while in Latin America, the youth movement summer and winter camps are in danger, depriving 4,000 youth of the educational opportunity that the camps provide.

• In Latin America, the annual training program for 400-600 educators in formal educational frameworks has been cut from two to one seminar, while the training program for 200 informal educators has been cut completely.

$2.3 million cut in 2010 / 19.1% since 2008

• Youth Futures, our flagship program that helps children and youth at risk from Israel’s geographic and social periphery realize their potential, is reaching 4,000 fewer children and youth than planned because the budget does not exist to expand the program.

• Additional programs like Atidim, Net@ and Sparks of Science are reaching far fewer youth at risk in Israel’s periphery due to the $1.5 million budget cut for educational advancement programs in 2010.

• Our residential Youth Aliyah villages for children at risk cannot increase their capacity beyond the current level of some 1,000, and for those children already in the villages, budget cuts have reduced our ability to provide the high level of care, professional support and enrichment programs that existed in the past. An additional $756,000 has been cut from the Youth Aliyah budget for 2010.

• We have been forced to close a number of partnerships in Partnership 2000 and reduce the scope of activities in others, and an additional $1.92 million has been cut from the Partnership 2000 budget in 2010.

In the 2009 budget, facing an unprecedented global economic crisis, the Jewish Agency slashed expenditures by $74.3 million dollars. In the 2010 budget, we have cut another $25 million from our operating budget. From 2008 to 2010, Jewish Agency income declined by 20 percent. This was exacerbated by a fall in the value of the dollar against the shekel and the currencies of the FSU – key areas of our activities.

Our core income not only funds many of our activities, it also provides the infrastructure that allows us to implement projects funded by donor-directed income and enables us to leverage additional funds.

These cuts translate into fewer people whom we can help and lower levels of support, while also limiting our ability to react speedily in case of emergencies. Given the ongoing economic uncertainty and volatility, we continue to work hard to identify and implement solutions to exact the greatest possible impact from every single dollar spent in an effort to not cut programs any further. The approved 2010 budget assumes that an additional $58 million in restricted support by funders will ensure that we can meet the challenges and critical needs of the individuals and communities worldwide that rely on us.

Employee Reduction

17.3% reduction in permanent staff since 2007