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Chairman's Message
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Rabbi Tarphon used to say, "It is not up to you to complete the work, yet you are not free to desist from it."
Ethics of the Fathers, II:16
In prior AVI CHAI annual reports, I have explained our Trustees' decision to spend down the Foundation's assets. We believe that the many challenges facing the Jewish world today should be addressed by those philanthropies capable of providing significant support. The needs of the Jewish people in the distant future can be addressed by philanthropists fortunate enough to possess significant resources at that time. Our original thought was to spend down the bulk of the Foundation's capital by 2027, the year of the hundredth anniversary of Zalman C. Bernstein's z'l birth. However, given our conservative investment return expectations, that decision would have required us to curtail our current level of spending, and we believe the philanthropic needs in the fields we serve are so pressing that a reduction, of any magnitude, would have been counterproductive to AVI CHAI's goals and vision.
We have thus decided to complete the Foundation's work in 2020, fifteen years from now. We came to the fifteen-year decision with the aid and guidance of our Trustee Alan Feld, who used S.C. Bernstein & Co.'s proprietary Wealth Forecasting Analysis, which arrays 10,000 possible outcomes based upon market history. We built in our own conservative investment projections of 5% per annum, and arrived at the conclusion that there was a sufficiently high probability of operating at a payout level of $55,000,000 p.a., indexed for inflation, and still have sufficient capital remaining in 2020 to endow the activities of Beit AVI CHAI in Jerusalem.
The Foundation will cease making grants in 2020, even though its work will be far from completed, for, we believe, the challenges that confront the Jewish communities where we operate are perpetual. It is our desire that the work not end -- rather that it be continued by others, who perhaps will be animated by what we have started, and by the standards we have tried to set.
The Trustees took to heart the implications of our sunset provision and undertook the task of reviewing our current funding activities with the dual goals of determining if AVI CHAI was on the most effective philanthropic track whilst at the same time endeavoring to enhance the focus of our financial and human resources on what the staff and Trustees viewed as our highest and best philanthropic opportunities. The work was divided between two groups, along geographic lines - North America and Israel - as each group sought to define its programmatic activities for, at least, the next decade. The staff and the Trustees in both places devoted considerable time and effort to this analysis, during which we were assisted by two excellent outside facilitators.
The efforts in North America concluded with a decision that AVI CHAI would be most effective were it to remain concentrated, almost exclusively, in its funding of Jewish day schools and camps, with the possibility of considering an additional area, were we to find one where AVI CHAI might have some comparative advantage based upon the skill sets of the Trustees and staff.
In Israel, the process was somewhat slower. We have completed a thorough review of our activities enabling a far better overall comprehension of how AVI CHAI's resources are employed among the various clusters of grant programs. We have also developed a more clearly defined vision of what AVI CHAI seeks to accomplish and have been able to chart how the Foundation's funding adheres to that vision. The next task in Israel was to set our course of action for the next ten years. Part of that task has been accomplished with a renewed emphasis on formal (in school) as well as informal Jewish study, Pius (conciliation) activities, and a heightened support of media centering on Jewish culture.
When engaged in this process in both locations, the Trustees were mindful of the sagacious comment of our distinguished Trustee, Henry Taub, who implored us to concentrate our thinking and planning on the overarching challenge of leaving an enduring "legacy" based upon the excellence of AVI CHAI's philanthropic programs during its remaining fifteen years.
Undoubtedly, this is a difficult challenge to meet, as Henry's admonishment may complicate and, perhaps, even corrupt an orderly philanthropic process if an over-zealous emphasis is placed on "legacy" at the expense of defining today's needs in the fields we seek to serve and enhance. My friend and colleague, Professor Joel Fleishman, an acknowledged authority in the philanthropic world, highlighted this dilemma (between legacy and current efficacy) in his comments to me about the pitfalls associated with liquidating foundations. However, I am quite sure that AVI CHAI's staff and Trustees will strike a balance between the two without compromising either of these critical challenges.
In 2004, we initiated a shortened form of on-line reporting where we highlighted those programs and projects that were initiated that year. This 2005 Annual Report returns to the format of outlining and discussing all of the major activities in North America, Israel, and the F.S.U. We plan to alternate these formats to provide up to date information and yet concise reports for our readers.
2005 was a year in which AVI CHAI began in earnest to harness technology and the powerful force of the Internet, by developing Judaic content online that would be widely available. One effort, still in the development stage, is a Lexicon of Judaic subjects, at first, only in Hebrew, that the Foundation is creating, utilizing the expertise and talent of Israel's Center for Educational Technology (CET). We hope that the full 300-term Lexicon will be available on-line by the summer of 2008. However, access to the site will be encouraged once there is a critical mass of terms and subjects available. In addition, and again with the aid of CET, a rich, robust Internet site is being created to aid in the study, teaching, and understanding of Bible. It is called Mikranet (www.mikranet.org.il), and were it being developed in English, it would have been called Bible-net. It is a site with strong navigational tools that will enable teachers and students to more effectively study, understand, and comprehend biblical literature and biblical commentary.
The third Internet initiative launched in 2005 is called Hazmana L'Piyut (Invitation to Poetry - www.piyut.org.il), a web-site devoted to liturgy, poetry and song, featuring a wealth of text and music, explaining the sources and meaning of hundreds of prayers and poems that reflect the glory of Jewish tradition, principally that of the Sephardic heritage. The site has debuted to significant visitor traffic, with tens of thousands of viewer and listener hours. Lastly, a project that I accompanied during my 18 years at the Rothschild Foundation; the translation of the Encyclopedia Judaica into the Russian language, has, with AVI CHAI's support, recently been adapted for use on-line (www.eleven.org.il); providing the leverage of the Internet to reach a vastly wider audience throughout the world.
In 2004, we failed to get JSkyway, a distance-learning, Internet-based, in-service training initiative developed by Jewish Family & Life! (JFL), to be embraced by a sufficient number of teachers to justify our continued annual support. Not everything AVI CHAI does results in success, although a foundation must be willing to take risks in its philanthropy, especially now, with emerging technology. Our Trustees understand the unique opportunities that private philanthropy can make possible, but not every effort can bear fruit. We took a risk, the amounts committed were not excessive in relationship to AVI CHAI's capital, but after giving the initiative sufficient time to prove itself, we concluded our annual funding and provided a final grant to enable a transition to a new business model to be implemented by JFL. We remain partners with JFL in a number of other projects and highly value our relationship with them.
I commented last year on the Best Practices Audit conducted by Prof. Harvey Dale. He submitted his report, and recommended strongly that administrative, investment, and financial responsibilities be devolved from their concentration solely in the hands of the Chairman to be shared with other members of the Trustee group. We had started in that direction with an Investment Committee, but by the end of 2004 we had developed a plan, implemented in 2005, to create an Audit Committee as well as a Finance Committee that would be responsible for those critical functions, alongside the already existing Investment Committee. Harvey also recommended that a CFO other than the Chairman be appointed, so after nine successful years with the Foundation, Azriel Novick was given that title; truth be told, he has been fulfilling the role with distinction but without the title for many years. Prof. Dale's review was a worthwhile exercise for a private foundation, and should be considered by other foundations' trustees.
The construction of Beit AVI CHAI (BAC) has been "topped out." The stone-cladding process should be completed by the spring, and the expected move-in date is projected to be in late 2006. Prof. Avigdor Shinan has intensified his activities in coming to grips with the substance of the Jewish cultural programming being planned for BAC. He and his colleagues, working closely with the Israeli Trustees, and ultimately with a small Steering Committee, will develop programmatic activities that, ideally, will be of interest to a broad cross-section of the community in Jerusalem and beyond.
This year has witnessed the beginning of AVI CHAI's third decade, and its first in a new era of winding down towards its sunset in 2020. When we began operations in 1985, our benefactor Mr. Bernstein placed great emphasis on the concept of a "Trustee-driven foundation," one that would be distinguished by the proactive involvement of its Trustee group. We have never wavered from that conceptual paradigm, but I have come to realize that as AVI CHAI's philanthropy geometrically expanded during the past five years, how much our Trustees are dependent upon the Foundation's remarkable worldwide staff. You will gain an insight to the scope of the three directors' passion for their work when reading their own reports, which follow.
All our projects have Trustees assigned to them, and we all exercise a degree of oversight and involvement with them, but most of our Trustees have active professional and communal involvements in addition to AVI CHAI, and their time is therefore limited. So, although we may, to a great extent, be "Trustee driven," we are aided, guided and accompanied by a truly all-star staff that is committed to the Foundation's Mission, and who all add enormous value to the process of achieving AVI CHAI's goals. All of the Trustees, without exception, find it a personal and professional joy and privilege to labor in lockstep with the high caliber team that has joined us during the past ten years or so. For me it is simply an intellectual tour de force to be blessed with the good fortune to participate in their staff meetings and to work closely with them on a daily basis. "Trustee driven" or not, AVI CHAI would be a poor shadow of what it is today, were it not for the skill and dedication of those who have chosen to make AVI CHAI their professional home.
Arthur W.Fried, Chairman
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