Monday, December 29, 2008

Not Intended to be Spreading Any Rumors...

Both on Shabbos and yesterday a "newsflash" was making the rounds that a well-known yeshiva in Brooklyn under Sefardi auspices was at the point of being closed down. Apparently teachers have not been paid for some time and there is no money to continue running the school. I am purposely not naming the school because I cannot verify all the information. I am bringing this up not to fan a rumor, but to point out that what the blogs have been saying for some time just may be starting to happen.

Schools who depend on donating "angels" are ill prepared to face a life without those angels. Financial policies in a lot of schools are contrary to accepted business practices. No matter how you may want to think otherwise, a private school--what a yeshiva is--is a business operation. Unless and until the financial portion of a yeshiva is put under the control of someone other than the head of the school, and is handled objectively by those with the financial knowledge and skills required, then not only rumors of closings but actual closings are sure to come about.

A few years ago such a rumor would never have seen the light of day. Yeshivas always seemed to find someone with deep pockets to bail them out when needed. Well folks, those deep pockets aren't so deep any more. Maybe something good will come out of this economic hole we're in. Maybe yeshivas will finally be forced to do what they don't seem willing to do voluntarily. I know of the yeshiva that is rumored to be closing. They had/have an excellent reputation. Their teacher salaries were always on the higher end. They paid on time. They provided all types of services to their students. They had money backing them up the wazoo. If financial woes can attack this school, well you guess about the others.

4 comments:

SuperRaizy said...

I'm familiar with the yeshiva that you are referring to. From what I hear, it's true that they are having problems. They really overextended themselves recently with a big construction project. But I would be very surprised if they closed down. I think that the community that supports them would step up and provide the cash that they need to keep going.

Tuvi said...

I wouldn't be so sure about that Raizy. A lot of the people in that community are in retail and in manufacturing for the retail stores. They're hurting pretty badly right now. Big money donations in the sefardi community are also down now.

SephardiLady said...

I echo the thoughts of Tuvi. The Syrian community is very generous, but I have no doubt they are feeling the pinch, perhaps even more acutely. Retail is really suffering and stores are just trying to break even. Most stores didn't even bother to order the amounts of inventory they usually did and they can't seem to clear what they have out. I don't need to pick up the business section to know that the news isn't good, because Macy's and JC Penny's are issuing coupons like their drunk.

Of course, a large amount of merchandise that we find on the shelves is owned by the same families most likely to cut a check to the Yeshiva unable to make ends meet. And I have no doubt the Chassidish community will be hit hard as new construction and remodeling is scaled back. Pick up a remodeling magazine geared towards those with money to play with and look at the addresses of the wholesalers of many a fancy tiles and fixtures.

Anonymous said...

The Syrian community is very generous, but I have no doubt they are feeling the pinch, perhaps even more acutely. Retail is really suffering and stores are just trying to break even. Most stores didn't even bother to order the amounts of inventory they usually did and they can't seem to clear what they have out. I don't need to pick up the business section to know that the news isn't good, because Macy's and JC Penny's are issuing coupons like their drunk.

I heard something very interesting on CNBC this morning. They said that the retailers discounted the goods much more than usual this season and that the suppliers of those goods "are going to demand that the retailers share some of that discount". That implies that the suppliers supply goods on a form of "consignment" and don't know exactly how much they will be paid for those goods until the discounting cycle has completed. That's even worse for the suppliers!

The good thing is that a community that has been wealthy for a while (like 2 generations+ in this case) has saved so much over the years that it won't be that difficult to keep the school running until business improves. The places to really worry about are the smaller, newer, schools that have no wealthy community around them, and have very few alumni, none of which are old enough to have the big wealth and the low expenses that enable large donations. Those kinds of schools will be the first to fail.

Mark