The Jewish Federation of Greater Phoenix laid off more than half its employees on Oct. 27.

"There comes a time when the economy's effect on the campaign reaches a point that it has a significant adverse effect on our resources," said Steve Gubin, chairman of the federation board, when asked what led to this decision. "As difficult as it may be, sometimes scaling down is what you have to do."

To date, the 2010 Annual Campaign for Jewish Needs is down more than $1 million from last year, Gubin said.

In addition to major donors who have been financially hurt by the recession, Gubin attributed a significant loss of donations to the death of some major donors over the past year and other donors being affected by investor fraud.

Eight federation positions were cut, according to Gubin. These include staff members who oversaw communications, the Women's Philanthropy department, Young Jewish Phoenix and the annual campaign.

Seven staff members remain, Gubin said.

In March 2009, the federation cut the equivalent of six full-time positions, a reduction of 30 percent of its staff, after its 2008 Campaign for Jewish Needs raised $1 million less than the previous year, according to a Jewish News article at that time.

So far, this year's campaign has raised $3.1 million in donations and pledges from individual donors, according to Adam Schwartz, federation president and CEO. The campaign ends Dec. 31.

"We're still in business," he said. "We still need the community support to provide for people who are counting on us."

Schwartz remains on the federation staff, although he announced recently that he will be leaving after his contract expires in July 2011.

The 2009 campaign raised $4.2 million, compared with $5.5 million raised in 2008. The 2007 campaign raised $6.5 million.

"If you're running a business and your sales are down $1 million, what do you do?" Gubin asked. "You have to step back and figure out how to handle it."

A task force chaired by Bob Silver, who is the incoming 2011-2012 federation board chairman, and made up of federation board members, has been formed to decide what happens next, including who will handle the responsibilities of the now-vacant staff positions, according to Gubin.

The task force has met several times, Gubin said, and federation board members met Nov. 1 for an update of where the federation is now and to start the conversation about what happens next, Silver said. Gubin and Silver planned to meet with past federation presidents, past recipients of the federation's Medal of Honor and other community leaders on Nov. 3; and Gubin, Silver and Schwartz were to meet on Nov. 4 with agency professionals and volunteers. The goal of these meetings is "to inform people what's going on and to look for input and help in going forward," Gubin said.

"Somehow, we want to see how to make lemonade out of lemons," Gubin said. "Sometimes, it takes a situation like this to put you in a position to make some hard decisions and figure out what to do."

According to Silver, the local federation has received assistance from The Jewish Federations of North America, the umbrella group for federations. He said JFNA has helped with marketing and PR support, as well as with the campaign and financial issues. "We're not the first community to be going through this," he said.

The federation will continue the process of having community councils decide how to allocate funds gathered in the annual Campaign for Jewish Needs, said Silver, who is chairing the Community Think Tank that heads the councils. "There is a very strong belief that what we're doing with the councils and the direction that we're heading is crucial to our future." The three councils- focused on social services, Israel and education- will hold a training session for the 10-12 volunteers on each council on Nov. 8.

"Federation is still a necessary organization within this community," Gubin said. "This is the time, more than ever, that we need the volunteers to step up to the plate."

Silver agreed: "The volunteers are the strength of this organization."

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