NEW YORK — In meetings beginning this week, the Jewish Agency for Israel's board of governors will grapple with its most severe fiscal crisis to date.
Heated debate is certain as the board is called upon to slash coveted social service and educational programs by $110 million during the next two years.
These cuts mark the first phase of a dramatic, five-year austerity and reform plan. The measures were prompted by yawning deficits caused in part by flat fund-raising campaigns overseas.
The Agency is the primary recipient of United Jewish Appeal funds raised by local federations and targeted for overseas spending.
Even with the projected cuts, the Agency's accumulated deficit is expected to top $100 million by the end of 1997.
The services most vulnerable to cuts by the board, which meets through next week in Jerusalem, are long-term immigrant absorption programs and residential education for underprivileged Israelis in the Youth Aliyah program.
Agency leaders, meanwhile, have been trying to convince Israeli government officials to take over these and other responsibilities. But such agreements were not expected by the time the board convenes.
To date, the government has told Agency leaders that it would be difficult to assume new Agency responsibilities in the short term.
But Jewish Agency chairman Avraham Burg called that a "bargaining position."
For now, the Agency plans to retain responsibility for the aliyah and absorption of an expected 80,000 immigrants to Israel this year. Aliyah and absorption have been among the Agency's primary responsibilities.
And even though it will probably slash its Youth Aliyah programs for Israeli youngsters, the Agency will continue to fund Youth Aliyah and Jewish-Zionist education programs for immigrants.
The cuts and the transfer of some responsibilities to the Israeli government form the centerpiece of a plan unveiled last month by Jewish Agency leaders to balance the Jewish Agency budget by the year 2000.
The Agency, which operates with an annual budget of roughly $500 million, is calling for $500 million in reductions over the next five years.
"We are facing monumental debt" and the need for "massive, massive cuts," said Shoshana Cardin, president of the United Israel Appeal, which funnels money from the United Jewish Appeal to the Jewish Agency.
Burg, for his part, has called this the Agency's "moment of truth" and an "operation without an anesthetic."
Indeed, emotions ran so deep when the plan was unveiled that some members of the executive broke down in tears, Burg said.
The decisions made by Agency leaders at its meetings this month could begin to alter the face of the Jewish Agency.
A critical part of the new fiscal program is a plan to provide the Jewish Agency with an additional $230 million over the next five years through diaspora fund-raising campaigns.
But the call for increased campaign donations is likely to meet resistance from those who raise the money.
Federation campaigns are already strained by increased demands at home. Overseas allocations have shrunk from more than 50 percent of the organization's budget in past years to a little more than 40 percent today.
The Jewish Agency's board will be asked at the outset of its meetings to approve the plan for cuts and campaign increases, Burg said during a visit to New York this week.
In the past, Burg has been rebuffed after calling for guaranteed campaign funding to the Jewish Agency.
Although he now acknowledges such approval is only "emotionally binding," he said it is an essential component of the plan.
"I don't want to create the pain [of the cuts] without creating hope," he said. "I don't want to create a situation where the call of the prime minister is not responded to by the board of governors."
Burg was referring to remarks made recently by Prime Minister Yitzhak Rabin, who criticized diaspora Jews for not contributing enough to the Israel-diaspora partnership through the Jewish Agency.
Of the UJA-federations' annual $720 million campaign — minus 5 percent in uncollected pledges — about $200 million, or two-thirds of its overseas allocation, goes to the Jewish Agency.
"It's gornisht," Burg said in a recent satellite broadcast to diaspora fund-raisers about the fiscal crisis, using the Yiddish word for "nothing." He added, "It's not fair."
For Charles "Corky" Goodman, chairman of the Agency's board of governors, the budget crisis jeopardizes the Jewish Agency itself, and with it the partnership between Israel and the diaspora.
The Agency "is our contact with the Israeli people, the Israeli government, and in order for it to remain relevant, it has to be fiscally sound," Goodman said in the satellite broadcast with Burg.
"Even the prime minister is questioning our relevance," he said. "We have to perform."
But Goodman is wary of coming down too hard on the fund-raisers.
"I don't believe it's my place to tell them what to do," he said in a phone interview this week. "They are trying their best to fulfill their commitments."
Meanwhile, Cardin expects some conflict at the board meetings between what the Israelis will demand of the fund-raisers and what the fund-raisers will agree to deliver.
But she described such conflict as business as usual.
"I don't think there's sufficient understanding by the Israelis of the concept or ideology of the voluntary [federation] campaign," she said.
Also, "federations are autonomous," she said, adding that they are overwhelmed by federal cuts and consequent threats to the social "safety net" at home.
"This is no time for anyone to say `Thou shalt,'" she said. "It won't work."