Hadassah, the international women’s Zionist organization, is entering its centennial year amid signs of increasing dysfunction.
On February 7, the group confirmed that it is investigating allegations that two leading members of the governing board’s executive committee misused charitable funds.
The allegations were made in a January 12 letter to Hadassah board members from Larry Blum, Hadassah’s chief operating officer and most senior staff member. Blum himself was placed on administrative leave last November over separate allegations that he had misused his corporate credit card.
The brewing scandal comes as relations deteriorate between the organization’s shrinking staff and its powerful membership, and amid claims by former employees that the volunteers have little regard for the professional staff. Blum’s charges raise additional questions about the volunteer leaders’ guidance of the billion-dollar charity.
In his letter, Blum accused Hadassah’s national president, Marcie Natan, and its immediate past national president, Nancy Falchuk, of misusing Hadassah funds. Both hold volunteer but elected positions.
Calling himself a “whistleblower,” Blum charged that Falchuk had run up personal expenses on a Hadassah credit card. He also alleged that she had moved items worth between $10,000 and $20,000 to her own home from a Hadassah-owned apartment.
Blum alleged that Natan had used Hadassah funds to buy favors for members who supported her candidacy for national president.
Through a Hadassah representative, both Natan and Falchuk declined to comment on the charges. Blum also declined to comment to the Forward.
A standing committee of Hadassah board members tasked with following up on whistleblower allegations is investigating Blum’s charges. The committee has secured attorney Daniel Kurtz, leader of Skadden, Arps’s exempt organizations practice, as outside counsel for the investigations. Kurtz is a former head of the New York State Attorney General’s Charities Bureau.
In a statement emailed to the Forward, Hadassah said that the investigations of Blum’s allegations and of Blum’s alleged misuse of his corporate credit card were “ongoing.”
“No conclusions have been reached,” the statement read. “Until there is a final resolution, Mr. Blum is on administrative leave.”
People with knowledge of the situation say that Blum showed up uninvited at a Hadassah board meeting at a South Florida hotel in January, slipping copies of his letter, with its allegations against Falchuk and Natan, under the doors of board members’ hotel rooms.
Founded in 1912, Hadassah today claims more than 300,000 members. The group held more than $1 billion in net assets as of December 2009, according to a consolidated balance sheet reflecting Hadassah and its related entities that was submitted to state authorities in 2010.
That number includes a portion of the assets held by Hadassah Medical Organization, which operates large hospitals in Israel and over which the American organization has only limited oversight.
Despite its huge size, Hadassah has a highly unusual management structure. Top volunteer board members are given desks at Hadassah’s offices in Manhattan and are expected to work there four days a week. Each major staff position within the organization has an associated volunteer tasked with the same portfolio.