Hadassah

CharityWatch's rating of Hadassah includes the financial activities of the entities included in the Hadassah, The Women's Zionist Organization of America, Inc. and Related Entities audited consolidated financial statements for the year ended December 31, 2021. All material intercompany transactions have been eliminated in the audit consolidation.

Along with Hadassah, The Women's Zionist Organization of America (HWZOA), the entities included in its 2021 consolidated audit are: (1) Hadassah Medical Relief Association, Inc. (HMRA); (2) Hadassah International, Ltd. (a Bermuda Corporation) (HIL); (3) The Hadassah Foundation, Inc.; (4) The Hadassah Office in Israel; (5) Fabulous Finds LLC (an inactive for-profit entity); (6) Hadassah Medical Organization (HMO); (7) Hadassah International Israel; (8) Hadassah Stiftung Deutschland (Hadassah Foundation Germany); (9) Hadassah Mexico, A.C.; and (10) Hadassah Switzerland.

CharityWatch's rating of Hadassah does not include the financial activities of the Hadassah chapters or the international affiliates (autonomous geographical units) other than the entities cited above, as they are not included in Hadassah's audited consolidated financial statements. 

According to the Hadassah consolidated audit of December 31, 2021 (Note 1, Organization):

"In Israel, in addition to supporting activities at HMO, HWZOA and HMRA support a variety of projects conducted by unconsolidated entities. Hadassah Academic College provides academic degree programs. Hadassah-supported Youth Aliyah villages provide housing, education, and support to disadvantaged Israeli and immigrant youth. Young Judaea sponsors camps, clubs, activities, and Israel programs to connect young people with Israel and the Jewish community. Together with the Jewish National Fund, HWZOA and HMRA build parks and reservoirs, make parks disabled-accessible, and support reforestation projects.

"In the United States, HWZOA members are engaged in a variety of educational, advocacy, and community service initiatives. ... HMRA is a not-for-profit corporation incorporated in the state of New York on June 10, 1925 whose mission is identical to HWZOA...

"HIL is a Bermuda exempted company limited by guaranty incorporated in August 1995, which coordinates Hadassah's international units whose purposes are to raise funds for HMO and develop exchange programs between HMO and medical institutions around the world...

"Hadassah Foundation, founded in 1998, is a supporting organization of HWZOA...

"Hadassah Offices in Israel Ltd. (PBC) ('HOI') is registered in Israel as a Public Benefit Company... HOI's primary objectives are to act on behalf of and in the interests of HWZOA..."

[...]

"HMO, is registered and located in Israel, [and] is a provider of medical care, rehabilitation, and medical research[.] HMO is engaged primarily in providing medical services at two medical centers in Jerusalem – Ein Kerem and Mount Scopus. ... [As] a public benefit company [HMO] operates only for public purposes, its income and property are applied solely toward the objects of the public benefit company, and it is prohibited from making the distribution of profits or any other distribution to its members... HMO owns and controls four wholly owned subsidiaries: Hadasit Medical Research and Development Company, Ltd, S.R.Y (Medical Services) Ltd., Hadassah Medical Ltd., and the Research Fund of the Hadassah Medical Organization Amuta (R.A.).

"Hadassah International Israel Ltd. (PBC) ('HII') is registered in Israel as a Public Benefit Company. ... HII's primary objectives are to raise donations in Israel for HWZOA's operations in Israel and for HMO and to assist in the promotion and development of healthcare services in Israel.

"Hadassah Stiftung Deutschland...is a nonprofit organization founded by HMRA in 2016 under German law whose purpose is to raise funds and direct these funds to promote science and research, medical, and public health care, as well as professional training by a tax-privileged or a public corporation...

"Hadassah Mexico, A.C. is a nonprofit association founded in 1999 in Mexico. ... The purpose of Hadassah Mexico, A.C. is similar to the purpose of HIL regarding HMO and includes promotional activities and the development of programs, lectures, etc. in Mexico and pursuant to Mexican law.

"Hadassah Switzerland ('HS') is a nonprofit organization in Switzerland founded in 2002 with a mission to financially support HMO... There were no significant assets, liabilities, or activities during 2020 or 2021."

According to the Hadassah consolidated audit of December 31, 2021 (Note 15, Recovery Agreement):

"In February 2014, and as a result of financial difficulties caused by continuing operational and cash deficits, HMO [Hadassah Medical Organization] submitted a request to the District Court in Jerusalem (the Court) for a Stay of Proceedings status.

"On February 11, 2014, the Court approved the Stay of Proceedings status...for a 90 day period and required the trustees and management to conduct intense discussions with the Unions, Government and Hadassah in order to reach a recovery plan.

"On May 22, 2014, the Court approved a recovery plan (the Recovery Agreement) for the period of seven years beginning January 1, 2014 through December 31, 2020 and canceled the Stay of Proceedings status. On June 24, 2014, and pursuant to the terms of the recovery plan, the Recovery Agreement was signed by HMO, Hadassah, and the Government of Israel, which includes various operational, financial and corporate governance matters. In accordance with the recovery plan and Recovery Agreement, HMO undertook to transfer to the Government all the Hospital's rights in the properties which do not serve for the functioning of the Hospital and undertook to pledge additional assets and certain sources of income to the Government. The Recovery Agreement is effective as of July 28, 2014. Net income from the Recovery Agreement in 2021 and 2020 includes grants of $30,069,427 and $30,940,637, respectively, from the Government of Israel...

"In November 2021, as a result of the delay in legislation due to COVID, the parties agreed to extend the recovery agreement for an additional year. The agreement expired as of December 31, 2021.

"In accordance with the Recovery Agreement, HMO received a long term loan from [the] Government of Israel with an outstanding balance of $38,034,676 and $31,160,317 at December 31, 2021 and 2020, respectively. In 2021, accrued interest amounted to $5,837,371, which is included in the loan balance...

"The loan bears interest of 3.85% annually. During the years of the Recovery Agreement (through December 31, 2020), according to the terms of the Recovery Agreement HMO undertook to pay interest only and beginning in January 2021, the principal will be paid in 120 monthly installments. In accordance with the Recovery Agreement, the aggregate net value of properties of HWZOA [Hadassah, The Women's Zionist Organization of America] and of the Hospital transferred to the Government of Israel as part of the Recovery Agreement, less NIS 150 million (approximately $46,740,000 at December 31, 2021), will be netted off the loan balance. As of the date of approval of these [audited] financial statements [July 28, 2022], the net value of said properties has not yet been agreed upon by all parties. In 2017, HWZOA appealed to Court in order to determine the valuation. As a result of the dispute regarding the value of the properties, HWZOA, HMO and the Government of Israel agreed [i]n 2017 to freeze the collection of the interest on the loan from June 2017 – June 2018. This period was extended until June 2020. On November 1, 2020 the decision to freeze interest and principal repayments was extended until the earlier of January 31, 2023 or the date of settlement of the dispute between HWZOA and the Government.

"In 2008, an agreement was entered into among HMRA [Hadassah Medical Relief Association], HMO, and the Government of Israel to obtain a contribution from the Israeli government for the construction of a new hospital facility for HMO (the HMO Capital Project). In the Recovery Agreement, it was agreed that during the Recovery Period, HMRA and HWZOA (jointly) undertook to transfer annually to HMO during the Recovery Period an amount of $19 million, and that the implementation of the said undertaking of HMRA and HWZOA pursuant to the Recovery Agreement, will constitute implementation of the undertakings of HMRA pursuant to the said 2008 Agreement... The 2008 Agreement required HMRA to allocate to HMO the annual amount of no less than $19 million for the operation of HMO up to completion of the new hospital facility.

"The construction of the HMO Hospital Tower was completed in 2018. The Recovery Agreement also requires HWZOA and HMRA to transfer all funds for the HMO Hospital Tower to an HMO special bank account, which is separate from the remaining financial activities of HMO. Since the inception of the project, HWZOA and HMRA have transferred to HMO annually $19 million for operations and funds for the HMO Hospital Tower."

According to the Hadassah consolidated audit of December 31, 2021 (Note 17, COVID-19 Pandemic):

"The spread of Coronavirus (COVID-19) around the world and in the United States has caused business disruption, a reduction in economic activity and volatility in capital markets. In response, the Organization's management took steps to ensure effective remote operations, replaced in-person activities with digital ones, temporarily refocused fundraising activities on support for HMO's [Hadassah Medical Organization's] COVID-19 efforts, and took steps to increase liquidity and reduce its operating budget. Management will continue to closely monitor the impact of COVID-19 on its operations.

"In Israel, the outbreak of COVID-19 in the first quarter of 2020, led the Israeli Ministry of Health to instruct HMO to cease elective activities for a two-month period, prohibited medical tourism activities, and restricted the admission of patients from the Palestinian Authority. At the same time, the Ministry has instructed HMO to open hundreds of beds for respiratory patients, condense medical staff, and increase supplies of medicines and disposable medical equipment, and to construct a laboratory for COVID-19.

"As a result of the above, there was a sharp decrease in HMO's revenues from medical operations and an increase in operational expenses. In order to mitigate the damage, HMO's management took emergency measures which included, furloughing approximately 200 workers on unpaid leave, and approximately 250 additional workers on forced leave for a two to three-month period, as well as reducing the use of subcontractors. Furthermore, HMO's management has frozen any non-urgent projects and executed a plan for providing full capacity medical services in parallel to COVID-19 medical services.

"During 2020, the Government of Israel published support tests for funding COVID-19 activities in a number of different areas, including investment in the requisition of emergency supplies; medications and medical equipment; protective equipment for medical teams; reinforcements for laboratories and reimbursement of expenses which were covered in the past by income from activities. In January 2021, the Government of Israel committed that as long as the COVID-19 pandemic is continuing to spread, all Hospitals will be granted in 2021 the entire support amount budgeted or received in 2020, including one-time grants for services relating to COVID-19 patients and compensation for reduction of income. If the pandemic ceases, the Ministry of Finance is committed to cover salary and supplier expenses during 2021. As part of these support tests HMO received grants during 2021 and 2020 totaling $55,800,000 and $52,700,000, respectively, included in contributions and bequests, which covered a significant portion of the increase in expenses and income reduction. Additionally, during 2021 and 2020 HMO was paid $21,400,000 and $20,100,000, respectively, by the Government of Israel to perform COVID-19 tests, which are included in patient service revenues. As of the date of these [audited] consolidated financial statements [July 28, 2022], the Israeli Ministry of Health and the Ministry of Finance, as part of their general oversight of the coronavirus situation, are continuously monitoring public hospital activities."

According to the Hadassah consolidated audit of December 31, 2021 (Note 3, Fair Value):

"The Organization invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the consolidated balance sheet."

According to the Hadassah consolidated audit of December 31, 2021 (Note 11(c), Employees' Benefits Liabilities, HMO Severance):

"HMO [Hadassah Medical Organization] employee's [sic] severance pay is covered by current deposits to the Hadassah Employee Pension Fund [HEPF]. Employees who resign after attaining seniority of at least five years are entitled to, in addition to their pension rights, compensation at the rate of 2.33% of their last salary multiplied by the years of employment. Employees insured with HEPF who resign before reaching retirement age and who liquidate their pension rights are entitled to full severance pay from the Hospital, part of which is to be reimbursed by HEPF.

"The accrual for additional severance pay is approximately $73,657,000 and $70,051,000 at December 31, 2021 and 2020, respectively..."

According to the Hadassah, The Women's Zionist Org. of America 2021 tax filing, Hadassah reports re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):

Regarding severance payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, line 4a):

"During CY 2021, Hadassah's former CEO/Executive Director [Janice Weinman] retired. The amounts in the schedule [Schedule J, Part II] include contractually due severance payments of $102,500."

[The reported total compensation for Janice Weinman, "Chief Executive Officer (end 6/30/21)," in 2021 is $402,939 (IRS Form 990, Schedule J, Part II).]