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, 2018. Along with Hadassah, The Women's Zionist Organization of America (HWZOA), the entities included in its 2018 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 (HOI); (5) Fabulous Finds LLC (an inactive for-profit entity); (6) Hadassah Medical Organization (HMO); (7) Hadassah International Israel (HII); (8) Hadassah Stiftung Deutschland (Hadassah Foundation Germany); and (9) Hadassah Mexico, A.C. 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 these are not included in Hadassah's audited consolidated financial statements. According to the Hadassah 2018 consolidated audit (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. Together with the Jewish National Fund, HWZOA and HMRA build parks and reservoirs, make parks disabled-accessible, and support reforestation projects." [...] "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 and HMRA... "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, located in Israel, 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. ... HMO is a public benefit company. ...[It] 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 distributions 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.). "HII is registered in Israel as a Public Benefit Company. ... The Company'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."
Whenever practicable, CharityWatch obtains consolidated or combined audited financial statements that include all of the entities of a charity. Such an audit eliminates transactions among consolidated related entities and allows us to determine how efficiently an organization is operating on the whole. For more information on this topic, please see our section on Treatment of Related Organizations, which can be found on the Our Process page. |
According to the Hadassah consolidated audit of December 31, 2018 (Note 15, Recovery Agreement): "At December 31, 2014, HMO's [Hadassah Medical Organization's] unrestricted accumulated deficit, excluding net investment in property, plant and equipment, approximated $218 million. In February 2014, and as a result of financial difficulties caused by continuing operational and cash deficits, HMO 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 2018 and 2017 includes grants of $26,209,286 and $25,948,499, respectively, from the Government of Israel... "In accordance with the Recovery Agreement, HMO received a long-term loan from [the] Government of Israel with an outstanding balance of $26,613,086 and $28,852,035 at December 31, 2018 and 2017, respectively. 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 2017, HWZOA [Hadassah, The Women's Zionist Organization of America], HMO and the Government of Israel agreed to freeze the collection of the interest on the loan from June 2017 — June 2018. This period was extended until June 2019. At December 31, 2018 and 2017, advances from the Government of Israel represent $5,658,208 and $6,134,231, respectively, received in advance relating to repayment of SHARAP [Hadassah's Private Medicine Service] funds. "In 2008, an agreement was entered into among HMRA [Hadassah Medical Relief Association], HMO, and the Israeli government 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."
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According to the Hadassah consolidated audit of December 31, 2018 (Note 11(c), Accrued 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 $56,301,000 and $57,493,000 at December 31, 2018 and 2017, respectively..."
According to the Hadassah, The Women's Zionist Org. of America and Hadassah Medical Relief Association (collectively, Hadassah) respective 2018 tax filings, 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): "Richard Annis, former CFO, separated from the organization in 2017 and is entitled to payments pursuant to an agreement which is reported on Schedule J, Part II, Column (B) (iii) ['Other reportable compensation']." [Hadassah reports $430,751 in total "Other reportable compensation" for Richard Annis; his reported total compensation in 2018 is $460,274.] According to The Hadassah Foundation (the Foundation) 2018 tax filing, the Foundation 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): "Ellen Flax, former Director, separated from the organization in 2018 and is entitled to payments pursuant to an agreement which is reported on Schedule J, Part II, Column (B) (iii) ['Other reportable compensation']." [The Foundation reports $19,122 in "Other reportable compensation" for Ellen Flax; her reported total compensation in 2018 is $156,476.] |