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To quickly counter negative media reports, the S.F.-based Jewish Educational Center released new financial figures this week showing that 37 cents of every dollar goes to charitable causes.

Only a week ago, the Jewish Bulletin revealed a JEC financial disclosure statement that showed just 17 cents of every dollar went to charitable purposes in the 12-month period ending March 31, 1996.

In a visit to the Bulletin offices Wednesday morning, JEC representatives announced they had revised their accounting methods and were able to show that 37 cents of every dollar was used for charity in the subsequent six months, from April 1, 1996, to Sept. 30, 1996.

Nonetheless, the nonprofit JEC, which brings in millions of dollars annually through its used-car auctions, still gives far less to charity than the standards set by charitable watchdog groups. Those guidelines recommend 50 cents of every dollar go toward charity.

It is unclear whether the California Attorney General's Office or the Internal Revenue Service will accept JEC's new accounting methods, which use net proceeds rather than gross receipts to calculate its charitable spending.

If the government would require the organization to use its former accounting practices, the new figures would have to be revised to show that only 22 cents of every dollar went to charity.

Belinda Johns, a state deputy attorney general who is overseeing an audit and investigation into the JEC, said that rearranging the accounting practices for expenses doesn't change the amount spent on charitable programs.

"People like to get creative when they have high costs," Johns said Wednesday.

To make its case to the Bulletin, the JEC on Wednesday sent new board member Carol Ruth Silver and two of JEC's paid consultants, corporate tax attorney Jordan Rose and public relations executive Sam Singer.

Rabbi Bentzion and Mattie Pil, the founders and top officials at JEC, chose not to attend.

Silver, a former member of the San Francisco Board of Supervisors, called the previous accounting methods "unsophisticated."

The trio said they hope the public will recognize that the JEC's used-car donation and auction program incurs more expenses than other charities that solicit only cash.

The JEC brought in $4.59 million worth of used cars and other property and spent $1.03 million on charitable programs during the six-month period ending Sept. 30, 1996.

Pat Wallace, president of the San Francisco Bay Area Better Business Bureau, was not impressed with the reorganized accounting practices.

"What they've done is nonsense," he said.

According to Better Business Bureau standards, 50 cents out of every dollar that a nonprofit collects should go to charitable programs. Even with the new accounting practices, the JEC does not meet that guideline.

"It's very low, either way," Wallace said.

The new documents also showed that in August the JEC formed a wholly owned subsidiary called United Business Management Enterprise, a "for-profit California corporation that conducts auctions of used, donated property."

The subsidiary will be required to pay taxes, Rose said, but car donors will still receive a tax write-off because they are giving their vehicles to the JEC. The Pils are not on this corporation's board, said Rose.

Complicating the financial picture is the disclosure in the documents that the new corporation charges the JEC "$50 per vehicle sold and all expenses incurred and approved by JEC for which UBME paid on JEC's behalf."

Jordan called the creation of UBME a "compliance issue" with the Internal Revenue Service, and a "very common approach" for charities with operations such as the JEC's.

"Otherwise, the IRS would say you're operating like a business," Rose said. "If you don't do this, you're subject to attack by the IRS."

But Wallace of the Better Business Bureau contended that creating such corporations is "just a way to hide reality."

A second for-profit corporation will be formed this year to handle the towing and auto repairs, Rose added.

The JEC has garnered attention of the media and the government since April, when the Wall Street Journal ran a front-page article questioning the nonprofit's operations.

Since it began radio ads for cars in December 1993, the charity has grown remarkably. Before then, the JEC reportedly brought in less than $25,000 annually. With auctions in the San Francisco, Los Angeles and New Jersey areas, the nonprofit reaped $4.59 million in one six-month period last year.

Charitable programs at the JEC include its 120-student Schneerson Hebrew Day School in San Francisco and its summer camp. The group also runs a variety of programs for immigrants, including English classes, job training and religious education.

Silver joined JEC's board this week after informally helping the group for the past year. An attorney and real-estate broker who served on the San Francisco Board of Supervisors from 1979 to 1989, Silver said she has known Rabbi Pil for many years and could always count on him to help someone in need.

"It's wrong to trash Rabbi Pil, who is taking a very low salary and living very modestly," she added.

Singer also defended the Pils.

"All along they've been doing good deeds," said Singer, who is co-owner of San Francisco public relations firm Kamer-Singer & Associates.

Silver said she wanted to publicly release the latest financial statements as soon as possible "because of the mess that's out there" since last Friday's Jewish Bulletin article, which was then picked up by many other Bay Area media.

Last week, the Jewish Bulletin reported that JEC collected a record $8.54 million worth of cars and real estate in the latest fiscal year that ended March 31, 1996.

Of that income, 17 cents of every dollar went to a charitable program. Sixty-four cents of every dollar was spent on fund-raising, management or general expenses. The rest was held as assets.

JEC's next official financial disclosure forms, which are required of most nonprofit groups to maintain their tax-exempt status, are not due to the IRS and state Attorney General's Office until August.

But the JEC handed over to the state Tuesday an audit prepared by an outside accounting firm but paid for by the Jewish Educational Center.

By Wednesday morning, Johns hadn't received the audit but said it was likely the forms were first sent to the state office in Sacramento.

Johns said she cannot disclose what the state is looking for in its investigation. "We have the discretion to look at as broad a base as we need to," she said.

Regarding the revised accounting standards, Johns said she couldn't determine whether the charity would be allowed to file its tax forms using those methods.

But Rose said an accountant assured him it would be acceptable for the JEC to list its net proceeds under the category labeled "gross receipts" in the official forms.

"In our view, this is the proper way of looking at it," Rose said.

He added that he didn't believe the previous tax return was "wrong." It was simply an alternative presentation of the figures, he said.

According to the new documents, the JEC brought in $4.59 million worth of cars and other property. The organization spent $1.03 million on charitable programs and $1.7 million on fund-raising and management expenses.

According to those papers, JEC held $2.35 million in assets on Sept. 30. Of that amount, $1.2 million is reserved to purchase the building and land of its school new site.

The JEC continued to spend more on advertising — listed as a fund-raising expense of $1.17 million — than it did on charitable deeds — $1.03 million.

The accounting changes are fairly simple.

In the new documents, a figure that in previous years would have been listed under fund-raising expenses has been moved. It is now listed as a "cost of donated property."

That figure, $1.95 million, includes $500,000 in salaries and $819,000 in towing and auto repair services.

Rose readily acknowledged JEC's learning curve in dealing with finances.

"We found a very naive and unsophisticated group of individuals who were suddenly bringing in more money than they ever dreamed of," Rose said. Their lack of financial expertise hurt them, he said.

"They're a pretty clean organization now."