Anticipating that a slow economy and the conflict in Iraq may thwart its annual campaign, the S.F.-based Jewish Community Federation has warned beneficiary agencies to brace for a 10 percent cut in their allocations.

While recognizing the JCF's rationale, agency heads said the potential cuts couldn't come at a worse time. Agencies are already stretched, with many service providers struggling to accommodate a mushrooming client base hit hard by the economy.

The agencies were instructed to submit budget requests that are 10 percent lower than last year's.

For Jewish Vocational Service, a 10 percent cut would reduce its allocation by $54,000. Executive Director Abby Snay said that would force a staff reduction, which, in turn, would strain the organization's ability to help the unemployed find work.

Losing one caseworker, according to Snay, could keep scores of job seekers from finding employment.

"That's a staff position. That's basically 100 jobs in a year [that won't be found for JVS clients]," she said.

"Over the last two years since the recession began, we're seeing a 70 percent increase in the numbers of people coming to us to use our services. We're working with close to 4,500 people this year…We're in triage mode here."

Sam Salkin, the CEO of the S.F.-based JCF, referred to the potential reductions as a "planning exercise," strenuously avoiding the term "cuts."

"You don't know what you'll get until the campaign ends. If we have a successful campaign — and I want to emphasize that we're on track to have a successful campaign — we can allocate. If people are concerned about [the war in Iraq] and the recession, and that has a negative impact on the campaign, then we'll have less allocations," said Salkin, who added that it is too early to tell if the federation will be forced to lay off workers this year.

"Our campaign is off to a very solid start. But we also read the paper. We know that the United Way campaign may be down as much as $10 million this year…Agencies are not being cut today. Asking an organization to present its request for an allocation at 10 percent less than last year is really a way to tell what an agency does that is most important. It's a way to tell where they have room, what activities are less than core."

The federation currently allocates just under $9.8 million to local agencies, and an additional $1.2 million to national agencies, some of which have Bay Area offices. More than 60 agencies receive federation funding, including five day schools, nine Hillels, four Jewish community centers and such organizations as the Bureau of Jewish Education, the JVS, Jewish Family and Children's Services, and the Jewish Community Relations Council.

Anita Friedman, executive director of the S.F.-based JFCS, responded to the federation's instructions in a manner similar to Snay.

With both health care and insurance costs up by as much as 20 percent, a possible 15 percent cut in government funding of medical care, and a 50 percent spike in clientele since last year, the warning of a potential $51,000 cut from the JCF is the latest of many setbacks for Friedman.

"It's just more bad news. What we need is an increase, not a decrease," said Friedman, whose organization received a 7.5 percent decrease in its federation allocation last year.

Echoing Snay, Friedman noted that a $51,000 drop "is a full-time position that could have helped 150 families in a year. We haven't had layoffs yet. We're not filling some positions and consolidating positions. Right now, we're trying to lose weight without amputating any appendages."

Being the bearer of bad news isn't pleasant, noted Daniel Grossman, the JCF's chairman of planning. But the federation felt a responsibility to inform agencies of potential reductions well ahead of the budgeting process.

Soaring insurance and security costs are hurting the JCF as well as its agencies, potentially cutting into allocations, said Grossman. Plus, in some cases the federation "over-allocated" in recent years.

"You know, we make a decision on how much to allocate in May, when the final fund-raising is not in until the end of June," he said.

"We try to be as precise as possible about nailing that down, but sometimes we miss."

He gauged the possibility of allocations being cut as "very likely."

Grossman and the JCF campaign chair, Stacie Hershman, echoed Salkin's assertion that the federation is actually ahead of last year's fund-raising totals — but noted it has put a greater effort into raising more money in the campaign's early stages.

If allocations are reduced, Grossman and Hershman said that organizations receiving a larger percentage of their overall budget from the JCF stand to suffer less-extensive cuts.

Agency directors — some of whom were caught off-guard by the JCF's budget request earlier this year — said they understood the circumstances but they were in for a real struggle.

"We had actually already done our budget at the time we received the notice. There's nothing we can do, so we swallow it, I guess," said Rabbi Avi Schochet, headmaster of South Peninsula Hebrew Day School, which faces a potential reduction of more than $22,000.

"I can't fault them if the money is not there. If I knew somebody else was getting it, then I might. But certainly I don't fault them."

Schochet said he wouldn't raise tuition because "parents are in just as tight a spot as everyone else."

In Oakland, Ami Nahshon, executive vice president of the Jewish Community Federation of the Greater East Bay, said he hadn't heard about the S.F-based JCF's budget requests. He anticipates East Bay agencies will receive the same allocations they did last year, but he noted those totals were lower than in years past.

While S.F.-based JCF officials contacted by the Bulletin hoped the situation would spur donors to give more, they denied that the budget announcement was a fund-raising measure.

"We wanted to convey the news early to agency partners so they didn't feel blindsided," said Grossman.

Added Salkin: "That's cynical. We need people to give more money. We don't need to do this for people to know [we] need more."

Rabbi Henry Shreibman, head of schools at Brandeis Hillel Day School, takes the federation at its word.

"I believe the federation is signaling, with full integrity, the fact they may not hit their mark. That's very kind of them to indicate this now to the agencies, and personally, I'm appreciative," said Shriebman, who faces a possible $33,500 reduction.

"If this produces more fund-raising, God bless 'em, they'll reallocate."