World
New Nonprofits Worry
Could the economic downturn kill Jewish innovation?
Jacob Berkman
Jewish Telegraphic Agency
New York
T
he past decade has seen a
groundswell of innovative Jewish
nonprofits — from the birth of a
Jewish pop culture magazine, Heeb, to the
creation of a slew of trailblazing Jewish
social service organizations, to an array
of projects that allow Jews to express their
Judaism through ways other than the
prayer book.
But as these initiatives reach adolescence
and eye expansion, the spiraling economy
and financial crisis threatens to stunt their
growth and thwart the next generation of
startups from even getting off the ground.
Story after story has been written about
fears that the economic downturn will hurt
philanthropy. The thinking goes that when
people feel economically unstable, the first
thing they do is cut their discretionary
spending — and charity, no matter the
moral or biblical obligation, is still viewed
by most as discretionary spending.
Until recently, most of the concern had
been based on speculation; charities had
been holding out hope that they would
be able to avoid significant cutbacks.
But, according to a survey taken in late
September by the private wealth research
firm Prince & Associates, the cuts have
arrived.
According to Forbes magazine, Prince
spoke to 439 high-net-worth families, with
73 percent of respondents saying they had
been significantly hurt by the economic
downturn. Fifty-one percent said they
planned to give less next year than they did
this past year — and only 16 percent said
they planned on giving more.
Cutting Edge Cuts
The concern about such trends was
detectable recently at the Manhattan
launch party for the 2008 edition of
Slingshot, an annual guidebook to inno-
vative Jewish organizations put out
by the Andrea and Charles Bronfman
Foundation. The leaders of several of the
most well-regarded and established inno-
vative Jewish projects expressed concern,
saying they are expecting to feel the pinch.
"Most recently, we are starting to hear,
`We love what you do. We think that it is
really, really great. And because of the
economy, we are not going to fund any
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October 16 • 2008
jN
new projects this year. We are going to
"Everybody is looking to this as a real
fund the things that we already fund.' And
event that they are dealing with; and espe-
that is only over the past few weeks:' said
cially for groups that are young and startup
Aaron Bisman, who runs JDub, the non-
and in a growth phase, it is challenging:'
profit Jewish record label that produced
said Rabbi Eli Kaunfer, the cofounder of
Matisyahu's first album.
Kehilat Hadar, an egalitarian, traditional-
"I had heard it was maybe going to be
style minyan in New York that is a model
a possibility, but we are really starting to
for the independent minyan movement.
hear that as a definitive answee
Hadar has yet to lose any grants, but
JDub, the product of two incubators of
Kaunfer has been told to brace for next year.
Jewish startups, Bikkurim and the Joshua
That is when the real crunch could come,
Venture, is widely regarded
especially for those who rely
as one of the most success-
on funding from endowed
ful young Jewish projects
foundations. Those founda-
to get off the ground in
tions are required by law to
recent years. For the last five
give away 5 percent of their
years, Bisman's budget has
assets each year, based on
increased as fenders have
the assets from the previous
taken notice of the group
fiscal year. As the market
and JDub's record sales have
drops, that 5 percent shrinks,
started to bring in additional
leaving less for foundations
income.
to give away.
Early last summer, Bisman Aaron Bis man is the
To put it in perspec-
was talking about expansion. executive director
tive, the Washington Post
Those plans were based on
reported that the Community
of JDub, a nonprofit
being able to tap into new
Foundation for the National
Jewish re cord label.
revenue streams, attract new
Capital Area, one of the area's
donors and entice foundations
largest grant makers and
to become new investors.
comparable in size to the Koret Foundation,
But by late September Bisman was talking the Pritzker Foundation and the Mandel
cutbacks — in both programming and staff. Fund, lost about $40 million between July
Bisman's experience reflects what most
and September. The fund had approximate-
philanthropy experts see on the horizon.
ly $330 million in assets at last reporting.
Philanthropists may not completely shut
Back in 2006, Hadar was able to raise
their coffers, but new grants — the life-
enough funds to launch an egalitarian
blood of young organizations — are going yeshiva. Kaunfer says he's unsure if the
to be the first to get cut because, like any
founders could have pulled it off in the
investment in any startup, they are risky
current climate.
proposals that may not pay dividends.
"Today would be a very hard day to start
Pho to by JDu b Records
I
an organization and raise the soft dollars:'
Kaunfer said.
Such projects — especially those
focused on building Jewish identity —
could be facing an even greater challenge
in the coming months if they need to com-
pete with social service agencies that are
getting squeezed on both ends as they face
greater demand for services and shrinking
revenue streams.
But a bad economy does not need to be
the death knell for Jewish innovation.
Those who run new organizations that
have established a foothold for themselves
and are looking to grow, like JDub, have
won recognition in the Jewish organiza-
tional mainstream. Their leaders have
become regular speakers at federation
events and at the federations' annual
conference, the General Assembly of the
United Jewish Communties.
At last year's G.A. in Nashville, organiz-
ers dedicated a plenary session to young
Jewish innovators and gave them a chance
to address several thousand federation
lay and professional leaders. Though they
will have to work hard to secure funding,
many of them have at least one foot firmly
in the door.
And most of the newer operations have
an advantage over established organiza-
tions: They tend to operate on relatively
small budgets of under $2 million and so
are not yet in need of mega grants.
There may even be hope for those looking
to start nonprofits, as the Joshua Venture
— the incubator that helped launch this
movement, but then went on hiatus in 2006
— has announced on its Web site that it is
now seeking new applicants.
Nina Bruder, who runs the UJC-funded
incubator Bikkurim, said she is hopeful.
"When the economy is bad, the need
for basic human services goes up and the
funding for basic human services goes
down;' she said. "In the circles that are con-
cerned about that, there is going to be a big
push about that basic subsistence needs
are going to have to be met."
"But I think there is a whole other part of
the funding community that doesn't focus
on that and still has an attention for other
kinds of creative cultural and special needs
areas:' Bruder went on. "I think we are going
to have to wait and see what happens."
❑
This article was adapted from Jacob Berkman's
blog on the nonprofit sector, which can be
found at www.fundermentalist.com .