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 A30 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 .