The 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 in a poll of 439 high-net-worth families reported in Forbes magazine, 73 percent of respondents saying they had been significantly hurt by the economic downturn. Fifty-one percent said they planned on giving less next year than they did this past year — and only 16 percent said they planned on giving more.
“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 new projects this year. We are going to fund the things that we already fund.’ And that is only over the past few weeks,” said Aaron Bisman, who runs JDub, the nonprofit Jewish record label that produced Matisyahu’s first album. “I had heard it was maybe going to be a possibility, but we are really starting to hear that as a definitive answer.”
JDub — the product of two incubators of Jewish startups, Bikkurim and the Joshua Venture — is widely regarded as one of the most successful young Jewish projects to get off the ground in recent years. Early in the summer, Bisman was talking about expansion. Those plans were based on being able to tap into new revenue streams, attract new donors and entice foundations to become new investors.
But by late September, Bisman was talking cutbacks — in both programming and staff.
Bisman’s experience reflects what most philanthropy experts see on the horizon. Phil-anthropists may not completely shut their coffers, but new grants — the lifeblood of young organizations — will be the first to get cut because, like any investment in any startup, they are risky proposals that might not pay dividends.
“Everybody is looking to this as a real event that they are dealing with, and especially for groups that are young and startup and in a growth phase, it is challenging,” said Rabbi Elie Kaunfer, the cofounder of Kehilat Hadar, an egalitarian, traditional minyan in New York that is a model for the independent minyan movement.
Hadar has yet to lose any grants, but Kaunfer has been told to brace for next year. That is when the real crunch could come, especially for those who rely on funding from endowed foundations. Those foundations are required by law to give away 5 percent of their assets each year, based on the assets from the previous fiscal year. As the market drops, that 5 percent shrinks, leaving less for foundations to give away.
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 organizational mainstream. And most of the newer operations have an advantage over established organizations: They tend to operate on relatively small budgets of less than $2 million and so are not yet in need of mega-grants.
Nina Bruder, who runs the UJC-funded incubator Bikkurim, said she is hopeful.
“I think there is a whole other part of the funding community that … still has an attention for other kinds of creative cultural and special needs areas,” she added. “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.