March 2, 2000
Next generation of philanthropists takes risks with innovative projects
When a 30-something British financial investment manager took a few years off to study Jewish texts in Israel, he was struck by the differences between the financial and Jewish communal worlds.
"In the private sector, at the moment, committed young people with good ideas can find backing relatively easily, while in the Jewish world I see tremendous idealism and great creative thinking, but often tremendous obstacles to getting projects under way," Nigel Savage said.
With funds from the Nash Family Foundation, Savage created Hazon, a fledgling New York-based organization that cultivates new Jewish projects, particularly ones that may have difficulty attracting funding from traditional sources.
Among the first projects: a cross-country bike ride to promote interest in Judaism and the environment, and a program to train female Torah scribes.
Savage wants Hazon, which means "vision" in Hebrew, to serve as a "venture-capital house for Jewish ideas."
"Twentysomethings with a great idea don't walk into Goldman Sachs, which isn't really organized to help them," he explained. "They go into a venture-capital house which nurtures them along the beginnings of their project and then, as it were, hands them over to Goldman Sachs when they're at a different stage of organizational development."
It's the Jewish version of the venture philanthropy trend that is shaping the American nonprofit scene.
Applying the principles and techniques that have made Internet startups and other new companies so successful in recent years, a handful of foundations and young, affluent Jews are using money and know-how gained from the business world to create new Jewish initiatives.
They are placing special emphasis on empowering young people, whether as philanthropists, activists or beneficiaries of the new programs.
Martin Kaminer, 33, a New Yorker who heads an Internet distance-learning company, is working with the Jewish Education Service of North America and the United Jewish Communities to create a Manhattan incubator for people starting new projects benefiting the Jewish community.
Similarly, Steven Spielberg's Righteous Persons Foundation, the Nathan Cummings Foundation and the Walter and Elise Haas Foundation are joining forces to launch a national fellows program that will provide mentoring, support and $30,000 stipends for eight "social entrepreneur" Jews in their 20's and 30's.
The new efforts are even changing the language of philanthropy. Donors are called "partners," grants are "investments" and the goal is not charity, but "social return." But the differences are more than semantic: The new philanthropists are emphasizing training and mentorship just as much as dollars. And they are not afraid to take risks.
"This is an experiment," said Kaminer, describing his incubator project, which will provide office space, computers, mentoring and training workshops to six people for two-year stints.
"By the time they emerge, some projects will be self-sufficient, some will be part of other organizations and some won't work out."
Brian Gaines, executive director of The Joshua Ventura fellowship program and himself a former Ben & Jerry's franchise owner, echoed that approach.
"If even one out of the eight becomes the next Makor or the next great program that connects with people in some way, then I think we would have been successful," he said, referring to a recently opened Manhattan cultural center that serves unaffiliated young Jews and is funded primarily by mega-donor Michael Steinhardt.
"Some people may say at the end, 'My idea isn't going to work, but I'm going to take what I learned here and apply it to B'nai B'rith or some other existing organization and make a difference there,' " Gaines said. "It's about empowering people."
The venture-philanthropy style differs dramatically from the more cautious and deliberative centralized Jewish federation approach of allocating campaign funds to established agencies and implementing new projects only after appointing task forces to study the situation.
"No committees were involved. This is not the result of a study calling for new organizations," said Kaminer, of his incubator. "We're learning as we go along."
Nonetheless, many of the new projects enjoy close relationships with federations. The incubator falls under the auspices of UJC and JESNA, two national Jewish organizations funded primarily by the federation system, and Kaminer is hoping participants learn from -- and are able to influence -- their hosts.
"If you're in the incubator because you have an idea for a fantastic program about college-age kids, I want you to figure out who on the UJC floor controls the money for that and get their attention," he said.
A handful of federations are creating their own venture philanthropy groups.
In 1998, the United Jewish Appeal Federation of Greater Washington formed the Jewish Venture Philanthropy Fund, a group of 35 people -- primarily local business executives in their 30's, 40's and 50's -- who each invested $10,000 toward new projects. The beneficiaries of the first funding cycle -- in the areas of Jewish renaissance, social services and overseas needs -- will be announced in the coming weeks.
One of the founding partners, 38-year-old Melanie Sturm, described the funds raised as "risk capital" and the potential beneficiaries as "new and innovative projects that would be more risky but could have more impact" than existing programs funded through the federation.
"Younger people want to be more involved in directing their giving," explained Sturm, an investment banker who says she -- and many of the other partners -- are newcomers to the federation world. "We thought this would be a response to that and an interesting experiment."
Despite resistance from the "old guard," who were fearful that the effort would undermine the federation's annual campaign, Sturm said the project has attracted many people who had never made large gifts to federations before. As a safeguard of sorts, partners are required to contribute at least $5,000 to the annual campaign in addition to the $10,000 investment.
UJA-Federation of New York recently launched a similar venture philanthropy fund, and a number of federations around the country are talking about starting them.
But some worry that venture philanthropy's focus on what's new and different -- while attractive to young donors -- could endanger existing agencies whose services are essential, albeit not glamorous.
"Creating new programs is intriguing and it's interesting, but then somebody has to pay for turning on the lights in the synagogue and for hiring the professionals at the JCC," said Gary Tobin, the president of the San Francisco-based Institute for Jewish and Community Research and author of a recent study on Jewish family foundations.
Joel Carp, the senior vice president of Chicago's federation, agreed, but said that it is possible to persuade donors to support nuts-and-bolts services, too.
"I suspect that for some people the thought of only participating in keeping Jewish communal services going -- paying bills for stuff that's very basic -- is not seen as dramatic or sexy," he said. "But I spend a lot of time taking donors and prospective donors to see the services we provide and it's extremely rare when you put donors in front of the people who we take care of that they're not deeply touched by what they see."
According to Washington's Sturm, venture philanthropy will not replace federation campaigns that "are the best at raising low-risk money for sustaining basic needs and services."
"Federations, if they are smart, will try to adapt and do both,'' Sturm said.
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