The Jewish Community Turns to Crowdfunding

by Abigail Pickus

When The Jewish Journal of Greater Los Angeles made headlines recently with its public plea to raise $9 million to get Woody Allen to film his next movie in Israel, they helped expose the budding concept of crowdfunding – and not just any crowdfunding, but Jewish crowdfunding.

“The Woody Allen Israel Project,” posted on the Jewish crowdfunding platform Jewcer, which asks “[e]verybody who cares about great movies, and about Israel, [to] give a few dollars,” is just one of a host of new ways the Internet is revolutionizing how Jews give tzedakah and support the projects they believe in.

To the uninitiated, crowdfunding is when individuals turn to the public via the Web to help fund their personal projects. Kickstarter, the most recognized crowdfunding platform, launched in 2008 and is famous for its wacky, creative projects. Crowdfunding has grown in popularity over the past five years – and in tandem, more and more niche donation portals have been popping up, according to Debra Askanase, a Boston-based digital engagement strategist. “What we’re seeing is online giving as a whole is up across all channels between 10-20% every year, year after year,” said Askanase.

What’s unique about the crowdfunding model is how it harnesses the power of the public, and through typically small donations, can make possible what would otherwise have been a pipedream – especially for artists and innovators who would otherwise have had to wait for support from the government, banks, funding bodies or other traditional sources.

Fundraisers and organizations are also turning to the public to help them raise money for charitable ends, only those in the field clarify that this online endeavor is called, crowdfundraising. “Everybody is using the buzzword ‘crowdfunding,’ but crowdfunding sites like Kickstarter, for example, are not for charities and they expressly say that charities cannot use their website,” said Yonatan Ben Dor, Founder and CEO of Israel Gives, a website that connects Israelis and people around the world to Israeli nonprofits.

This summer, Ben Dor will launch a new global fundraising platform, JRaise.com, which will enable people to donate or fundraise for Jewish organization worldwide.

“Jewish organizations, particularly in North America, are years behind their secular competitors,” said Ben Dor. “They are not taking advantage of online fundraising and online donating tools. It’s not the question of what technology they should use, but why aren’t they using any online platforms successfully?”

While there are a number of websites that allow people to fundraise for nonprofits, including Jewish nonprofits, this will be the first exclusively Jewish fundraising platform that highlights only Israeli and Jewish nonprofits around the world, according to Ben Dor.

“Our website is unique because it highlights Jewish charities,” he said of the platform that will feature 30,000 Israeli nonprofits and 3,000 Jewish nonprofits from the U.S. and the U.K. “We are appealing to the general public by asking them, ‘Do you feel connected to a Jewish cause or a Jewish organization and if so, here is a tool you can use to donate directly.’”

Sandy and Gary Ungar launched their crowdfundraising platform Root Funding in 2009. An American Jewish couple who settled in Israel, while their site is not exclusively Jewish, it has a definite “footprint in the Jewish arena,” according to Gary. (A large percentage of the campaigns are connected to Jewish or Israeli nonprofits).

The platform is a very 21st century concept that relies on the power of the individual to tap their personal networks to support the causes they believe in.

“What we saw back in 2009 when economic times were hard was that organizations were looking to their existing base of support and trying to squeeze more dollars out of the same people,” explained Gary Ungar. “This got us thinking. How can an NGO broaden their base of support and raise money and awareness so that they are not solely relying on the same people, season after season?”

The way it works is that people can launch their own personal online campaigns on behalf of an organization. It’s called “branching.” For example, a nonprofit may have its own page with a campaign goal and then connected to this organization are hundreds of branch pages where individuals, like Bar or Bat Mitzvah youth, have their own campaign goals. Since these branch campaigns are linked to their personal social media pages, the Bar Mitzvah child can publicize their campaign goal on their Facebook page for all of their friends to see. This, in turn, allows their personal network to support them by donating, adding personal comments, keeping track of whether the end goal is met, being part of the buzz surrounding the campaign, and also – the organization’s other main objective – learning about the organization itself.

“There is no limit,” said Ungar. “You can have a branch campaign within a branch campaign. We don’t define what that structure should be – we just provide the flexible platform.”

What crowdfundraising like this also does is enable organizations to breakdown large fundraising goals into very manageable components. So if a synagogue wants to raise $1 million dollars, they can break down this goal into smaller campaigns. Congregants can each launch branch campaigns and of the families participating, each child can launch his or her own personal campaign.

“There is value in the small donor not the mega donor,” said Ben Dor of JRaise, which underscores the notion that fundraising in the next century is heading towards the power of the micro instead of the macro.

Beyond that, crowdfundraising is often effortless because it is embedded into the social media realm where people are already spending more and more of their time.

“This taps into the way people communicate today,” said Ungar. “It’s a very natural extension of how people spend their time and how they talk to others. People, by nature, want to do good and we make it very easy for them to do so and to get involved through what they’re already doing.”

What crowdfunding and crowdfundraising sites have in common is they are fueled by the power of the personal connection.

“Often, a person is not going to give randomly to a nonprofit they have never heard of, but if their sister or friend says, ‘This is really important to me,’ they will say yes. What this goes back to is the relationship between the cause and its supporters; it comes down to building your online community and building it passionately,” said Askanase, the digital engagement strategist.

Proponents of online crowdfundraising argue that more than the money raised is the awareness generated through all of the personal ambassadors spreading the word.

“Think of how many people are being introduced to the organization,” said Ungar.

“It’s difficult to measure the number of people exposed to these organizations who wouldn’t have otherwise, but the exposure is exponential.”

That is the main reason why Aleh, an organization that has residential facilities for severely disabled children in Israel, has used Root Funding for its online campaigns for the past two years.

“Our goal is not just to raise the money because we can do that in a traditional way. Our goal is to create relationships and to create awareness, but not from me pushing Aleh onto someone, but from a friend saying, ‘This is really cool,’” said Dov Hirth, who is on the marketing and development team for Aleh.

From a psychological perspective, turning the fundraising reins over to the public creates many favorable outcomes.

“When people get involved in the fundraising themselves this creates a different type of commitment to the organization. They feel more attached,” said Ungar. Case in point are when students create their own campaign pages to raise money for their school or B’nei Mizvah youth fundraise for their favorite charity and are able to stamp their personal messages on their pages.

It also empowers them.

“The whole concept behind this is we are giving the fundraising opportunities to the donor. We’re putting the ball in their court,” said Hirth.

And that, exactly, is what experts say is how the world is shifting to accommodate a new, more hands-on generation.

“The idea is not to ask for help, but to ask for participation,” said Naomi Leight, one of the co-founders of Jewcer, the Jewish crowdfunding platform. “For 20-45 year-olds to participate in causes, ideas and projects, they don’t want to just give money, they want to be involved in active philanthropy. They want to ask people to participate, to share their projects, and then pledge. It’s not just a strict donation; it’s a pledge and in return for your pledge, you receive a reward, which can be as simple as a thank you email or two tickets to a movie premiere.” (In the case of the Woody Allen Israel Project, Publisher and Editor-in-Chief of The Jewish Journel Rob Eshman will personally cook dinner for anyone who contributes towards the $5,000.00 cinematographer fee.)

The L.A.-based Jewcer, launched in March 2012 by five Jewish Americans and Israelis, aims to “… help strengthen the connection between the younger generation and Jewish and Israeli causes.” It works just like other crowdfunding platforms with what they call the “innovators” seeking to finance their ideas through small pledges collected from many funders, in this case, the “jewcers.” Social media is used to promote the projects and to keep the jewcers updated on its progress. Current projects include “Dude, Where’s My Chutzpah?” a comedic web series that follows a young American Jewish woman on her adventure to discover what it means to be Jewish (currently, she has reached just over $3,000 towards her $4,000 goal) and “Once in a Lifetime HD,” where a group of Tel Aviv University students want to bring people to Israel to tell its story through Instagram pictures (so far, $766 has been raised of the $2,000 goal).

(Note: Jewcer is not the first attempt at a Jewish crowdfunding platform. JCrowd, a.k.a. “the best way to raise money since the invention of the tzedakah box,” launched in 2010 and shut its doors in March.)

Like crowdfundraising, where the goal is awareness and not just raising money, with crowdfunding the idea is to get people motivated behind an idea.

“The traction behind the project, getting as many people to participate as possible, is more important than meeting the goal itself,” said Leight.

Like the crowdfundraising platforms, Leight sees Jewcer not as a competitor, but as a vehicle that can only enhance and work with traditional Jewish funding bodies.

“The premise is there are a ton of great ideas out there and also a ton of bad ideas,” said Leight. “Sometimes bad ideas get out there. Let’s say $20 thousand is spent by a grantmaking organization to support a project and the community doesn’t show up. So here they have just produced something and the money is wasted. The idea behind crowdfunding and community support is you’ve got Jewish ideas that help the community and/or Israel and here you have 100 or more people saying, ‘I want to put my money where my mouth is because I want to show my support.’ We want to partner with the traditional Jewish organizations and grantmakers. We want them to use us as a filter. If we think it’s a good idea and see that it’s popular, we will raise the matching amount of funds.”

“There are so many ideas out there, we just have to reach the people and facilitate them getting onto the platform. We see success as changing the way Jewish ideas are funded,” Leight continued.

Despite the good intentions, experts are quick to point out that many of the traditional fundraising organizations may not wholeheartedly welcome these new online fundraising platforms.

“One of the differences between personal fundraising and something like Kickstarter is with the personal fundraiser you give because of the person who asked you to give, the cause is secondary. This is a big challenge for fundraisers since ideally, they think about the lifetime value of a donor. If you gave to an organization because of friends, they still are going to want you as a donor, but you’re not necessarily that into the cause,” said Michael Hoffman, a long-time consultant to nonprofit leaders on online fundraising and CEO of the Chicago-based see3 communications, an interactive communications agency that works exclusively with nonprofits and foundations.

Another challenge with crowdfunding and fundraising from the perspective of traditional organizations is the demand for complete transparency.

“Organizations generally hate giving that is restricted rather than having money for general support that can be allocated for what is needed,” said Hoffman. “But that is the exact opposite of [crowdfunding] where they are fundraising for one particular thing and need to completely fund it and if they don’t make the goal then no one has to pay. Nonprofits are not generally set up for that. They want general support.”

Despite popular sentiment, general support may not be inherently suspect. Larger nonprofits or fundraising institutions, like the Federation system, argue that they have the expertise to allocate bulk sums according to the need and sometimes, administrative and overhead fees are incorporated into the mix.

But enter the Internet and a new generation of funders and anything less than complete transparency and treating funders as equal partners just won’t cut it.

“What all of these things have in common is this idea of disintermediation,” said Hoffman. “People are saying, ‘I want to fund this thing and I want to be directly involved in the action. I don’t want to give my money to some giant institution and have no control over what happens.’ The Internet has made it possible for people to find that cool project they want to fund in a way that was never possible before and in a way that’s exciting, but for the established organizations it can be frightening.”

So where does this leave the Jewish organized world?

According to Hoffman, “The train has left the station,” which is another way of saying, crowfunding and crowdfundraising are the wave of the future.

But old school organizations can take heart. Despite all indications that in a progressively individualized world, where a new generation wants to choose from a menu of options that appeal to them, what the “crowd” continues to vote for again and again is that they want to be part of something bigger than themselves. They are, in essence, voting with their comments and likes and dollars for something as old as Judaism itself: Community.

“This is really about how to make individual donors feel needed and connected and that is the most powerful tool of all,” said Hoffman.

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Comments

  1. says

    Thank you, Abigail, for this comprehensive look. If I may, I want to suggest that there are two questions that prospective donors should ask when considering a contribution through a crowdfunding website:

    (1) What percentage of my gift actually will reach the cause I support? On top of credit card transaction fees are taken (3%-5%), some global crowdfunding site fees can reach 15%. That means as little as 81¢ on the dollar might actually reach the nonprofit, when 100% of a check or 95-97% of a direct credit card transaction gets there. The sites mentioned here appear to charge 0% (Jewcer) 2.5% (IsraelGives) and 5% (RootFunding, KickStarter). And as the article notes, transparency is a huge issue. While all of the above sites disclosed their fees at least somewhere on the site, some sites make it far easier than others to find this information.

    (2) Is my gift tax deductible? Transactions on Kickstarter and Jewcer are *not* tax-deductible. Other crowdfunding sites like IsraelGives and IndieGoGo are able to arrange tax receipts depending on the status of the organization raising money. IndieGoGo even has partnerships with a few major fiscal sponsors, like Fractured Atlas, the San Francisco Film Society, and others.

    Because of these two questions, nonprofits need to consider the costs and benefits of crowdfunding websites. A crowdfunding website is great for finding new friends and supporters, because new revenue is better than no revenue, but it is not a good primary giving portal nor as a tool for direct fundraising to one’s existing donor base, as the fees can seriously cut into expected revenues.

    All of that said, I’m especially intrigued about the possibility of crowdfunding sites to help launch *for-profit* Jewish social ventures …but that’s probably a conversation for another day!

  2. says

    Shawn, as you suggest, organizations, as well as people that support those organizations, should be mindful of the costs associated with a donation. The benefits of using a specific crowd-funding or crowd-fundraising platform should also be taken into account. Focusing on Root Funding, we help organizations reach beyond their typical list of supporters. We empower organizations to mobilize their base of support, making it easy for a supporter to reach out to their friends, family and co-workers. If not for these supporters, their network of contacts would not have considered donating. Better yet, this mobilized support base is now spreading the word about the good work that the organization does. Having others speak positively about what your organization does, is so much more powerful than anything that an organization can say about itself. (On that front: I’d like to shout out a quick thank you to Dov Hirth from Aleh for his kind words about Root Funding.)

    In regard to our fee structure, Root Funding offers two plans. You referred to our standard plan which is based on a percentage of funds raised, we also offer a $39.99 / month subscription plan. For more information, the following link outlines the two plans in detail: http://www.rootfunding.com/non-profit-registration-plans

    The raw cost of processing a donation directly cannot simply be compared with the costs associated with a crowd-fundraising platform. Organizations benefit from the crowd-fundraising process itself. Finally, it should be noted that there are also costs associated with driving prospective donors to a non-profits own donate page – beyond the credit card processing fees.