Back to School for the Jewish Philanthropic Community

By Karen Berman

The recent Giving USA Report, researched in partnership with the Indiana University Lilly Family School of Philanthropy, revealed that charitable giving is up. Contributions have grown by 22% since 2009, almost back to pre-recession peaks.

In the Jewish/Israel segment of the philanthropic world, overall news is also good. The combination of Jewish wealth and, in the United States at least, relatively little anti-Semitism, enables engaged citizens to use the power of philanthropy to address many issues our community and greater society has faced for decades. The opportunity for philanthropists of all sizes to make significant change is more likely than ever before.

And yet, while charitable giving as an industry is growing, many individual organizations have not rebounded from the 2008 recession; they still struggle to raise the funds to meet the ever growing needs of the populations they serve. When colleagues from around the industry gather, we lament not the lack of creative ways to address societal problems, but the funding to implement them or the shortage of qualified employees. In our industry’s current state, there are simply not enough resources.

From 2003 to 2013, the number of 501c3 organizations increased by over 20% in the United States. The proliferation of similar organizations in Israel has also been rapid. In 2012, Israel had nearly 43,000 registered amutot [the Israeli 501c3 equivalent]; there are nearly 2,000 new ones added each year. With so many organizations competing for the same funding and the same employees, it is no wonder that we all feel the pinch.

To be sure, competition can breed innovation and creativity. It can help move ideas to market faster and encourage out of the box thinking. In the for-profit world, competition also has the added benefit of providing additional choice and often driving down prices. Unfortunately, in the not-for-profit arena, the increase in organizations addressing similar needs has led to duplication in overhead, and competition for a limited pool of funds and employees. As a result, fewer dollars are getting to the end user – the people who need our ‘products’ the most.

In the for-profit world, when too many companies are serving the same industry, the judgment tends to be swift. Particularly when scale leads to profitability, companies merge, are acquired or shut their doors. In the nonprofit world, even when scale can achieve more results, the same organizations will continue to compete for the same resources year in and year out, without ever growing or increasing impact.

The desire to increase impact, grow reach and leverage resources to change Israel’s education system led two organizations, Youth Renewal Fund and Darca Schools, to form the groundbreaking alliance announced mid-summer.

The two organizations met 18 months ago with the intent of piloting a YRF supplemental education program in two schools within the Darca network, a network of schools similar to a charter school network in the United States. As that cooperation evolved, it was clear to the management and boards of both organizations that there was a greater opportunity.

Unlike a traditional merger or alliance, there was not a profit motive driving this “transaction.” However, from the beginning, it was clear that both YRF and Darca shared one common goal – creating the most innovative schools for underserved children in the world’s most innovative country. Once the conversation started, it was easy for all involved to quickly align to maximize available resources. While each organization was governed by a board of founders, there were no egos around the table. Personal agendas – often strong influencers in other not-for-profit organizations – were never part of the discussion, only common causes and a shared mission.

YRF’s business-like approach to philanthropy guided its decision making process. Darca’s desire and ability to change education for all of Israel made it a logical partner. The philanthropists involved in both organizations focused on the needs of the population each set out to help. This new organization has enormous potential and will deeply impact tens of thousands of children every year. With the school year just beginning, this educational venture has already taught everyone an important lesson.

Karen L. Berman is the CEO of YRF Darca. She was formerly the Executive Director of Youth Renewal Fund. For 25 years, YRF programs helped disadvantaged Israeli children discover and harness the power of education as a means to improve quality of life for themselves, their communities and their country. Through its new alliance, YRF Darca supports a network of 23 high schools and 2 learning centers throughout Israel. These schools are known for academic excellence, commitment to high achievement, an innovative approach to education and inspiring leadership.