By Jonathan Mirvis
In recent months, there has been a series of major investments in the research and development of Jewish education. With the Jim Joseph Foundation leading the field, tens of millions of dollars are now being invested in new Jewish teen engagement initiatives, in young leadership development and in educational digital platforms. These welcome investments will hopefully boost the field and create significant educational impact.
These major investments mirror the R&D trends in the commercial world with major support for entrepreneurship and innovation. In their initial stages, the commercial and educational entrepreneurs face similar challenges. In both the commercial and educational realms, there is an initial stage of fundraising with both endeavors bereft of earned income. However, in the long-term, they are radically different. In the commercial realm, successful R&D should lead to financially prosperity while for the educational endeavor success could lead to a financially hazardous future.
When the current round of grants ends, the educational entrepreneur faces an uncertain financial situation. Earned income will probably be limited and philanthropic dollars for financial sustainability may be difficult to raise.
In the realm of general nonprofits, it is usually the Government or Government- supported agencies who provide the long-term sustainability. Thus in Israel the secular pre-army Mechinot programs that have mushroomed over the past two decades are now sustaining themselves following their initial philanthropic investments. However, in the US where there is no state support, educational entrepreneurs will continuously need to “chase dollars.” Ideally, their efforts should be channeled towards the recruitment of students and the growth of their programs; regretfully fundraising will perpetually take precedence.
While we can only build on partial success resulting from our investments, we need to ensure our successes are financially sustainable. Thus the need for a “Foundation for the Jewish Future” that will dedicate its support to sustaining successful educational
organizations and endeavors.
The Foundation for the Jewish Future
The foundation should be established in order to support successful Jewish educational programs on a “pay for success” basis. When established, high impact programs will receive ongoing financial support, encouraging them to increase their enrollments and extend their educational impact.
Sources of Income for the Foundation
It is crucial that funding for this foundation should not be at the expense of current philanthropic funding. New untapped sources should be sought with long-term commitments. Following are suggestions for four potential sources, which I discussed in my recent book:
a. The Government of Israel.
In light of its investment in Taglit-Birthright Israel and Masa, the Government of Israel has committed to investing in Jewish education in the Diaspora. In a Cabinet decision taken in June 2014, ILS 187 million (approximately $47 million) was allocated for this purpose. Investing this sum in sustaining quality Jewish education would certainly be an effective use of these funds.
b. The Jewish National Fund.
The Jewish National Fund (JNF) has become a major funder of community education projects. In its financial report for 2014, the JNF reported an investment of ILS 81 million (approximately $20 million) in education. Given Diaspora support for this important agency, it would not be unreasonable for a sizable amount of funding to be invested in sustaining quality Jewish education in the Diaspora.
In addition to the two possible sources mentioned above, there are two relatively new initiatives, which have thus far generated limited funds. However, both sources have huge potential given their access to “blue ocean” capital.
c. Equity from startups.
In 2002 Yedid Kaufman, an Israeli investor, founded Tmura, a nonprofit organization that has thus far generated over $15 million for education and social welfare projects. Kaufman believed that successful commercial startups should make a financial contribution to society, and he devised a creative mechanism for achieving this goal.
In their first stages, startups sell equity in order to raise capital. At this early stage, Tmura invites entrepreneurs to donate 1 percent of their equity to the organization, which at the time of the donation is practically worthless yet potentially could be worth a substantive amount if the startup becomes successful.
Tmura’s successes include $1.5 million they received for their equity in Waze, which was sold to Google in 2013 for $1.03 billion. To date 523 companies have donated equity to Tmura, and thus the organization’s income should grow dramatically in the future.
Tmura’s model is highly replicable across the globe and has a huge potential given the high number of Jewish entrepreneurs who are in the process of developing startups. If entrepreneurial graduates of Taglit-Birthright Israel could commit themselves to pledge 1 percent of their future equity to quality Jewish education, this could be an important source of future income.
d. Social impact bonds.
Social impact bonds (SIBs) have become a major vehicle for raising funds from the private sector to ensure the sustainability of projects with measurable impact in the nonprofit sector. Their global champion is Sir Ronald Cohen, the British Jewish financier who pioneered the development of Social Finance UK in 2010, Social Finance US in 2011 and Social Finance Israel in 2013. Social Impact Bonds and their potential application to Jewish education, were explained in detail in a recent post in eJewish Philanthropy
The establishment of this foundation should be a high priority. High impact Jewish education is increasingly becoming our insurance policy for our Jewish future and if we are unable to provide long-term sustainability, the “profits” from our current educational investments will be jeopardized.
Dr Jonathan Mirvis is a Senior Lecturer at The Hebrew University’s Seymour Fox School of Education’s Melton Centre for Jewish Education. His specializes in Social Entrepreneurship, lecturing to MBA, Non-Profit Management and Education graduate students.
He is the author of It’s Our Challenge: A Social Entrepreneurship Approach to Jewish Education, which will be offered as a free kindle download from Sunday, November 12, 12am PST through Monday November 13, 1159pm PST