Proposing a Marketplace Model

By Andrew Fretwell

My last article discussed a fundamental defect in the current Jewish philanthropic model: in an effort to lower the hurdle of participation for community programs, we seek out donors to underwrite our programs, so we can give away or highly subsidize our services. This translates into disproportionate control over our community’s offerings by donors, who do not represent the community at large. So how do we lower the participation hurdle without conceding so much power to major funders and mega-donors? We create an open marketplace of Jewish offerings to which Jewish adults have access to choice and drive demand. Here is how:

We Ask Funders to Support Choice

Let’s use engaging Millennials as our example. Instead of funding large-scale, free initiatives (such as Birthright Israel trips, which costs $3,000 per participant), funder generosity could provide every Jewish adult with a voucher worth “x” amount of dollars upon turning 18 to spend as s/he sees fit on Jewish community experiences before turning 27. In essence it utilizes Masa Israel’s approach but on a larger scale – it would be privately funded and managed, with larger vouchers, and more expansive offerings: Israel trips, Hillel programs, JCC or synagogue memberships, and “cash out” opportunities via salary bonuses for internships and jobs with Jewish organizations. Federations and foundations can support particular geographical regions or demographics (e.g. Jews from the Former Soviet Union, Mizrahi Jews, etc.) by providing additional funds for those populations’ vouchers, increasing their opportunity and access without telling them how they should participate in Jewish life.

Funders who support specific issues (e.g. Israel education, Social Justice, Hebrew culture, etc.) can do so by providing seed money for new programs until they are financially sustainable, similar to angel investors in the private sector, which sits at the heart of American innovation. For generations, businesses and entire industries have blossomed from investors who equipped inspired professionals with the start-up funds to earn their place in the market. Let us reappropriate that example to catalyze innovation and constructive disruption in our own field. Many funders already do and for those who do not, the shift is intuitive if they are more interested in empowering organizations than controlling them.

We Create an Open and Affordable Marketplace

To ensure a high-quality, seamless user experience, we also build the Jewish community’s Yelp: an inclusive and crowd-driven marketplace for community programs (i.e. not charitable services, fundraising organizations, or political advocacy groups). Market wide standards for what stances or policies go beyond the pale will be set by a standing group that includes the diverse voices of today’s American Jewry, especially groups that haven’t traditionally had a seat at the table: young adults, Jews of color, LGBTQ Jews, etc. This has been attempted in smaller forms and we can glean lessons from GrapeVine’s work.

To ensure fair competition, financial sustainability is another requirement; program and membership fees must ultimately support participating organizations’ basic operational budget. That means no more giving away services. No more free Israel trips. Belonging to a Hillel means paying a membership due and/or paying more for individual programs, like any other private club or society. This allows organizations to focus on their audience while vouchers keep them from pricing themselves out of the market.

We Reap Benefits Across the Board

This model lowers the barrier for participation across our community and allows young Jewish adults to utilize this gift within the community as they best see fit. The benefits are significant for Jewish nonprofits. With an established market that operates on a pay-for-service basis, organizations will be liberated from serving funders at the expense of their audience. The entrepreneurs in our field will be rewarded for agility and anticipating demand, not just reacting to demand that funders wish for. And if the model works for a specific age group, like young adults and college students, it can be easily extended to other groups like teens and young families.

The greatest benefit is to our community as a whole. It would increase young adults’ involvement, improve program quality, and introduce a desperately needed change of culture. Jewish Millennials have been cultivated to view the Jewish community as an ongoing contest for who can give away the most to them. If not addressed, this problem will haunt us down the road. The marketplace model lowers the bar for participation while making clear that these programs have value. And with the emphasis on serving their audience, we will unleash the creative potential of our communal professionals, which is frequently stymied in the name of pleasing donors.

We Confront Pitfalls and Scary Truths

This model has its own challenges. First, it takes only a handful of organizations giving away or highly subsidizing their services to create a race to the bottom of who can give the most away. Second, this new ecosystem would require a dramatic rethinking of organizational strategies and reprioritizing executives’ skills, i.e. fewer fundraisers and less money for fundraising. Additionally, a competitive marketplace means some organizations will fold and while that may be healthy in the long run, it will still sting sharply. But those potential pitfalls pale in comparison to the greatest challenge we face. Replacing free programs with an affordable market undercuts the power of the mega-donors who are underwriting free programs, and spreads it throughout the community. This transfers power from a small group of ultra-wealthy individuals to the larger community and that makes it radical. And while this could answer serious problems plaguing our community, our greatest challenge may not be an inability to identify solutions, but a flaccid will towards placing the interests of many ahead of the few.

If that is the case, waiting for this sea change may be like waiting for the wolf to live with the lamb. Therefore, my next post will explore how executives can begin incrementally breaking the financial dependency cycle in which many organizations currently find themselves.

Andrew Fretwell has worked as an educator and community activator for Young Judaea and the Birthright Israel Foundation between 2007 and 2016, and earned his MBA from CUNY Baruch College in 2015.