By Steven Windmueller, Ph.D.

The economic performance of Jewish institutions across the sector provide us with some important insights:

a. “Reputation” plays an important role in the success of an organization to consistently raise funds. Among older constituencies of donors, this factor must be viewed as particularly significant. Legacy institutions play to their long-standing relationship with their key donor pool.

b. “Leadership” must be seen as a critical ingredient. Here, the quality and depth, especially of its professional team, appears to be particularly important in advancing its image. Trust in the performance of an organization is proportional to the level of confidence donors have in the operational integrity of the institution. Of course, the “ideal” scenario involves high profile lay leaders aligned with a talented team of professionals!

c. “Consistency” represents a hidden but essential principle in maintaining the momentum and success of an institution’s fund-raising performance. Donors welcome continuity in connection with the managing of messages and appreciate the pro-active handling of any disruptive internal organizational crisis.

d. “Marketing” is an important ingredient, especially for newer/younger contributors who employ social media to determine choices about their financial charitable priorities. Providing incentives that appeal to potential millennial contributors appears to be an effective strategy in drawing younger, potential supporters. Attracting significant interest has been the introduction of various fund-development tools, such as Crowdsourcing.

Other findings suggest that few charitable institutions have created and employed business plans in managing their fund-development operations. Those organizations that have invoked such a plan are reporting more consistent results, with fewer disruptions and in most cases demonstrate higher growth patterns.

Even with such planning, a small number of groups invested the time to examine their expenses in securing and maintaining individual donations. Even fewer charitable entities have established any long term planning models that take into account such factors as unanticipated expenses, changing social/demographic conditions, shifting donor priorities and preferences, and other variables critical to organizational success over time.

The “leadership crisis” in the Jewish community may represent the major challenge to successful fund-development and the future of Jewish philanthropy. Replacing key and influential lay leaders and identifying future senior and middle-management executives would appear to be primary challenges for many institutions. In some circumstances the “turn-over” rates involving professionals represent a major disruption to organizational continuity.

The data also offers some warning signals in connection with how few organizations have prepared for “crisis-based” fund-raising, where conditions warrant mobilization campaigns to manage a sudden or fundamental change to the status of the Jewish community, individual Jews, and Israel (terrorism, war, security threats, economic challenges etc.). More directly, organizations take minimal time to examine specific “threats” (challenges) that could impact their particular market or sector. The “replacement” of key donors represents a primary issue for many organizations across the board, yet few are effectively planning for such succession scenarios.

Most Jewish organizations have yet to develop a “market research” model in determining fundraising strategies or anticipated changes in their market position.

Nonprofits face increasing competition both from within the Jewish community and from among the growing marketplace of third sector organizations. Few Jewish institutions have systematically developed a strategic plan to deal with this growing competitive environment and how best to position or “brand” themselves to identify their unique characteristics and contributions in this increasingly crowded field.

A significant number of Jewish institutions that own and operate facilities continue to experience rising expenses in connection with the maintenance and upkeep of their buildings. As a means to offset their primary operational costs (staff salaries and physical maintenance expenses), institutions are increasingly seeking to generate revenue by renting unused or under-used portions of their facilities or selling off properties. This phenomenon appears to be occurring across the spectrum of Jewish institutional life. There is some evidence that organizations that at one time owned their national headquarters and/or regional and local facilities are increasingly opting for renting space. Mergers or collaborative arrangements are evident among synagogues but less so with reference to other types of Jewish communal structures. While still in its earliest stages, there exists a growing pattern of cross-institutional cooperation and business realignment within other Jewish sectors.

Among the more accepted forms of changing business practices:

a. Sharing facilities in order to reduce expenses
b. Outsourcing particular business and fundraising activities
c. Merging of certain programs and projects to avoid redundancies and reduce operational expenditures, as well as closing or realigning regional or field operations.
d. Sun setting programs and activities that are seen as “financial losers”

There appears to be some momentum around “new product” development, i.e. where organizations seek to brand a new service, program or campaign. There is a significant realignment with reference to attitudes concerning directed giving and individualized choices, which has prompted some of these current initiatives.

Experimentation is present around such issues as “dues or membership fees.” Fundraising organizations are seeking to introduce alternative campaign models, events and online giving arrangements, frequently emulating Millennial-based “start up” approaches.

Two directions are underway simultaneously as various charities and communal institutions are moving to focus increased attention to their high-end givers, while minimizing their engagement with core member supporters. Alternatively, we find other institutions devoting renewed concentration to their base-donors, by creating alternative ways to both serve and invest in these “historic” supporters. Working on the assumption that such consistent low-end donors have established loyalties, and that many of these individuals may have significant capacity to upgrade their annualized giving or to consider an endowed commitment, this strategy seeks to elevate and promote such options.

As a result of the costs associated with high-end events and programs, various organizations are either downgrading such activities or seeking sponsors to underwrite core expenses in regard to such undertakings. Certain organizations have turned to event planning groups, fundraising companies and other enterprises to operate on their behalf specific phases of their campaign functions and annual activities. Of particular interest, donor “underwriters,” including corporate groups and individuals, are being engaged to support specific events and projects.

Additional evidence suggests that more institutions are seeking support from non-traditional sources. This has involved the purchasing of donor lists, extending honors to high profile non-members, and employing the use of popular venue sites as a way to grow interest and promote visibility.

Increasing attention on the part of both legacy and boutique organizations to target foundation grants has redirected a growing portion of their fund development work. Institutions are earmarking significant resources directed toward promoting endowment giving as a way to underwrite high-profile parts of their core programs.

End Notes:

The Jewish communal network of organizations, synagogues, schools, camps and services continues to experience significant transitions, caused by the changing marketplace, alternative donor options, the rise of new competitors, and growing leadership challenges. Efforts at reframing how organizations are “doing business” are occurring. Yet more often than not, these major structural changes are taking place in response to external pressures and internal operational realities. Planned proactive organizational transitions remain a rare characteristic of the Jewish communal enterprise.

Steven Windmueller Ph. D. on behalf of the Wind Group, Consulting for the Jewish Future. Dr. Windmueller’s collection of articles can be found on his website: www.thewindreport.com.