By Ahava Zarembski

The world of social change is in transition. Globally, national governments are no longer fulfilling the role of social change facilitator. In its stead, local and municipal governments are becoming increasingly powerful and effective. We see that in the response to Hurricane Katrina in New Orleans as well as with the forest fires in California in the last few years. In short, this transition is the definition of glocalization’ – the more globalized we become, the more localized we become.

Within this new reality, the increasing force of local businesses and the third sector is front and center. Foreign Affairs recently published an article on “Global Corporate Citizenship,” which argues that “companies must not only be engaged with stakeholders but be stakeholders themselves alongside governments and civil society.” Bill Gates, in his “Creative Capitalism ” article in Time Magazine August 11, 2008, calls for businesses to re-examine ways they can profit while simultaneously assisting the underprivileged and developing nations. “Government and non-profit groups have an irreplaceable role in helping [the underprivileged and 3rd world countries], but it will take too long if they try and do it alone. It is mainly corporations that have the skills to make the technological innovations work for the poor.”

This is what we call at Yesod Masad the “triangle of influence” – today governments, businesses, and the 3rd sector are working together to affect social change. The synergy between these forces is powerful enough to tackle some of the most looming problems in education, hunger, poverty, disease, and the environment, domestically and globally.

Jewish communities worldwide are all facing common Jewish issues: Jewish identity, Jewish education, demographics, lack of leadership, and anti-Semitism/anti-Israelism/fundamentalist Islam.

Examining and addressing these issues through the prism of the triangle of influence can not only increase resources, but our effectiveness as well.

The influence of each player within the triangle of influence is increasing in Israel.

Municipalities : With a void from the national government’s involvement in social issues, municipalities are becoming increasingly involved, empowered and effective. The role of municipalities’ social change was evident in the Second Lebanon War. Philanthropists and Federations need to partner with strong/solid municipalities and cultivate these relationships personally. Partnership 2000, which looks to bring Federations together with a sister city in Israel for social change, is a good outlet. Yet most philanthropic investments in Israel, whether geographical, sectoral, or issue based, should involve municipalities.

Individual Israeli Wealth and Israeli Businesses : Individual wealth is increasing, as is the success, wealth and influence of businesses. Businesses in Israel are becoming increasingly involved in social change, as are businessmen and women as they become increasingly successful. Take for example the transformation of Bat Yam, now considered the city of excellence. Ten years ago Bat Yam was one of the poorest, most neglected cities in Israel, with its population base deemed very low socio-economically. Aaron Castro, founder and creator of the Castro clothing store, who made aliyah from Saloniki in 1933 and opened his first tailor shop in Tel Aviv in the early 1950s (with the Bat Yam store opening in the early 1990’s), has been loyal to Bat Yam throughout the growth of Castro, with its headquarters in the city throughout its development. Less than a decade ago, Aaron Castro went to the mayor and demanded the city be transformed through massive investment in education. He put his own and his business’s money where his mouth was, in the form of philanthropic investment in education in Bat Yam. And he demanded that the municipality leverage with him. Today Bat Yam has been transformed into Israel’s “City of Excellence” and is growing in its impact.

Business models : Business’ involvement in social change in Israel also means the introduction of new philanthropic models of investment, such as the growth of community development venture capital funds (VC). VCs are investing in underprivileged areas, whether through small business development encouraging gentrification, or through technologies generated by the areas (such as green tech in the Negev). The lesson: Socially responsible investing (SRI) can bring a return on the dollar in terms of profit – strategic philanthropic investments means business concepts and often models are pulled in to the investment.

3rd sector: Non-profits organized to tackle social issues are a major force. So too are individual philanthropists. Due to these changes, new organizations and forums have been created such as:

• Sheatufim: Established in 2006, it brings together Israeli businesses and the 3rd sector for social change. Its first conference was held in June 2008, and it received much attention including a closing speech by Prime Minister Ehud Olmert.
• The Jewish Funders Network: The first conference was held in 2008, and dealt with Jewish issues, bringing together Israeli philanthropists with international Jewish philanthropists. The network’s Israel office is slated to open in 2008/9.
• Center for Philanthropy – Hebrew University of Jerusalem: Opened in 2007, with a PhD student examining the role of philanthropists influencing policy, such as the Gaydamak phenomenon and the Knesset’s Gaydamak law.

Reverse philanthropy is now flowing from Israel to the Diaspora to address global Jewish issues occurring abroad. In the end, the wellbeing of the Diaspora has an impact on the strength of the State of Israel.

Yesod Masad ’s raison d’etre is to enable social change in the Jewish world via the triangle of influence. As strategic advisors to all three elements, we see first- hand that the most effective change occurs when all three elements work together.

For the readership of this blog, whether you are the head of a non-profit, a grass roots activist, or come from the philanthropic side of the 3rd sector, Federations, or foundations – know that your power can be reinforced and increased many times over. Nonprofits should look for partnering with the business sector and even consider working THROUGH the business sector. Projects can be sculpted to involve business departments/concepts/and players.

Philanthropists should understand that there is a difference between tzedaka and philanthropic investment. The former does not consider strategic value, return on the dollar, and impact. The latter does. Consider the new kinds of models which will allow you to invest, to see your money returned both socially and financially, and to make your philanthropic dollar go further. SRIs – concepts and players – can allow us to tackle the biggest of problems and to multiply our reach and effectiveness.

Ahava Zarembski is Founder and President of The Yesod Masad Initiative, a strategic consulting group on Jewish communities in Israel and around the world.

For more information please contact yesodcenter@gmail.com.

This post was originally published on the amuta 2.0 blog.