The Role of the Mega-Organization in the Era of Micro-Philanthropy

This essay is from The Peoplehood Papers, volume 7 – Reinvigorating Jewish Peoplehood: The Philanthropic Perspective; published by the Center for Jewish Peoplehood Education.

by Steve Schwager

The term “Jewish Peoplehood” surfaced in recent years as a new way to describe the biblical statement Kol Yisroel Arevim Zeh Lazeh – “All Jews are responsible one for the other.” It signifies the fact that we as a people are united – across the boundaries of language, culture, and residence.

I find this latest interpretation of the biblical text an appealing term: it describes anew the maxim that was the foundation of The American Jewish Joint Distribution Committee (JDC) almost 100 years ago.

Known then as “mutual Jewish responsibility,” it was the driving force behind the mobilization of Jews in North America to help their fellow Jews in Europe and in Ottoman-ruled Palestine. The year 1914, therefore, was pivotal for North American Jews:  they were no longer supporting their own local needs exclusively, but were reaching out to support Jewish needs overseas. It meant the Jews of North America accepted a wide global responsibility to meet the needs of brethren they never met and would most likely never know.

Navigating a turbulent century since 1914, JDC continued its rescue, relief and renewal operations through two major World Wars, a dozen or so regional wars, one major economic Depression, many recessions, the collapse of empires, the emerging of new national sovereignties, and indeed revolutionary ideologies that have changed the course of world history. JDC, as the 911 of the Jewish People, evolved and adapted to the ever-changing needs of Jewish Peoplehood, often with very short notice.

As we approach JDC’s centennial year, we have made a series of strategic adjustments. These adjustments are essentially about one thing: adapting to the changing environment of Jewish philanthropy. We clearly see that new trends have replaced much of the old familiar rules that governed the relationship of donors and their recipient agencies. And this change is not driven from within – but by monumental external shifts in how people communicate, identify, and organize. The world is flatter, faster, and more integrated than ever before. Individuals have more power to achieve, to be independent, and to create change. An idea can reach millions in an instant. It is within this dynamic context that we must understand the future of Jewish philanthropy.

Permit me to mention a few of those bold trends, familiar to all of us operating in this not-for-profit world:

  • A younger generation of Jewish donors relate to their Jewish identity and affiliation as just one on a list of many identities they carry – choice being a defining characteristic of their demographic.
  • These donors prefer to give a designated gift, earmarked clearly for a specific program, where they personally can follow their money and its impact.
  • These donors tend to prefer cause-based giving, rather than organizational loyalty.
  • These donors expect transparency, accountability, efficiency, and measurable impact from the organizations they support.

All of these trends can be described using one word: micro-philanthropy. Or: A boutique is better than a department store. A cause is better than an organization.

In this new environment, some large agencies have been feeling the squeeze of needing to make change at a seemingly lightening-speed pace. Their space is suddenly crowded by a garden variety of smaller, often one-issue charities sprouting across the philanthropic map. Dynamic and innovative individuals have launched their own organizations, and a spirit of social entrepreneurship has spawned countless new entities. And it is not only the exponential number of charities that are changing the map: it is, in a Darwinist sense, the struggle for survival of those who can adapt versus those that cling to yesterday’s reality. It is difficult not to feel nostalgic for some agencies that defined the Jewish charity world for many decades and held a unique place in our communal lives. But at the dizzying pace of change in today’s Jewish marketplace, it is adapt – or lose your place in the market.

So does this mark the end of the era of large agencies? Is “large” automatically a dinosaur?

The answer, in my opinion, is No. This is not the end to large agencies – at least not necessarily. If one can change, and change fast enough, there is much to offer the world.

I can speak only from JDC’s own experience.

Years ago, JDC anticipated the shifting winds, rather than deplore the changes. We adopted new required standards and intensified our level of accountability and reporting. We built a sophisticated fundraising apparatus that simultaneously supports our longstanding partners, like the Jewish Federations of North America, and individualized approaches to new non-Federation donors. We went further by reimagining our Marketing and Communications to make leaps, not steps, in speaking to the people who care about our cause.

Of note, we also launched our first effort in decades to engage young adults with our work. This new initiative was first designed and implemented, and is led, by a team of young professionals and young lay leaders. We have supported the fundamental belief that this generation knows best for themselves what they are looking for in their organizational affiliations. JDC has embraced the operating spirit of start-ups and social entrepreneurs, borrowing from the trends around us, creating the space for intra-preneurs.

Since launching this effort in 2008, we have gone from not even having a strategy for young adult engagement to now having many thousands of young adults connect with JDC through learning networks, international Jewish service experiences, and uniquely crafted leadership opportunities.

We discovered, while doing so, that a large agency can still be attractive to new younger donors. We have gained a better understanding of what attracts this rising generation, and those coming, to a large and established organization like JDC. I can state with confidence that JDC presents a compelling proposition to a new generation of philanthropists.

Here are some of the reasons why:

  • A large agency often correlates with having a large purpose, addressing large challenges, and leaving a large footprint in repairing the world (tikkun olam).
  • A large agency can offer a custom tailored program to fit a donor’s specific interest, and many times over.
  • A large agency can leverage other partners and maximize the gift dollars at even greater levels of impact.
  • A large agency can have lower overhead per program, since there are economies of scale.
  • A large agency can have the capacity to work simultaneously with many donors, individualized, one on one.
  • A large agency is more likely to maintain Western standard transparency, accountability and efficiency and can win legal assurance (i.e. State Attorney General) and public ratings (i.e. BBB, Charity Navigator).

Therefore, one needs to be careful not to rush to the conclusion that large agencies are doomed to be extinct in this new environment. When adapting and updating their perspective and conduct, large agencies can offer the donor community a much better deal for its dollars. While the small, one-issue charities are a welcome addition to the philanthropic environment, I strongly believe that the role of large agencies is more significant than ever.

Steve Schwager is the Executive Vice President and CEO the American Jewish Joint Distribution Committee.