Three More “i” Words: Innovation in Isolation is Irrelevant
by Joshua Avedon
A recent article on this site (“Innovation Isn’t Dead, It’s Working” – February 5, 2013) raised concerns that last year’s merger of Hazon with the Isabella Freedman Jewish Retreat Center has sparked casual conversations about the end of the innovation era. The authors of that post, my colleagues Lisa Lepson and Will Schneider, correctly argue that there is continuing evidence that Jewish innovation is going strong, and, more importantly, beginning to make a real impact on the broader Jewish world.
Like my friends from the Joshua Venture Group and Slingshot, I also believe that funding Jewish innovation should not be a zero sum game in which the community is forced to choose between supporting startups or more mature organizations. They articulated what worries them about the current moment – as a fellow traveler in the same space, let me share what worries me. I am less concerned that an emerging awareness of the need to fund second-stage organizations might cause community focus to “shift completely away from support of early-stage entrepreneurial initiatives.” For that to be happen, first there would actually need to be a demonstrable focus on funding new Jewish initiatives, and then some evidence that money was shifting away from it. I’m much more concerned about the total dollars available to Jewish innovation in all shapes and sizes.
While it may get a good deal of ink and airtime, the data suggests that Jewish innovation, of both the startup and post-startup varieties, remains underfunded in proportion to both its reach and its growth. The 2010 Survey of New Jewish Initiatives in North America (published as The Jewish Innovation Economy by Jumpstart with The Natan Fund and The Samuel Bronfman Foundation) found that Jewish startups engaged more than 9% of the North American Jewish population with less than 2% of the roughly $10 billion spent annually in the Jewish nonprofit sector. The average year-on-year growth rate in the number of Jewish startups between 2002 and 2010 was 29%. The amount of funding available to them does not seem to be keeping pace with that trajectory.
In 2011, the Bikkurim report From First Fruits to Abundant Harvest issued a clarion call for second stage funding, based on data that showed a sector-wide recognition of the need, and an increasing number of deserving organizations that are ready for scaling investment. Over a third of respondents to Bikkurim’s survey indicated that funding for both startups and post-startups was inadequate. While there has been a growing interest in the creation of mezzanine funds, The Samuel Bronfman Foundation’s Second Stage Fund is the first that I know of to have made grants with that explicit focus. The Bikkurim report also highlighted the persistence of a philanthropic preference for newness, and that funding often falls off for projects once they’ve reached that awkward adolescent stage of growth, just when they need it most. This is especially unfortunate since reaching that stage is usually a sign of market relevance and programmatic success.
Of course, innovation isn’t limited to newer organizations. Support for innovation within larger, more established Jewish organizations seems to have increased over the past few years. This is evidenced through collaborations such as the PresenTense Community Entrepreneur Partnership, through targeted funding/microgrant programs, and via new intrapreneurial efforts. The Slingshot Guide is a good indicator for this. The ’12-’13 publication includes more projects operating under the auspices of established organizations than ever before.
Although it is more difficult to quantify this type of innovation than it is to survey startups and autonomous initiatives (where a sample can be easily defined by founding date and organizational structure), there are promising signs that innovation is making inroads where it is needed most.
The Jewish innovation boom has happened in spite of limited monetary resources, relying mostly on the ingenuity, skill, and social capital of its leaders. Given that passion seems to fuel new Jewish initiatives more than money, there is no reason to think that innovation is dead, or even slowing down. But the nature of innovation is changing, and the organizational forms it takes must evolve in the new epoch to meet the needs of the community. When a promising new idea comes along, the question is not only whether it will get traction in the market, but also whether it needs to be an independent entity, or might better be pursued in partnership with, or even as a project within, an existing organization.
Innovation in isolation is irrelevant. It’s the transformative potential of Jewish innovation to shape and define the Jewish community in the 21st century that gives innovation its resonance and power. No one I know who works in and supports Jewish innovation is saying that innovation is on its way out. But most of us believe that a maturing marketplace requires a more strategic approach to funding as well as an increased focus on collaboration and consolidation. My colleagues and I agree that innovation is working, precisely because the established community is increasingly adopting it as a priority. Once we have succeeded at making innovation a central principle of the entire system, I’m optimistic that the community will find the resources to fund it at all stages – and in all forms – accordingly.
Joshua Avedon is the COO of Jumpstart.