Three Trends in Jewish Philanthropy

philanthropyBy Simone Friedman

In my role managing Emanuel J Friedman Philanthropies (EJFP), I am very fortunate to have the opportunity to be in regular contact with hundreds of people involved in Jewish philanthropic life across the United States. The individuals with whom I speak include philanthropists donating millions of dollars per year to charitable causes; trustees of foundations charged with stewarding the wealth of their families or the wealth of their foundations’ original funders; professional foundation staff with deep expertise in philanthropic strategy and Jewish communal life; leaders of Jewish organizations; Jewish social entrepreneurs who create new approaches for expressing and participating in Jewish life; and Jewish young adults who are involved with many of the programs and projects we fund. Over the past few months, I have begun to notice the following trends take shape:

1.  There is growing interest by Jewish foundations in making program-related investments (PRIs). PRIs are financial investments that foundations make that have a purpose related to the overall mission of the organization. As a type of impact investment, PRIs may or may not return capital invested, but they could count toward the requirement that foundations distribute a minimum of 5% of assets each year. As a result of this, a foundation making a PRI has the opportunity to potentially “recoup” some of its money to then later reinvest in other programs, instead of making traditional grants in which once the money is distributed, it is gone.  Potential PRIs in the Jewish community might involve loans to Jewish schools or other institutions with recurring revenue streams, purchase of real estate that could be leased to Jewish organizations, or equity investments in technology companies that develop software to help with Jewish education.

2. Jewish programs that are successful in one city are expanding to other cities around the country, with national, multi-regional, and local funders working in collaboration. I am involved in three initiatives right now that fit this description, one of which involves the opening of 11+ new Moishe Houses in different cities across the United States. In the Moishe House expansion,  EJFP is playing the role of a bridge funder, filling the gap between the national funding that provides the backbone infrastructure support for the organization and the funding from local donors around the country, much of which is raised via partnerships with locally-focused foundations and Jewish Federations (see Figure 1). Through our expansion grant, we are offering a guarantee that a new house will have the funds to open prior to the local community establishing a base of support. This is a critical factor for expansion, because many local donors prefer to visit a house before they feel comfortable donating. It sometimes can be hard to raise money for the expansion of a program to a new city when the expansion is only a concept and not yet a reality.

Figure 1 for Friedman eJP article - February 16

3. Many major Jewish donors who are less traditionally-observant are reframing all of the philanthropy they do as inspired by Jewish values, and therefore as expressions of Jewish giving.  For example, many Jewish philanthropists with whom I speak are increasingly viewing their giving to hospitals and medical research as an embodiment of the Jewish principle of Pikuach Nefesh, which values the saving of lives above all else; I have also heard that placing a priority on the funding of local and national civic institutions could be viewed as a philanthropic manifestation of the Jewish principle of dina d’malchuta dina, which literally means “the law of the land is the law.” On a personal level, I view our family’s support for animal welfare and wildlife conservation as an embodiment of the biblical mandate of Tza’ar Ba’alei Chayim, which requires that Jews prevent animals from suffering. This changing definition of Jewish philanthropy is borne out by the Connected to Give study which Jumpstart published last year (EJFP was part of the consortium of funders who provided support for this project). The study found that the more an individual is Jewishly-engaged, the greater the likelihood that the individual will give to all causes, including those that traditionally might not have been considered “Jewish causes.” However, as Connected to Give makes clear, many donors give for Jewish reasons across a wide range of purposes.

I see several implications of these trends. Regarding the growing interest in PRIs, Jewish organizations undergoing capital campaigns, for example, might want to consider offering philanthropic partners the option of investing in mini-bonds (i.e. private bond issues of a few million dollars or less) that yield a specified rate of interest. Although this may not be as desirable to the organization as receiving a traditional donation, offering mini-bonds would most likely reduce an organization’s borrowing costs compared to what the organization would have to pay for traditional bank financing, since Jewish foundations might be willing to accept a lower-than-market rate of return. More importantly, if a foundation becomes the organization’s creditor, then the foundation may be more likely to be committed to the future success of the organization, and therefore provide traditional philanthropic support for the organization’s programming as well.

The main implication of the expansion of Jewish programs via funder collaboration is that locally-based Jewish organizations looking to expand to other cities would be wise to line up an individual donor or a foundation who will be able to provide the bridge funding that is needed to confidently enter a new city prior to securing local support. This funder might be a committed existing donor who is willing to take a chance on the organization, or the funder could be a foundation or philanthropic family that has interests in multiple cities and is therefore looking at the Jewish landscape on a multi-regional level.

The changing definition of Jewish giving is the trend that has the potential to be the most disruptive. Federations and other entities pooling and distributing Jewish resources may want to consider following the lead of the new Amplifier giving circle movement and expand their grantmaking criteria to include those causes which their donors/members consider Jewishly-inspired. By adopting a more inclusive, non-prescriptive approach, Jewish organizations could help donors who are not giving to traditional Jewish causes come back into the fold and engage with the institutional Jewish community. This in turn has the counterintuitive potential to increase the number of people who support Jewish communal life overall.

Simone Friedman is the Executive Director of Washington, D.C.-based Emanuel J Friedman Philanthropies. The views expressed herein are her own.