Turning Dusk Into Dawn

by Ariel Beery and Aharon Horwitz

Once a year the Jewish world experiences an exceptional gathering of movers and shakers – and this year it is coming to Jerusalem. The General Assembly of the United Jewish Communities and Federations of North America, to be held November 16-19, will attract participants from across the spectrum of Jewish communal leadership, and, most significantly, those who invest in and foster the many activities and ventures identified with the Jewish community.

It is only natural, then, that this year’s financial crisis has got most if not all of these participants – resource providers and those who depend on them – in a bit of a haze. With uncertainty clouding the philanthropic skies, discussions in this GA’s halls are more likely to be about sustaining what exists than about seeking out new opportunities for greater growth and impact. For those whose projects lack solid financial backing, it seems closer to dusk than dawn.

But it need not be. In fact, this year’s economic crisis could provide exactly the paradigm-shifting opportunity the social sector has been waiting for. This is because, thanks to the effect of the digital age, impact costs less in absolute dollars today than it did during the last recession. Investing resources in new ideas can pay off in unimaginable ways – and so instead of rolling back financing, the Jewish community, by transforming its investment strategy, is in a position to accomplish much more than ever before. All that’s needed is an appreciation of the new opportunities that exist.

As best-selling management author Jim Collins pointed out in a follow-up monograph to his book “Good to Great,” non-profits have always needed more than just financial capital to keep the lights on: “The critical question is not ‘How much money do we make?’ but ‘How can we develop a sustainable resource engine to deliver superior performance relative to our mission?'” Resources, he notes, are Time (the time people invest in a project), Money (which pays for programming) and Brand (which convinces others that time and money will be well spent).

With digital technologies becoming increasingly sophisticated, and our actions freed from many of the restrictions of time and space, as we are able to communicate with anyone, anywhere, at any hour, the elements of the equation at the core of nonprofit success have shifted. In particular, the same technological conditions that have proved enabling for hyper-bootstrapped start-ups, in the business sector, have also enabled nonprofits to do much more in terms of building their brand for much less money. In addition, the material expenses of programming have gone down – making it easier to package the content of a nonprofit’s mission.

For example, through its online platform, the Obama presidential campaign was able to leverage every two paid field organizers to manage 50 volunteers – and used that same platform to collect more money than was ever raised for a presidential race, with a fraction of the effort. With costs of programming and communicating dropping, time – the time and attention people invest in a project – has become the currency of most value. And therefore it is the ability to capture attention and muster time – to recruit and manage volunteers through strategically trained staff – that in many cases will determine whether an effort will have an impact on the world or not.

This shift in the relative weight of resources should change the rules of the game for those who give as well. Digital-age philanthropic investments in nonprofits should focus on giving them the ability to deploy more hours in the field, paradoxically increasing the staff part of “overhead” that so often is targeted for cuts.

It used to be that a smart funder would seek to fund programs, not salary overhead, out of the understanding that nonprofits often, as Steven Weisz, a young Toronto philanthropist told us, “somehow find the least efficient path in any given scenario.” But with the new tools and resources available, each well-trained professional can move hundreds of others toward the nonprofit’s mission. On the other hand, the cost of attracting excellence away from the for-profit sector has gone up. Money, therefore, should be invested in ways that enable organizations to build a staff that knows how to leverage digitally enhanced resources to recruit and inspire volunteers, generating a formula for building sustainable funding and programming.

Since human capital is now the key for nonprofits, the time and knowledge invested by philanthropists matter almost as much as the financial capital they invest. As most high-tech start-ups quickly learn, “sources of capital should bring more between their ears than between their checkbook covers,” as Ruth Salzman, a former banker turned foundation executive, notes. These philanthropists, who have evaluated dozens, if not hundreds, of proposed ventures over their careers, and who participate in numerous communal functions where they are introduced to fellow investors, have a wealth of knowledge that most nonprofits could only dream of attaining – and which, given the opportunity, they could successfully deploy for the bettering of their venture.

Unlocking the store of knowledge currently hidden in the philanthropic class will take concentrated work, but it is possible, and necessary, given the constriction of financial capital markets. Thinking in this frame – investing in human resources on both sides of the philanthropic equation – is the challenge before us in this new age. And to think: this shift can all begin right here, in Jerusalem, this week.

Ariel Beery and Aharon Horwitz are the founders and co-directors of the PresenTense Group, which fosters innovation by educating individuals and organizations on digital-age tools and strategies to launch social ventures.