Uncomfortable Truths: Our Fundamentally Broken Model

Our institutions reflect our funders, not our community.

By Andrew Fretwell

For the last decade I have been honored to call myself and work with Jewish nonprofit professionals. My colleagues embody passion, vision, imagination, creativity, and intelligence, and my gratitude to have learned from them is endless. We carry with us the kind of determination and optimism that changes the world. But let’s face it, we never really had a chance. We found ourselves in a rigged system that reproduces failures and cultivates stagnation. We wanted to be professional Herzls, but too many were turned into professional Don Quixotes. Our model was built broken and the true reasons why are deeply uncomfortable.

We strive to offer a service: belonging to a community that provides connections, history, rituals, beliefs, and meaning. Like any functional industry, we have an audience, a value-add, and businesses to deliver it to our audience. Normally a business’s first step is to hypothesize a value proposition: “People will pay $9.99 a month to stream television shows and movies,” or, “our customers would pay an additional $1 per pound for organic fruit.” The following step is to find and convince investors that their value proposition will produce more revenue than costs. But Jewish community executives often reverse these two steps due to a fatalistic assumption that our services are inherently not attractive enough to meet their costs.

The resulting strategy aims value propositions at investors (donors), instead of customers. “I think someone would donate money to us to….” Consequently donors, not customers, are truly in control. Instead of financial sustainability, donors use other metrics, some of which are solid (“we feed ten thousand families every year”), but many of which are abstract and easily manipulated (“our teens feel connected to Israel”). The softer the metrics, the more an organization’s focus can drift from its mission to placating donors. The further that drift carries the organization, the more likely they are to replace serving the Jewish community with using the Jewish community as an instrument to stroke their donors’ ego. The effects are widespread.

To understand its ubiquity, follow the money; salaries reliably indicate an industry’s core competencies. Our industry pays its top dollars to fundraisers and evaluators while Jewish literacy, Israel, and education experts earn secondary salaries. An uncomfortable truth is that our core competency has become selling manufactured stories to donors built on convoluted measurements. It is the difference between life and death, keeping otherwise failed businesses limping around like zombies.

Allowing failed businesses to die is instructive. As Thomas Edison replied when asked about his unsuccessful attempts at the light bulb, “I just found 10,000 ways that won’t work.” Markets are where we learn our audience. Jacqueline Novogratz, the CEO of Acumen, explains that, “philanthropy alone lacks the feedback mechanisms of markets, which are the best listening devices we have.” Giving away our services deafens us, perpetuating mediocrity and suffocating innovation.

How did we sew systemic dysfunction? Jewish communities generally lean towards centralization, and we solidified that tendency through the Federation system: one big tithings pot doled out by committees who supposedly represent us, but in fact mostly represent the wealthiest among us. This made the wealthy few who provided subsidizes the decision makers instead of the multitudes who utilized the subsidies.

The 21st century retrofitted that mentality with a sexier “give-away model,” with Birthright Israel being the largest and loudest example. I myself happily staffed a Birthright trip, worked for the Birthright Israel Foundation, and had some of my best professional experiences there to date. But one does not need to work for Birthright to hear the ebullient cries about sending 100,000 young Jews to Israel for free. But the magnitude of Birthright’s scale is matched by its meekness in obfuscating the question, “How valuable is this?” Since most young Jewish adults would accept both a bagel and a 10-day Israel trip for free, how does attending a Birthright trip demonstrate more value than a bagel?

Perhaps Birthright’s value isn’t really aimed towards its participants. They are irrelevant to the financial model since they pay nothing, and measuring the trip’s impact on them has become an art of turning heart-warming testimonials and shakily measured attitudinal changes into Rorschach tests. But if enough funders like what they see in the inkblots, then the business model is: “Our donors will pay us to send young Jews to Israel for free,” and Birthright’s true audience is then its donors, not young Jewish adults. In this respect, Birthright is hardly alone. More and more organizations subscribe to the “give away model” and collectively they are giving away control of our community to its 1%.

And this is the most uncomfortable of all truths to confront: the small group of mega-donors who dictate our priorities don’t reflect our community. To see the disconnect, look no further than the number of Jewish nonprofit funders who gave money to #MakeAmericaGreatAgain versus the overwhelming majority of non-Orthodox American Jews who voted #withher. Consequently, Jewish federations are predictably and humiliatingly feeble in the face of the Trump administration’s anti-Semitism, putting on full display this defect that grows with increasing income inequality: our institutions reflect our funders, not our community. Billionaires who altruistically give money deserve praise, but altruism is not what our system encourages. Instead it converts generosity into power and surrenders control over our priorities to oil execs, alcohol tycoons, hedge fund managers, casino magnates, and trustfund babies instead of middle class parents, camp counselors, rabbis, teachers, and social workers.

Reports indicate our problems aren’t going away; millennials have less disposable income and the financial chasm between mega-donors and the remaining 99% of the Jewish community is widening. In my next article I will propose how to right this sputtering ship: a radical reorganization towards an ecosystem where value is real instead of speculated, funds foster sustainability instead of self-gratification, and institutions empower instead of dominate those their grantees. With the right systems in place, we have professionals who can help us achieve wonders. Let us not waste our moment.

Andrew Fretwell has worked as an educator and community activator for Young Judaea and the Birthright Israel Foundation between 2007 and 2016, and earned his MBA from CUNY Baruch College in 2015.