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H​ow to Make Entrepreneurs Work for You

January 7, 2010 By:
Sid Schwarz
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I have more than a passing interest in the debate that's emerged about Jewish social entrepreneurship, which has become a hot topic in the blogosphere.

I am a serial entrepreneur, having founded a synagogue (Adat Shalom Reconstructionist Congregation in Bethesda, Md.), a national Jewish educational organization (the PANIM Institute for Jewish Leadership and Values) and a national interfaith initiative (the E Pluribus Unum Project). Among the fruits of my labor: an enormous level of joy and fulfillment, more than a few gray hairs, and some lessons that might be helpful to the next wave of pioneers and the community that is encouraging them.

When I founded the first two of the above in the late 1980s, there were no organizations around to incubate and support innovation in the Jewish community. The relaunch of the Joshua Venture Group, along with other Jewish social-innovation incubators, represents an important development and signals a realization on the part of funders that one of the community's greatest assets is the creativity of the younger generation. Notwithstanding the impressive array of services provided by the organized Jewish community, the young have to be given the chance to reinvent it all for themselves.

Still, I always fear a stampede. In the rush to throw resources at new Jewish ventures, we can, without prudence, end up doing more harm than good.

First, we must balance the encouragement of the new with support for those organizations that have a proven track record. Second, without the right kind of mentorship, the young may invest years of hard work, only to "crash and burn" when they're no longer the fresh face on the block and attention turns to the next new thing.

Research must be done about the trajectory of Jewish startups over the past 30 years, but I'd also like to offer some observations from my years of experience.

· Impact: No new social venture can succeed unless its leader can identify a need and provide a way to address it. But even when the marketplace indicates that this is desirable, there must also be evidence that the impact has social value. Most nonprofit startups are hard-pressed to afford the kind of independent evaluations that can validate such value. PANIM's first independent evaluation did not take place until its sixth year, and we commissioned it despite the fact that we could not afford it. Still, it was only after that study that we started to attract serious foundation funding.

· Sustainability: Can the organization provide the founder and employees with a living wage? I took no salary in the first six months of PANIM, funding organizational expenses out of pocket. Still, as I built my staff to 21 people over two decades, our growth rate of 10 percent to 15 percent per year allowed me to hire people willing to share in the risks and rewards, and work to create a well-respected group.

Sustainability is only achieved when revenue comes from varied sources. I've seen too many entities burst onto the scene with a boatload of grants that made others green with envy. But, if by year five, an organization cannot produce something valuable enough for the marketplace to pay for, it will have a hard time surviving.

One of the great frustrations of running a small nonprofit is the discovery that foundations will not continue to fund you, even if you deliver everything that you promised. Until that situation changes (and it should), an executive has to spend much time finding new revenue sources, often at the expense of paying attention to the operations and programs of the organization. The E Pluribus Unum Project ran for four years, but ultimately, it was entirely grant-driven, and the foundations backing it were not prepared to underwrite it forever.

· Succession: I've had the pleasure of watching the synagogue I founded grow to 500 families in an environmentally friendly building. I've also watched the merger of PANIM into BBYO last year as a result of my decision to step down as CEO. The result will be a larger platform for PANIM and stronger educational content for BBYO. But many founders do not plan for the day that they may step away from their baby.

The Jewish world stands to enjoy great benefit from the next wave of social entrepreneurship. To maximize its impact, both founders and funders need to be as smart as they are dedicated.

Rabbi Sid Schwarz is the author of several books and an educational consultant. 

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