Jewish philanthropy is undergoing a transformation. The challenges it faces are a microcosm of the challenges facing the larger philanthropic community.

The philanthropic sector, as a whole, needs to breathe new life into the way it raises money and funds nonprofits. For Jewish organizations, the challenge includes:

• Fifty percent of donors are boomer age or above.
• Funding could decrease in the next decade if outreach to Gen X and Gen Y isn’t increased.
• New blood is needed in grantmaking, people not entrenched in the old way of doing things.
• Systems must be developed that allow new approaches to problem-solving.
• Approaches that worked well in the past must be continued.

The underlying challenge is to resolve the tension between funding the old standbys and undertaking new approaches in ways that engage multiple generations.

Let’s start with the East Coast and the UJA-Federation of New York City. I spoke with Mark Medin, senior vice president of the Federation.

• UJA focuses on funding organizations that can document their social impact with hard data. UJA analyzes the return on their investment, does “due diligence,” and, in general, looks at grantmaking through a business-like lens.
• It also emphasizes capacity building. More than 65% of UJA grants go to hard-to-fund undertaking such as strategic planning, technology, web development, and marketing materials. Only 35% goes to mission-driven efforts. It’s a “teach a man to fish” approach that potentially has long-lasting benefits.
• UJA also has huge initiatives to recruit and engage those under 40. These initiatives are often hands-on rather than just soliciting money. Up-and-comers are invited to observe a nonprofit board in action, as non-voting members, an approach that opens boards up to new ideas while providing insight into board operations to potential board members. Observers frequently join the board after their “observership.”

Underlying all these initiatives is a belief in multi-year funding.

I’m impressed with the emphasis on capacity building; it’s an area donors have ignored in the past, viewing it as “overhead.” But such efforts are really a cost of doing business, as important as paying the electric bill and the rent. Without up-to-date tools and well trained staff, programs flounder.

I also like the emphasis on hands-on philanthropy. Good governance isn’t just about how much money a board member can bring to table. It’s about the vision and skills, planning, advocacy and, yes, that over-used word, passion.

Next week, I’ll look at the West Coast, where the Jewish Federation of San Francisco is taking a strategic approach to grantmaking to deal with the same problems.

How has your organization dealt with shifts in donor demographics?

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