Over the past year, with examples like the now moribund but once cutting-edge Jewish record company JDub on people’s minds, the Jewish community has spent significant time reflecting on how to make these types of innovative startups more sustainable. Funders, in particular, have tried to figure out how to transition them safely on to the “second stage” of their lives as community institutions. And, more fundamentally, a few questions have presented themselves: What are the obligations of original funders once they have reached the end of the initial funding relationship? Where can an organization turn as it enters a stage of growth that requires larger annual budgets and a greater investment in infrastructure? In what ways does an organization need to adapt structurally in order to survive the transition from pioneering startup to stable fixture in the Jewish communal landscape?
Over the past decade, the Jewish community has fostered these types of organizations, which often try out groundbreaking forms of outreach and mix contemporary culture with tradition. But ironically, especially when these initiatives become successful, they encounter new obstacles that demand they rethink how they can best achieve their missions.
The organization Bikkurim: An Incubator for New Jewish Ideas recently published an important study, the Abundant Harvest report. The report identified the challenges that these post-startups face in the realm of financial sustainability and changing infrastructure needs. Organizations on the cusp of this “second stage” must find a way to professionalize their systems and staff, and to do this they often need additional financial resources just at the moment when the luster of their novelty is dimming. The report has resonated with funders and nonprofit professionals alike.
This also echoes my own experience at The Samuel Bronfman Foundation, where we make long term, deep investments in nonprofit organizations. We have learned again and again that no organization’s life cycle is completely linear. There are key points of inflection that present unique challenges and opportunities. Because we have been able to witness our grantees as they evolve, we have been involved in identifying and addressing these moments.
A perfect example is The Curriculum Initiative, a project we invested in for more than 15 years. TCI is an educational organization that works with Jewish students attending non-Jewish private and independent schools, a previously untapped population for the Jewish community. It provides them with support and resources for Jewish clubs, and with other vehicles for maintaining Jewish identity. TCI has grown and developed as a national organization, but it recently experienced one of these pivotal moments. Its current financial model simply became unsustainable despite support from national foundations and local donors.
In order to continue the TCI program, hard decisions had to be made that have involved scaling back. In the end, the organization decided to close its national office and instead integrate its regional infrastructure into the work of two established local institutions: the Bureau of Jewish Education of San Francisco, Marin County and the Peninsula, and Baltimore’s Center for Jewish Education. This change, though dramatic, will enable TCI to be more impactful and effective in engaging the intended local market of students in those regions while significantly lowering the cost of its operations.
TCI’s transition is one example of how boards and professionals can creatively adapt to better serve their constituents during a time of growth and development. Since this organizational shift is still recent, only time will tell whether the TCI spinoff will lead to its continued success. But we are encouraged by organizations thinking strategically about their growth and examining alternative solutions that address the second stage.
As we negotiate the TCI transition, many others are thinking through the challenges of post-startup organizations. As a community, we need to redefine what growth means and to embrace a broader understanding of growth as more than just scaling up. In any given situation, a merger, spinoff or even a tapering of growth could be the answer that will allow for sustainable innovation.
Second-stage growth requires nimbleness on the part of funders and organizations. By focusing on the mission and not the form through which it is driven, organizations are able to promote their institutional goals during each phase of their development. A commitment to a consistent set of core values may require shifts over time in both program orientation and organizational structures.
It is the responsibility of all stakeholders, including funders, professionals and lay leaders, to engage more publicly in this conversation. Today we are confronted with an opportunity to address an important need in the Jewish community, and together we must exchange ideas, share best practices and continue our support for this sector. Through collaboration and adaptability, we can better equip these organizations so that they don’t falter as they transition to their next stage.
Dana Raucher is the executive director of The Samuel Bronfman Foundation, which has recently launched the Second Stage Growth Fund