Our Free Rider Problem
In October 2007, I was invited to the third Professional Leaders Project ThinkTank. The conference took place in Santa Monica, Calif., where, as I recall, close to 200 young Jews were received warmly at a top-flight hotel with beautiful sushi spreads and told that we were the future leaders of American Jewry.
It was the best of times — free-flowing drinks in posh clubs, workshops with top-tier academics and discussions on “empowerment” and “ownership” that championed the young Jewish demographic of which I was a part. Through the PLP conference — and many other similar events sponsored by many of the same philanthropic donors — I met individuals who have since changed my life, convinced me to go to the Wagner-Skirball program at New York University for Jewish communal professionals, connected me more deeply to the Jewish community and, in many ways, made possible much of what I have done with the nonprofit I founded.
So I was sad to learn recently that the PLP is phasing out its operations for the time being, citing the economic climate, and following the death of one of its founders and main benefactors, the philanthropist William Davidson.
But I greeted the news with mixed emotions. The closure of PLP — one of a number of “young adult” or “next gen” initiatives that have winded down recently — may help return the Jewish community to its senses. It may teach us that the disconnect between the people who fund and the people who benefit from programs should never grow as wide as it has in recent years.
To be clear: The flowering of young adult engagement programs over the past decade will continue to bear fruit. Yet the model under which such engagement was undertaken was simply not sustainable. PLP offers an example as to why — although it is only one of a good number of projects run in the same manner.
PLP, an organization that aims to engage and empower the next generation of Jewish leaders, has touched and potentially changed the lives of close to 1,000 young Jewish professionals. Yet it was funded by fewer than half a dozen foundations headed by individuals often three times those young participants’ age. In other words, whereas one would think that the customers were the young adults, the paying customers were the older individuals funding the project out of a belief in its mission. The young people were practically, to use a term from economics, free riders.
If those thousand PLP graduates want PLP to survive, they might each donate money or time to ensure its success. But the paradigm under which young adult initiatives operate often does not recognize the economic and volunteer potential of this audience.
Recognizing that we have been perpetuating a mismatched model is a good thing, and we may never have truly learned this lesson without the help of the current state of the economy. Over these next few challenging years, a lot of good people and good visions will be brutally shaken and forced to rethink the way they do (nonprofit) business.
All of the ventures emerging from this period’s crucible will hopefully understand that outputs need to be tied directly to inputs, that a solid business model is not just a for-profit thing, that one should strive to minimize if not eliminate the gap between beneficiaries of a program and the people who drive that program forward and give it the fuel to keep going.
In a decade or two, when we look back on the post-Madoff period in the nonprofit sector, we very well may remember it as a time of vital change and of creativity. We may recall it as a time when we returned to our senses and built sustainable models that asked those who consume services to contribute and gave free services only to those who truly needed support. It may mean fewer hotels and plain sandwiches instead of sushi, but this period of transformation may well be remembered as the truly best of times.
Ariel Beery is co-director of the PresenTense Group.