Ideal Partnerships For An Ideal Cause

How are Chabad Houses funded and what defines the partnerships that enable them to grow in an era of rapidly evolving philanthropy?

Studies tracking charitable contributions consistently find that the American Jewish community is overrepresented. Philanthropy is a tremendous point of Jewish pride, but all too often, the objects of our largesse are not Jewish causes. Leaders of Jewish organizations will tell you that they are scraping the bottom of the barrel. If that isn’t challenging enough, Jewish institutions are now finding that they can no longer expect community-wide participation to sustain their activities. Where funding once came consistently, in small denominations from a broad donor base, today, ninety percent of the funding will come from a small number of private philanthropists.

How are Chabad Houses funded and what defines the partnerships that enable them to grow in an era of rapidly evolving philanthropy?

In the late 1960s, Rabbi Shimon Lazaroff, now age seventy-seven, was widely known as the “Pushka King.” Every half a year, the rabbi organized an elaborate charity-box campaign (or “pushka” in Yiddish) to help fund Chabad’s outreach activities in Detroit. First, the rabbi distributed small, empty charity boxes to Jewish households across the city. Families were encouraged to fulfill the mitzvah of tzedakah (charity) by putting a few cents or a few dollars in the charity box every day. Then, at the end of six months, the rabbi and a young associate would go door to door, collecting the full boxes and replacing them with empty ones. The rabbi would also use these one-on-one interactions as opportunities to give out mezuzahs, wrap tefillin, and disseminate inspirational Jewish reading material. The small coins and bills that the rabbi collected on each of his “pushka-runs” added up to about $7,000—enough to cover half the annual budget of his Jewish educational work. At the time, this was considered such a successful campaign that other Chabad emissaries often consulted with Lazaroff in an attempt to replicate it.

In 1972, the Lubavitcher Rebbe asked Rabbi Lazaroff to become a Chabad emissary to Houston, Texas. Chabad Lubavitch Headquarters gave the rabbi a small stipend to get started, but expected Lazaroff to cover most of his Chabad House’s operating budget by raising funds locally. In his second year on the “job,” Lazaroff raised $70,000 to fund the local Chabad’s growing programs. In his third year, with the launching of a building campaign for what would become the Chabad day school, the budget ballooned to $700,000, and Rabbi Lazaroff’s fundraising campaign ballooned with it. Today, Chabad of Houston’s Jewish programming runs the gamut, from a successful Jewish day school housed on a three-acre campus to multiple synagogues to Chabad centers at various college campuses, summer camps, adult classes, and a variety of social programs. Its 2019 budget was nearly $5 million, all of it raised locally.

Series A: Financing a Chabad Startup

Chabad Headquarters has provided initial seed money, building funds, and subsidies for various educational and programming initiatives. But for the most part, today, when a young Chabad emissary couple moves to a new outpost, they are usually expected to raise the seed money for this venture themselves. Often it’s family and friends who keep these couples going through their first year. Then, the couple is responsible for identifying the needs of their new community, building Jewish programs from the ground up, and raising the necessary funds to operate them.

“We are startups in the fullest sense of the word,” says Rabbi Peretz Chein of Chabad of Brandeis University. “We have a dream, and we put everything we have—all of our human resources—into that vision, with the hope that it will become sustainable.”

The success of each Chabad center is determined by its emissary’s individual efforts, and with the consistent growth of Chabad institutions around the world, many would say that this entrepreneurial approach has paid off. At the November 2019 annual Conference of Chabad-Lubavitch Emissaries, Rabbi Moshe Kotlarsky, vice-chairman of Merkos L’Inyonei Chinuch, the educational arm of Chabad that oversees the opening of Chabad centers to new areas, offered a glimpse of Chabad’s numbers: “Today we have 5,067 shluchim couples serving in 3,500 institutions and 108 countries and territories worldwide. Represented here tonight is klal Yisrael (the entire Jewish nation).” 

Researchers of Jewish philanthropy have described Chabad as a fundraising powerhouse, and for good reason: collectively, the Chabad-Lubavitch worldwide estimated budget is a whopping $1.5-$2 billion. But those numbers are misleading because each of its centers are independently funded. And while many Chabad Houses eventually expand and build expansive campuses and programs (many of which are catalogued in these pages), there are even more that don’t. For every big-city state-of-the-art synagogue that’s constructed, there are many more fledgling Chabad Houses in small towns, operating out of overrun living rooms and outdated storefronts. 

Ask any Chabad emissary and they will tell you that, whether it’s worrying about the salaries of a dozen staff members or just trying to cover the grocery bill for their community Shabbat dinner, fundraising is incredibly difficult and emotionally draining. It is also critical to their missions.

“Fundraising is not just about securing the funds to pay for your literal bread and butter,” explains Chein. “It is about getting people to literally buy in to your passion and vision. When we set out to create an engaged Jewish community, those partnerships are a critical part of what we are doing.”

Unlike many Jewish organizations, Chabad does not demand up-front financial commitments from community members who want to participate in its activities. When the goal is Torah observance and Jewish engagement, there can be no barriers to entry. Every Jew is welcome, no matter their background, level of observance, or financial means. And if they won’t come in, the Chabad emissary will seek them out—learning Torah with businesspeople in their offices, delivering homemade challah to assisted living homes, and bringing chicken soup to dorm rooms. In person, Chabad emissaries develop genuine bonds with the people in their communities proving their value not with marketing slogans but with benevolent actions. Often, these acts of kindness inspire beneficiaries to give back. Once we experience how personal and meaningful Jewish values are, most of us find that we want to invest in them. 

This relationship-based approach reflects the Lubavitcher Rebbe’s vision of how emissaries would succeed in their work. Rabbi Yehuda Krinsky, longtime secretary to the Rebbe and chairman of Merkos L’Inyonei Chinuch at Chabad Lubavitch Headquarters, says that the Rebbe wanted emissaries to partner with local donors so that the philanthropists and the emissaries would feel a responsibility towards each other and toward their mutual mission. Every donation becomes an intimate act performed between two people–the solicitor and the donor both gain stakes in each other’s work and success. In the world of entrepreneurship, no one is more dedicated than the person who has put their own personal assets on the line. That is why it is typically the rabbi or rebbetzin, not a hired fundraising professional, who is connecting with donors.

For the earliest emissaries, there was little sophistication to this technique. When Lazaroff first made his pushka rounds in Houston in the 70s, he would share stories with potential donors, telling them about the Torah classes in his home and the unaffiliated Jews whom he’d bumped into at the grocery store and invited over for Shabbat meals. Lazaroff’s son Chaim says that these early donors, many of whom were Holocaust survivors or children of traditional homes, loved his father. Lazaroff’s natural charisma and his role as a representative of a familiar and authentic Judaism made him a personal favorite among local philanthropists, and they gave to his Chabad House generously.

“People give to people,” says Dr. Jack Wertheimer, who is a professor of American Jewish History at the Jewish Theological Seminary and an expert in the field of Jewish philanthropy. “Philanthropy is primarily a human interaction where people give to people they like and respect and with whom they have a personal affinity.”

And despite potential denominational differences, or even a lack of interest in Judaism at all, many Jews still seem to like their Chabad emissaries. But in a world that is getting smaller by the day, where nonprofits are competing for every dollar raised, is “liking” the rabbi enough?

Changing Tides in Jewish Philanthropy

The Jewish community has long played an outsized role in American philanthropy, giving more money to charity than just about any other ethnic or religious group in America gives. Traditions of charity, or tzedakah, are deeply ingrained in Jewish values. But unlike their peers in other American religious groups, Jews are less likely to give to religious organizations, often preferring causes such as medical research, art, and higher education. In 2015, American giving to Jewish causes was estimated at almost $6 billion. But according to a JTA analysis, this hefty number actually represents a decline of about fifteen to twenty percent from twenty years earlier.

This downward trend in donations to Jewish causes is exacerbated by a significant shift in fund sourcing. Today, more and more philanthropic dollars are coming from fewer and fewer sources—most of them deep-pocket donors.

In Giving Jewish: How Big Funders Have Transformed American Jewish Philanthropy, a report released by the AVI CHAI Foundation in 2018, lead researcher Dr. Wertheimer found that “today’s Jewish philanthropy is primarily about the largesse of big donors. . . As a rule of thumb, between eighty and ninety percent of the funds raised come from a small minority of donors.”

And those donors have very specific interests. Sophisticated philanthropists do not want to simply support an individual organization; they want to create systemic change with tangible social impact. Wertheimer notes that many large-scale donors have shifted their priorities from funding social services to focusing on outreach and engagement of unaffiliated Jews.

Chabad’s fundraising has aligned with both of these trends. “Chabad follows the larger model in the sense that a majority of funds raised both at a local level and for international Chabad programs (like the Jewish Learning Institute and Chabad on Campus International) are dependent primarily on larger funders,” says Wertheimer.

Luckily for the emissaries, Chabad’s core mission of reinforcing Jewish identity and enhancing Jewish life through community engagement has also become a funding priority for many philanthropists. “Funders are very concerned with reaching Jews who are not engaged with Jewish life, and they see Chabad institutions as one of the key ways to light the spark,” Wertheimer told Lubavitch International. “[Many] support Chabad programs because they see emissaries as the people who are most likely to reach certain populations and forge a connection that will win people over to Jewish life.”  

Chabad has also evolved its fundraising model to meet the increased expectations of more urbane philanthropists. Rabbi Elazar Green, a Chabad emissary in Lancaster, Pennsylvania, who also acts as a fundraising coach for his peers, says that emissaries are now benefiting from modern fundraising research and techniques that are shared through various networks.

“There is a lot more demand for transparency and a laser-like focus on performance and measurable impact,” says Green. “Fifty years ago, a donor may have written a check and had no idea what came of it. Donors today are engaged; they want to know exactly what they are funding and how it is pushing the needle forward toward realizing the organization’s goals.”

Emissaries have adapted accordingly. Many have instituted boards for oversight, put together annual reviews, developed elaborate five-year plans, and created innovative campaign materials that are as polished as those of the largest nonprofits in the business. But they haven’t gone fully corporate. The relative autonomy of each Chabad emissary couple and the low overhead that Chabad is known for has made it possible for individual emissaries to develop nimble entrepreneurial approaches that are tailored to their particular visions. They can also adapt to new, disruptive technologies more easily.

Moshe Hecht is the Chief Innovation Officer at Charidy.com, a popular crowdfunding platform for nonprofits. He has worked with more than 1,000 Chabad institutions that have utilized the website to run crowdfunding campaigns. Many of these institutions have attracted large philanthropic gifts by matching donations that are given within a limited time span.

“Chabad Houses were the first adopters of our platform,” Hecht says. “From my experience, they have more risk tolerance than many other nonprofits. They have to take risks since they are so close to the mission. They are the ones on the ground and every dollar raised can mean their next Shabbat dinner.”

The success of crowdfunding spread like wildfire among emissary networks, Hecht notes, as it helped solve multiple fundraising issues at once: “Bigger philanthropists are more willing to channel their major gift through crowdfunding as they understand the ripple effect it commands. Smaller donors are inspired to give, which expands the donor base, while also giving collective intelligence to bigger donors that people want this product.”

Measurable Outcomes

Modern philanthropists want evidence that the nonprofit organization they are funding is making a difference. In an interview with EJewishPhilanthropy.com, Moshe Tabacinic, a businessman from South America and a generous funder to various Chabad causes, explained, “Before all else, it is important to remember that this money really does not belong to me; it is G-d’s money. So I feel that I have a fiduciary obligation to manage these funds in a way that can produce the best results.”

Increased demand for a clear-cut return on investment has been a challenge for many emissaries who contest that their results are less concrete than those of charities that aim to feed the poor or eradicate polio.

“In Chabad theology, we teach that a mitzvah connects you with the infinite Divine. One mitzvah is so valuable that it can justify going to the ends of the earth to perform it,” says Rabbi Zvi Drizin, an emissary in Dallas, Texas. “If that is the mission that the Rebbe sent us out to accomplish, it is something that is impossible to measure. Any measurable outcomes that we could set—for example getting 100 Jews to do one mitzvah—are innately arbitrary in their scope.”

Nevertheless, Chabad emissaries have plenty to show for their efforts. While Lubavitch Headquarters doesn’t set a whole lot of institutional benchmarks, many emissaries have begun independently tracking metrics of engagement—500 attendees at a Chanukah event, a twenty-percent increase in Hebrew School enrollment, and so on—to show donors that their Chabad houses are vibrant organizations that deliver measurable returns. 

Chein, of Chabad of Brandeis, says that his donors are most interested in seeing continued innovation in his work. “Our mission remains the same, but donors want to see how we are responding to the needs on the ground with new initiatives and by pushing new boundaries. They help push us and keep us accountable so that we do not get stagnant in our field,” he explains.

Meanwhile, Zvi Drizin has gotten creative about identifying measurable performance goals that reassure his donors, even while he maintains that many benchmarks in the field of Jewish engagement are highly subjective. The rabbi developed an algorithm that tracks different types of Chabad activities, weighing in qualitative as well as quantitative measurements to calculate cost per engagement. 

Businessman George Rohr, whose largesse has made his name a ubiquitous one at Chabad Houses around the world, has channelled much of his Jewish giving through Chabad’s educational programming. Rohr agrees that he and many of his fellow philanthropists are concerned with “measured outcomes that can demonstrate a correlation between dollars invested and tangible impact.” When necessary, the philanthropists themselves will help fund the data-collection efforts that inform their decision-making. 

As a result of Rohr’s philanthropic investment in Chabad on Campus International, the organization was able to develop an internal, web-based portal that is used in the field for real-time data collection. “Today, one of Chabad on Campus International’s thirty-three team members is a data scientist, identifying, collecting, scrubbing, and analyzing every available bit of information,” Rohr tells Lubavitch International. 

“This is used before, after, and during programs so that its leaders are always able to make course corrections based on results.” 

And the data speaks for itself. Rohr points to The Hertog Study conducted by researchers at Brandeis University that he says shows how “a dollar invested in Chabad on Campus programming and student engagement has the statistically-supported potential to increase a young adult’s lifetime connection to the Jewish community, traditions, and values.” 

A True Partnership

Despite the importance of perceived return on investment, it is the emissaries’ dedication to their mission and the connection between the one making “the ask” and the philanthropist that ultimately opens the coffers.

“In other nonprofits, spiritual leaders are not typically the ones doing the fundraising,” observes Hecht from his experience working with thousands of religious nonprofits. “They don’t want to mix spirituality with the mundane. But counterintuitively, it is when you mix the two that you get more donor engagement. When the rabbi who is tutoring your son for his bar mitzvah also asks you for a donation to fund the Bar Mitzvah Club, it is not just a business transaction anymore. When you integrate fundraising with your service, you get the complete donor. Tzedakah becomes a spiritual relationship.”

Unfortunately, those relationships have become much harder to develop over the years. Chaim Lazaroff grew up in Houston, aiding his parents in their vital community work. Today, he directs Chabad of Uptown, where he largely works with the hard-to-reach millennial demographic. Young college students and professionals are typically the least likely Jewish demographic to be engaged in their Judaism, and they are even less likely to financially support Jewish causes. According to a recent Merrill Lynch study, donations from baby boomers account for a staggering forty-two percent of all charitable giving in the United States. The primary motivation attributed to these donations is “making a difference in the lives of others.” Compared to baby boomers, millennials donated more to animal rights, the environment, and human rights causes, and less to religious or spiritual charities. 

While those who study Jewish philanthropy see the next generation’s disinterest as a cause for concern, Rabbi Chaim views it as an exciting opportunity. “I have found that millennials will only support organizations that they find very compelling and are personally involved in,” he says. “An older donor may write a check from his or her office and never show up to an event, while a millennial who is giving his or her money will be actively involved in the program’s success.” Whereas most of Chabad of Houston’s programming follows the standard Pareto model that ten percent of donors fund eighty to ninety percent of the budget, at least fifty percent of Chabad of Uptown’s Young Jewish Professionals budget is covered by program participants. 

Chabad emissary and fundraising coach Rabbi Green notes that the ideal donor is not just someone who gives money to a cause: “The best partnership is with a philanthropist who deeply cares for the mission—someone who realizes that, as a donor, their job is to influence and contribute ideas and guidance.” 

According to George Rohr, because funders may have resources and particular expertise that smaller organizations cannot access or afford, “the funder will be involved in helping to define explicit goals, assisting in the development of technological solutions to both implement a program, and measure related outcomes. Once a donor is confident that the organization can manage a new or existing program successfully, alignment falls into place.”

But alignment does not mean that a donor gets to dictate their own agenda. Emissaries often clarify that donors are buying into the Rebbe’s very specific vision, one on which they are unwilling to compromise.

Some Chabad emissaries have bristled at the idea of a donor using Chabad’s advanced network as an easy distribution system for a particular pet project. “Though Chabad’s mission is broad and far-reaching, we cannot be everything to everyone,” Lazaroff says. Issues like saving the environment and lobbying for pro-Israel policies do not generally fall under Chabad’s purview. On the other hand, Chabad does promote Torah-based values that often align with those missions: emissaries teach their communities about the importance of caring for our planet, and they are deeply invested in the Jewish people’s religious and historical ties to the Holy Land.  

Lazaroff insists that Chabad does not engage in trendy causes—not even when those causes would make for good marketing. “We have not changed our core mission,” he says. “Everything is distilled through Torah and mitzvahs. If we are helping homebound seniors it is because it is a central theme of Judaism to help others, not because it will speak to the social justice cause du jour.” 

Indeed, Chabad’s refusal to minimize the religious nature of its mission can narrow potential fundraising streams. Many Chabad emissaries have had to turn away substantial funding when a potential donor disagreed on its core principles—for instance, when potential donors have requested that emissaries compromise on halachic standards. But, in the long run, Chabad emissaries win people over by safeguarding the authenticity of their Jewish communities and demonstrating genuine care for their neighbors. 

And while the six-figure gifts make news, emissaries are grateful as well for smaller gifts that go a long way towards the impactful services they provide. In Halifax, Nova Scotia, Chabad’s emissaries say that a $1,000 gift would allow them to purchase an award-winning Jewish educational course that they have been eager to bring to their community. Chabad on Campus at an Ohio college will cover the costs of feeding a dozen college students at a Shabbat meal with a gift of $250. And Jewish children depend on summer camp scholarships that their local Chabad centers try to secure for them so that they can have a Jewish camping experience. In Silver Springs, Maryland, an at-capacity preschool is wishing for a $50,000 gift to expand to a second location.    

Barry Wolfe, a longtime philanthropist to Jewish causes and the current treasurer of StandWithUS, a non-profit pro-Israel education and advocacy organization, says that he has long been motivated to give to specifically Jewish causes because he feels that it is his responsibility to help build a strong Jewish future. Growing up impoverished as a first generation American, he recalls that there was always a pushka next to the Shabbat candles in his home. Giving was a fundamental value in his family, and he always donated the requisite ten percent of his income to charity. When Wolfe became financially successful in the business world, he sought out more significant ways to give back, becoming deeply involved in Jewish philanthropy for many years.

His giving habits have aligned with societal trends. While Wolfe notes wryly that he “probably still writes too many small checks to too many organizations out of habit,” he has shifted most of his support to Jewish organizations where he is actively involved. “It is my responsibility to be a role model to others,” he says. “Because I donate to the causes I believe in, it gives me credibility to speak to others about giving.”

Recently, Wolfe, who once served as the president of his Conservative synagogue, says that he has been disillusioned with many large-scale Jewish enterprises that are “top heavy” with exorbitant overhead costs and no longer represent what he considers to be authentic Jewish values. Six months ago, he started attending a Chabad center in West Hills, California, where he feels excited about the new style of communities that Chabad is building—young, vibrant, and deeply rooted in Torah Judaism. Looking for ways to contribute, he financed new security measures that would keep the synagogue safe.

From his office at Chabad Headquarters, Rabbi Krinsky points out that “Jewish continuity is not just Chabad’s issue. Anyone who cares about Jewish continuity knows that partnering with Chabad is one of your best guarantees for a secure, vibrant Jewish future.”

Wolfe’s advice for fellow philanthropists? “Get to know the rabbi as a person, see what you can do for him, and watch and see what happens.” 

Chabad-Lubavitch Headquarters Machne Israel Development Fund helps direct donor funds to local Chabad centers: [email protected] 

Source: http://lubavitch.com/news/article/2109299/Ideal-Partnerships-For-An-Ideal-Cause.html