I’ve been in New York for the better part of a week now. The headlines have been dominated by news of Bernie Madoff’s Ponzi scheme in light of his guilty plea and subsequent jailing until his sentencing later this summer. As I surveyed the horrific destruction wreaked by Madoff and his enablers – personal fortunes evaporated overnight, charitable foundations forced to close, widows rendered penniless etc. etc., I couldn’t help but wonder what lessons one could glean from this unfortunate affair.
Well, there’s the obvious lesson that when one makes investments, it’s best to diversify. Also, it’s a good idea to research any prospective investments thoroughly. But I knew that when I was 12 and my taxi driver Dad taught me about the stock market. No the lessons learned have more to do with the nature of Jewish philanthropy then they do with financial (mis)management. I’ll try to explain.
There was an article about Madoff in the latest Vanity Fair. The author had been following Madoff for a while, ever since he was fortuitously refused entrÃ©e into the most exclusive club in town – those that were allowed to invest in Madoff’s Fund. Madoff’s genius is that he was able to gain the confidence of otherwise intelligent people by sole virtue of who he knew, where he lived and the external trappings of his (stolen) wealth. He was so good at what he did that people and foundations were literally begging to be allowed to give him their hard earned money. Begging!
What does this have to do with Jewish Philanthropy? Well, I really enjoyed Eli Valley’s most recent cartoon in the Forward. Jacob Berkman over at the Fundermentalist, a Jewish Philanthropy blog at the JTA noted that Valley’s cartoon appeared appeared in time for the Jewish Funders Network 2009 Conference in Florida. Berkman notes:
The plot of the comic: A meteor is heading towards earth, so in an effort to save the human race scientists choose Jewish social entrepreneurs to blast into space to another planet. Why? Because social entrepreneurs are the smartest and the brightest and the bestest that the Jewish communal world has to offer.
The subplot of the comic: Maybe they’re not.
The context: The JFN conference is expected to be focused a great deal on social entrepreneurship in the Jewish community.
My Fundermentalist sixth sense tells me there are a few people that want to blast Eli Valley into space right about now.
Now what’s that all about? What does this have to do with Madoff? I guess that the possibility exists that the great folks at the Jewish Funders Network, a collection of the top Jewish philanthropists, might be getting sold a bill of goods when it comes to the importance and even meaning of the notion of “social entrepreneurs” and it’s bastard cousin concept “social networking.” So desperate are some to connect to Gen-Y Jews, that they will latch on to any easy to digest concept that might provide an easy answer to their communal woes – you know, the usual suspects – intermarriage, assimilation, declining Jewish rates of literacy, declining rates of Jewish communal involvement etc. And why are they being fooled? Because being on twitter will not give you any greater street cred with young Jews. A facebook account is not automatically going to endear you the masses of young Jews who have historically been bored shitless with what you have to offer. And those well dressed, hyper eager and articulate activists and newly minted consultants urging you to spend money on a tech-strategy that they, let alone you, barely understand – well, they’re the ones getting a lot of attention, but they are also the ones that have been responsible for a number of failed social networking type projects in the past, so buyer beware.
I think Valley’s cartoon underscores the possibility that the Emperor may have no clothes, that there is an industry out there that preys on clueless foundations by generating meaningless catch phrases and that investments in projects, individuals and concepts that are not sufficiently well thought out and vetted may end up earning the same sorts of returns as an investment in Madoff’s Ponzi scheme.
Oh but the lesson! There was a lesson in all of this! Yes, the lesson is that substance is very important of course, but no matter how raw and indie and effective your project is, you ought not ignore presentation. Take a lesson from successful social entrepreneurs – even the hucksters amongst them – dress well, speak passionately and with an air of authority, kiss butt strategically and stay up to date on the latest advances in technology and social trends.
I didn’t want this to come off sounding like a massive indictment against those that fund our organized Jewish community. The evidence is clear that many out there “get it” and spend their philanthropic dollars wisely. I was pleased to read the study by Professor Steven M. Cohen and Dasee Berkowitz released at the JFN and cited in Dan Brown’s eJewishPhilanthropy blog. Titled Patterns of Singularity: The Motivations of Independent Jewish Funders in Times of Economic Distress, the research was based on in depth interviews with a diverse group of 17 donors as well as a web-administered survey completed by 195 donors and foundation professionals associated with the Jewish Funders Network. What I found there that gave me the greatest hope were the results of the answers to the question “Thinking about your current giving to Jewish causes, what are the issue areas that appeal to you?”
69% cited “Educating Jewish children and adolescents,” 46% cited “Supporting identity-building initiatives by & for Jewish young adults,” and 37% cited “Innovative Jewish learning initiatives” and “Strengthening young people’s ties to Israel.” Those were the top 4 responses. The lowest two issues cited were “New media with a focus on Jewish identity” (8%) and Jewish media (e.g., JTA, newspapers, magazines) (6%). I know looking at these numbers favorably while running a Jewish blog seems odd, but all the online interaction in the world does not compete with significant real world activities and interaction. No matter what the “next-gen millenial i-gen platform leadership text message start-up 2.0 innovator digital zionism” crowd might have you believe.
Real world interaction. That’s how Bernie Madoff succeeded and that’s how you can succeed too. But for the love of God, make sure you can generate a positive return on investment!
Speaking of which, the ROI Summit application period has been extended by a week. If you’ve read this far and you’re a young Jewish innovator, you should probably apply if you haven’t already!