A ‘philanthropic bank’ changing the face of charity

Three years ago, Safed had lost over 150 children to other towns around it due to the lack of after-school activities for the very young. Even the kids’ soccer club had closed as a result of the dearth of funds.

Mayor Ilan Shohat was worried about making the Galilee city more attractive for families looking for homes and struggled to find a solution. He was especially concerned about using the establishment of Bar-Ilan University’s medical school to the advantage of his community.

Today, Safed sees an increase in the number of children in classrooms and in families moving to the area, and it has a state-of-the-art cultural center and brand new academic facilities, as well as several other attractive projects.

The drastic change started when a group of 10 American philanthropists partnered with the Rashi Foundation, a philanthropic organization that has been working in education and social welfare in Israel for more than 20 years, and together decided to invest in improving the quality of life in Safed.

The partnership was the brainchild of Joseph Hyman of New York, who has spent his career dealing with Jewish philanthropy and had an idea for a new approach.

Hyman founded the Center for Entrepreneurial Jewish Philanthropy (CEJP) after he decided that giving charity was, for many wealthy donors, not just a financial investment, but “an investment in people.”

“They are very busy, successful business people and have tens or hundreds of options philanthropically,” he explained last week.

Hyman concluded that just as with any investment, the donors not only need a manager for their projects, but also someone to advise them, which is why he created CEJP as “a philanthropic bank.”

“Our goal is to give these philanthropists a level of service they get when they hire Goldman Sachs to make their investments,” he explained. “We want to help them evaluate their philanthropic options in the same way that they would buy companies.”

After the Second Lebanon War in 2006, CEJP created the Philanthropic Partnership to Strengthen Northern Israel (PPSNI), which linked the 10 donors, whom Hyman calls “partners,” with the Rashi Foundation – which works with the underprivileged and focuses on the younger generation and the special- needs communities – and brought them to Safed.

Four of the 10 visited Safed last week to see the results of their investments: Peter Hochfelder, principal and founder of Brahman Capital Corp.; Marc Cummins, managing partner of Prime Capital; and the co-chairmen of Bed Bath & Beyond, Leonard Feinstein and Warren Eisenberg.

“It’s great to feel like you make a difference. We look to see how we can make a difference in any charity-giving we do, and we think we can make a difference in the city of Safed, so that’s very exciting for us,” Feinstein said.

The four partners, who flew to Israel with their wives and some of their children, said they found the project attractive because of its approach, something that they had never seen in Jewish philanthropy before.

Feinstein said that in addition to the financial partnership, it was the level of “personal involvement” that he experienced as a donor – such as frequent trips to Israel and meetings – that he found attractive and special.

“The ability to actually impact the quality of life in a city by writing relatively modest checks once a year and bringing each of the parts together is very special.

We actually are going to be able to make Safed a better place to live. This concept is not something I ever imagined coming into this,” Cummins said.

Hochfelder explained that he especially appreciates the fact that the enterprise increases its own value, saying, “I think we broke the mold. Leverage is the ultimate accelerant, it’s the ultimate gasoline on the fire in a good way.”

Hochfelder said that he sees much potential in Hyman’s approach.

“He knows in the US a lot of us are business types so we have limited brain power to commit to this, but when we do, it’s very intense and each project is evaluated in a very entrepreneurial way. We look at everything through that kind of filter.”

PPSNI, composed of the donors and Rashi, didn’t fund the $9.2 million Safed projects alone. Shohat added money from his municipal budget and several ministries followed, which created a partnership that all parties describe as “rare” and “innovative.”

“The goal here overall is that we have dynamic partners which each on their own are accustomed to undertaking major projects, but they’re used to being the totality of the process,” Hyman explained. “So what’s different here is that we’re trying to take a few entities which are very powerful and meld them together into a partnership which is far greater than each could have individually done.”

Ronit Segelman of the Rashi Foundation said she sees something special about this new type of collaboration “Most philanthropy is projectbased, whether the project was successful or not, whether it made a difference in the overall strategy or not. This partnership is change-oriented, meaning we do everything we can until we achieve the change.”

“We see the difference,” Shohat said. “Something happened in Safed and people feel it. We actually conduct surveys so we have numbers for that.

We see how life there has changed.”

The numerous projects undertaken in Safed include musical education for children, where groups of five to 10 pupils have the opportunity to learn to play instruments, perform on stage and even receive private lessons; an excellence program at a high school that aims to teach students leadership skills and get them involved in the community by exposing them to the academic world; and restarting the children’s soccer team.

Today, PPSNI believes that Safed will outgrow its physical capacity for children within three years.

“If [US President Barack] Obama would get this group together and sit there and listen to us and let us do the same kind of thinking and the same kind of research and the same kind of work process, we’d be in good shape in the US today,” Eisenberg said, smiling.

“It’s not the money, it’s the process. These guys taught me how to make my city better, where to invest my money and how to do it,” Shohat said.

“It’s easy to think out of the box and bring big ideas, try to bring Tel Aviv to Safed, but this group explained to me that this is my city, this is what I have to work with, so I need to think inside the box, which is even harder to do,” he continued.

Hyman said that with CEJP’s approach, donors don’t only provide funding, but also oversee and make the important decisions regarding their projects “We believe this is the future of philanthropy,” he said.

“We’ve proven that this model works, we’ve proven that it works as a working group and in terms of being able to be impactful,” Cummins said. Eisenberg supported that sentiment, saying that “there should be 10 other groups like these.”

The latest project under development by the PPSNI partners in Safed aims to build a municipal pool, another initiative they believe will attract new residents and continue to make Safed a popular place to live.