Project-driven Funding

April 12, 2009

While globalized giving may create the opportunity for organizations, small and large, to reach more donors, it is most certainly creating several challenges. First, with such a large menu of options, donors can be quite specific and therefore restrictive in their giving. This is often translated into support for projects that reflect the objectives of donors, instead of for organizations that share the mission and goals of donors. Projects do not just happen, of course. They are designed and implemented by individuals in organizations. These individuals invest their time and expertise in establishing relationships with those served by agencies or organizations and their projects. Organizations, made up of these individuals, are more effective when clients and/or communities perceive them as having made a commitment to the community, view them as collaborators, not simply motivated by a funding source that may or may not be long-term. In addition, organizations, even the leanest, most efficient organizations, have administrative costs. Even frugal--indeed saintly--organizations have salaries or utility bills that allow them to meet their objectives or plan and secure funding for the next project. Finally, categorical projects, that is, with often narrowly defined objectives, may not map effectively to the needs and context of a particular community. For example, does an interest in at-risk children include programs for their parents? Or take the example of the Hasadna Conservatory in Jerusalem. Does providing music lessons to Ethiopian children meet the interests of a donor dedicated to at-risk children or not? This is the fundamental tension between categorical programs on the one hand and comprehensive programs on the other. Some donors are needed to support the “pool” of funds that most organizations need to function. If everybody just supports programs, the result may be that there is no organization to carry out programs.

A second challenge is that project-driven giving encourages more evaluation. While evaluation should be fundamental, so that donors can know the effectiveness of their giving and can use that information to guide choices among the myriad of options, the process can encumber organizations with an added bureaucratic layer. The trick is to incorporate evaluation into the day to day operations and records, but that too can be cumbersome. Should reports be issued monthly? Yearly? What level of data is required and what is the expense in time, effort, and good will to generate this information. What happens if the evaluation requirements impinge on the basic operational efforts of a small organization? This then seems to be another argument for giving to support the “pool.” Such shared resources may make it more likely that important evaluation needs can be met without disrupting from or detracting from actual services.

What are the implications for the Jewish community? Traditionally, Jews have supported a community fund, whether through Jewish federations or their earlier renditions going back as far as the middle ages. Under this model community leaders are responsible for allocating the collections. They allocate to individuals in need and organizations that assist those in need. This mechanism of a communal fund has helped to assure that most needs are met. These might be individual needs for food or shelter at one end of a spectrum. At the other end of the spectrum are massive community needs such as providing the planning, raising, and distribution of huge amounts of money. For example: organizing communal funds to provide money and human resources to help develop pre-state Israel and then facilitate the transition to a functioning state; raising hundreds of millions of dollars to transport 100,000 Ethiopian Jews to Israel during the 1990s; providing food, medicine and visitors to tens of thousands of elderly Holocaust survivors in the former Soviet Union. Globalization is changing this mechanism because donors feel less of an obligation (or perhaps no obligation) to a communal fund and at the same time they are no longer on the community system to provide the needs assessment and allocation decisions; they can do this on their own. There are tensions over the very value of “all Jews are responsible one for the other.” Is this still a fundamental value for the Jewish people? If it is, what are the mechanisms to assure that autonomous, global donors can act on that value?