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'Second Stage' for Startups

Posted by: yladmin
May 01, 2012 at 4:43 PM

by Helen Chernikoff, is a poster child of the Jewish startup sector, the grass-roots movement that aims to reach the disinterested and unaffiliated by offering new ways – such as record labels, bike rides and online Shabbat services – to connect with Judaism. Over 3,000 educators around the world use G-dcast’s funky parsha-of-the-week videos, which have been viewed over a million times on the web, the group says.

Why, then, is G-dcast about to find itself out on the street?

“It’s not just my problem,” said Sarah Lefton, founder and director of G-dcast, which has doubled its budget and hired three part-time staff in the past year, but will soon struggle to make rent. “All of the young Jewish organizations in San Francisco have the same problem.”

In fact, most young Jewish organizations, wherever they are based, are having a hard time growing. Last week, The Samuel Bronfman Foundation became the first major Jewish philanthropy to tackle this problem in a systematic way, announcing a “Second Stage Fund” to support young organizations with small budgets that are at least starting to plan their next stage of development.

“We are looking for organizations that have thought strategically about their growth and how to address their next stage of development,” said Ariel Groveman Weiner, associate director of the foundation. “We want organizations that know this needs to be a priority.”

In 2010, the Samuel Bronfman Foundation gave almost $3 million in grants to a range of mostly Jewish causes, including newer groups like Keshet, which pushes for the inclusion of gay, lesbian, bisexual and transgender Jews, and established organizations, such as the Federation of Jewish Men’s Clubs.

The new fund will offer up to $100,000 over multiple years to organizations that are least six years old, but have operating budgets of less than $5 million. Both the ability to use the money for operations instead of only programming and the multi-year commitment are unusual, said Nina Bruder, the executive director of Bikkurim, an incubator for new Jewish organizations that recently released a report documenting barriers to startups’ growth and making recommendations. The Samuel Bronfman Foundation also helped pay for the Bikkurim report.

“My experience is that people want to fund sexy programs involving films and kids, and nobody wants to pay for our office space,” Lefton said. G-dcast only has an office at all because a friend of Lefton’s is charging her a token rent for some unused workspace. That charmed arrangement is ending in June.

Bronfman’s Second Stage Fund reflects a larger trend in which philanthropy is seeing a benefit to emulating the business world, where fledgling groups’ progress from stage to stage is more neatly demarcated by different types of investors and levels of funding.

“There are exceptions to every rule, but it’s helpful to think in terms of stages,” said Lara Galinsky, a senior vice president at Echoing Green, which provides funding and other forms of support to social entrepreneurs. “Organizations and funding streams are starting to organize around different phases, and there is a bit of a pipeline, but there needs to be a lot more support.”

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