Federations Shifting Focus to Promote American Jewish Investment in Israel

After years of being told that the role of federations is philanthropy, not finance, advocates of greater American Jewish involvement in Israeli economic development are gaining the upper hand.

In the past two years, a handful of communities have established offices, with federation funding, devoted to creating jobs in Israel by helping Israeli businesses.

And in many more communities, economic development committees have been established to look into the role federations should play in that endeavor.

“We’ve come a long way,” Barry Schrage told a day-long seminar on economic development held here last month as part of the General Assembly of the Council of Jewish Federations.

Shrage, president of Boston’s Combined Jewish Philanthropies, has been a longtime advocate of the idea that some of the money raised by federations for Israel should be spent on developing jobs in Israel.

“History will show that this aliyah did get hung up on the economic development issue,” said Shrage, referring to the slowdown in immigration of Jews from the former Soviet Union. He added: “It’s not great to be right about something like that.”

But Shrage is getting some satisfaction in the way his federation’s model of economic development is being copied, most notably by Atlanta, Baltimore and Minneapolis. These and other local efforts are in addition to Operation Opportunity, an economic development program run by the Jewish Agency for Israel, the principle recipient of money raised for Israel by the United Jewish Appeal.

The idea is simple: rather than have federations solicit donations that would help provide social services to unemployed Israelis, for instance, they would encourage American Jews to do business with Israel, and thereby help create job opportunities there.

For nearly 20 years, advocates of this approach have fought an uphill battle against the traditional belief that the Jewish philanthropic system should stick to funding social services and immigration, and leave business to the businessmen. But now the discussion is shifting to which types of programs produce results and which don’t.

“We’ve arrived at the age where the organized Jewish communities should go the extra mile, and look at Israel as an opportunity to do business, and create much more business,” said Shlomo Harel, head of the Israel Economic Mission to the United States.

Federations, he said, should “use their traditional philanthropy as a springboard toward economic development.”

Harel singled out the pioneering program in Boston, and newer programs in Baltimore and Atlanta, in which a professional, supported by the federation, works to find opportunities in Israel for local business.

“We believe these kinds of ambassadors for economic development should be there in all the major federations,” he said.

What makes these new efforts different, said Shrage and others involved, is that in the past, attempts to promote Israeli businesses have involved bringing together Israeli and American businessmen, and hoping for the best. Other programs would attempt to persuade Jewish businessmen in America to buy Israeli products.

Today’s focus “is not about the Israeli chamber of commerce going to a Jewish supermarket owner and saying, please sell our oranges in the U.S.,” said Shrage.

When the Boston federation decided to get involved in economic development, “we asked, what is the value added of federation?”

The answer was its contacts in the community and its political clout.

The fruits were most evident this past September, when Massachusetts Gov. William Weld led a trade mission to Israel, resulting in the opening of a Massachusetts Trade Office in Jerusalem and the signing of several deals between high-technology companies in Massachusetts and Israel.

But, cautioned Shrage, “A governor’s mission only gets that kind of work done when you’ve had three years of working on strategic alliances in a targeted way.”

It was work that began when the federation decided to begin funding the then- moribund New England-Israel Chamber of Commerce. The first grant was $25,000 a year. Pleased with the results, the federation is now giving $100,000 annually, and will soon increase that by $50,000.

With that money, the chamber of commerce was able to hire staff to research the needs of local companies, and then match them with potential partners in Israel.

“This is not about introducing American Jewish businessmen and Israeli businessmen. It’s about meeting with 200, 250 companies in New England, and finding out what their needs are,” said Shrage.

“We’re not working for Israeli companies. Our primary mission is to find American companies that have needs that can be met by Israeli companies. It’s a highly professionalized, targeted operation, and I think it produces tremendous results.”

In Baltimore, a similar effort has created a Maryland/Israel Development Center. With the same focus on helping meet the needs of local businesses, the Maryland Department of Economic and Employment Development has joined forces with the Associated: Jewish Community Federation of Baltimore, which also involves the Israeli Ministry of Industry and the Jewish Agency.

Working out of the offices of the state’s department of employment and economic development, the Hebrew-speaking director of the center “has the full resources of the state open to him,” said Martin Waxman, secretary of the center.

The Baltimore federation has also tried to take an existing program, the twin- city relationship pioneered by Project Renewal, to a new plateau.

The connection to Kiryat Gat, Baltimore’s Project Renewal community, takes place along two tracks.

In one, the federation is helping fund a high-tech business “incubator,” in which fledgling enterprises are given both logistical and financial support to get off the ground.

While there are nearly two dozen such incubators, funded jointly by the Israeli government and the Jewish Agency’s Operation Opportunity, Waxman said that Kiryat Gat’s is unique in being directly affiliated with the federation.

A Baltimore businessman is one of the incubator’s two chairmen, and there is a project evaluation committee in both countries.

This cooperation ties into the second track of Baltimore support for Kiryat Gat business: a mentoring and networking project.

It was with the assistance of a Baltimore shoe-industry executive that the Kiryat Gat firm, Air-Sports, was able to secure the license to market a brand of shoes, and more than double its staff from 14 workers.

“This is an example of moving Project Renewal, the program of the ’80s, into economic development, the program of the ’90s,” said Waxman.

But Shrage insisted that the twinning approach is a limited one.

“If you’re talking about strategic alliances, you’re assuredly not twinning with a single Israeli city. You’re getting to know your own city very well, getting to know your region, and then the entire Israeli country becomes your palette.”

Tom Glaser, director of Atlanta’s Israel Economic Development Partnership, agreed.

“Israeli economic development is an inexact science,” he said. “We’re writing the book as we’re going along.”

And one thing Glaser said he’s learned so far is “we shouldn’t be restricted by geographic limitations. We learned our strengths should be used wherever they’re needed.”

Another lesson from Atlanta: “If you’re going to get involved, you have to know it’s going to take time,” warned Larry Joseph, a volunteer member of the partnership’s committee.

“It’s not something you’re going to get involved in next year and see results. It’s a five-year investment — it will take that long to have an impact,” he said.

Still, after two years the Atlanta program can report successes, among them the commitment of Home Depot, the national retailing chain founded by a local member of the Jewish community, to hire a buying director in Israel. That effort has resulted so far in contracts with seven Israeli companies.

Those working to encourage economic development schemes also reported an important byproduct for the local federations: interest from Jewish who had never before been involved in federation work.

“We have brought people into our process in Baltimore who never would be walking into our doors if we didn’t do this,” said Waxman. “We have a new $25,000 donor who’s interesting in what we’re doing. He was interested in doing business, and became a donor.”

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