JDub Closing For Financial Reasons
07/12/11
Staff Writer
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After nearly nine years of operation and 35 album releases, JDub has announced that it will close up shop for financial reasons.

The not-for-profit record label that is best known for helping to launch the career of reggae star Matisyahu worked to help Jews in their 20s and 30s “forge vibrant connections to Judaism through music, media and cultural events,” according to its mission statement.

On that level, it succeeded, said Felicia Herman, the executive director of the Natan Fund, a funder of JDub for the last eight years. In addition to the hundreds of thousands of people JDub touched directly through its events and albums, the organization “changed the communal conversation and made the community aware of the need to adapt to 21st-century American realities,” she said. “JDub’s stakeholders should feel nothing except ‘mission accomplished.’”

In addition to the challenges facing the music industry during the past decade, JDub suffered from an “aging out” of the startup world. With almost a decade of experience and a significant annual budget, JDub sought second-stage funding, also known as mezzanine-level funding, to help secure its long-term future. While the Jewish community has increased its support of innovative startups in recent years, JDub’s demise raises the question of whether enough funds are earmarked toward helping successful startups achieve long-term growth and sustainability as they celebrate their 10th birthday and beyond.

“It’s a systemic problem,” Herman acknowledged. “It’s much more expensive to support growth.”

While Natan, which focuses primarily on programs aimed at Jews in their 20s and 30s, funds startups with budgets of less than $1.5 million, the fund has a small portfolio of core grantees that it funds for the long term. JDub was one of those grantees. “If the budget grows above $1.5 million, we’re happy,” Herman said.

JDub had tried to sustain itself with moneymaking side ventures, though it may have stretched itself too thin. The organization earned half of its annual budget from foundations and individual donors, and half from album sales and concert tickets, as well as a consultancy it founded that provided marketing expertise to organizations such as Birthright Israel NEXT, Tablet Magazine, and Hillel International.

In 2010, it acquired Jewcy.com, the irreverent web portal catering to young Jews, which has attracted nearly three million unique visitors. The organization also co-founded the Six Points Fellowship for Emerging Jewish Artists.

“While these strategic moves have dramatically increased our impact, they never yielded a sustainable revenue base,” JDub acknowledged in a press release Tuesday announcing its decision to wind down.

The timeline for JDub’s closing, as well as possible spin-offs of certain projects, has yet to be determined. (Aaron Bisman, JDub’s CEO, declined to comment.) The organization said that it plans to be transparent in its efforts and to model the best practices for shuttering a Jewish nonprofit.

The decision to close was a “really careful decision,” Herman said. “It’s incredibly courageous — you have to be very honest about what you can and cannot sustain.”

Herman noted that Bisman, as a leader, and JDub, as an organization, taught the community about the 20s and 30s demographic and how to reach them.

“I guess that’s why I’m not as sad,” she added. “We don’t necessarily build an organization to last forever.”

Tamar@jewishweek.org

 

 

Last Update:

07/18/2011 - 15:51

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I would like to clarify a couple of points of misinformation about Natan in the comments above. (And I'd suggest having a look at any of the other thoughtful pieces being published here and elsewhere for corrections of the misinformation on JDub.)

Natan is not an incubator. We are a grantmaking foundation - we primarily provide financial resources to our grantees. That said, we do try to offer as many other forms of support to our grantees - and to many organizations that pass through our doors - especially through advocacy and connections to other prospective funders, stakeholders, and users.

Natan has never purported to be able to provide the full funding that any organization needs to thrive. We are very realistic about the fact that our grants, which generally range from $25,000-$50,000, are by no means enough to sustain most organizations, nor to take them "to scale." Best practice for nonprofits is to have a diverse community of funders; and best practice for funders is to work in partnership with other funders. This is the model that Natan strives to emulate.

We are also quite aware that the pressures on even the best organizations are manifold. So, for example, we strive to balance a) the need for our members to fully understand the applicants they are reviewing or the results of the grants they have made with b) a desire to minimize the application and reporting burdens on grantees.

And yes, we fully expect some of our grantees to close their doors (JDub is hardly the first to do so). This is the nature of the risk-tolerant funding we do. Having the wisdom and courage to close when something serious isn't working - even when your programs and services are in high demand, as JDub's were - is a rare and necessary thing in the nonprofit world. Isn't the world full enough of passe, anemic organizations that couldn't make that decision?

And finally, Natan is primarily made up of what in the funding world are called "earners," not "inheritors" (the commenter uses a more derisive term). But whether a philanthropist has earned or inherited his or her money is immaterial. What matters is the thoughtfulness, intelligence, and humility with which s/he allocates it. Natan members strive to meet that standard in all of their allocations processes - bringing with them, not incidentally, tremendous wisdom from their professional experience. But no one at Natan claims to be an expert in this - Natan is a place for people to learn about philanthropy, to become inspired to give to emerging Jewish and Israeli nonprofits, and to do so together with like-minded peers. Neither Natan nor other funders are perfect, and philanthropy, like all things, is a learning process.

Felicia Herman, Executive Director
The Natan Fund
Felicia@natan.org

To be sure nothing lasts forever , but closing after 9 years can this be called a successful start- up ? Full disclosure : I never heard of this organization , they never connected with me

A few issues:

1. It's no surprise when a fund like Natan's typical grants are $10k-$70k that the organizations they "support" crash and burn. It's time to realize these incubator funds are ways for trust fund babies with no experience in running a non-profit to take credit for funding organizations while loading them with paperwork and no real support or connections. A large challenge in running a Jewish organization is dealing with the tush-backwards foundations.

2. JDub went out of business because they were selling something nobody wanted (with the exception of Matisyahu, whom they lost, because they're not effective managers...you don't see Scooter Braun losing Justin Beiber)...they were pushing lame Williamsburg hipsters with unremarkable talent to other hipsters with no money to spend on albums. If they had "almost 3 million" unique visitor to their website, it was people who landed on their pages accidentally via google search and went right back out. How many *regular users* did they have? How much repeat business? Clearly: not enough.

3. It's telling that large organizations actually paid these guys to consult. Some experts! If you look at Hillel and Birthright NEXT's progress in expanding their reach, you can see what they got: lessons in how to crash and burn. (Tip: learn from * successful* people next time!)

What funders need to do is grow a pair and REALLY fund an organization. You'd never see a VC fund a start-up with $50k and call themselves anything but an angel investor, yet groups like Natan have to gall to parade themselves as expert organizations? Well, here's what Natan creates. Failure.

“We don’t necessarily build an organization to last forever.” Nice way to cover your tush in front of her donors. She paraded this charity around for years and they didn't cause a shift in culture or become sustainable. Some incubator!

This is sad news... I will miss them..

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