Monday, November 28, 2011

Do you run your synagogue "like a business"?

[The Kosher Cooking Carnival for Kislev is now on-line here]

Over the years, I've heard people say, from time to time, "We should run our synagogue like a business." This sentiment generally arises when discussing budget deficits, charging for shul programs, and raising dues.

I understand what they mean to suggest. They mean, "We should not give aliyot / classes / the rabbi's time away for free," "We should charge people based on the cost of our programs / staff time / facility maintenance."

What they don't really mean to suggest is, "We should run our synagogue like a business." Indeed, one board member of mine once commented that this sort of suggestion is rarely heard from people who have actually run businesses.

To me, running a shul like a business means studying the potential consumer base, broadening and deepening the product line, lowering the cost of entry, investing serious time and money in advertising, and building a community of committed consumers who will network with their friends to promote your product.

Businesses certainly do give things away for free. Businesses do not charge for their products/services based on their real costs. Businesses provide loss leaders and other incentives to get people in the door – just as synagogues do, actually.

I know of synagogues which think it "business-like" to charge people to be on the shul mailing list. But what business would do that? Businesses would gladly pay you for permission to send you information – and they do, regularly, in the form of raffles and the like which are created solely in order to harvest names and contact information.

I know of synagogues which think it "business-like" to publicize their programs only to their members. Is that "running the synagogue like a business"? What business would do that? Is this an attempt to squelch growth?

The truth is that synagogues have a hard time developing a good business model, because much of their product is generally available for free. It's hard to come up with a system by which the synagogue can provide a full range of services and survive economically. But if we think the answer is to run the synagogue "like a business", then let's do it for real – studying the market, designing a great product, reaching out, making sure our services are priced right, and welcoming in the masses of people we will doubtless attract.

12 comments:

  1. The biggest problem with "running a shul like a business", is that the ONLY objective of a business if to make money. If a business isn't sucessful, it will close itself down or relocate.
    A store not makiing money selling shoes, may branch out into other fields and stop selling shoes.

    However a shul has a core service that it needs/wants to provide, even if it is not profitable.

    ReplyDelete
  2. there is a large problem in how to run shuls. in medieval Spain they came to a very consistent system shortly before the expulsion. In this system (1) rabbis got a salary; (2) supporting the yeshivot was mandatory for all communities.
    I am more in favor of home owners and working people bringing in a rabbi of their own choice from the best yeshivot and from the best set of yeshiva bachurim. i.e. I favor the Eastern European model that was in effect from about 1300 until about 1820.
    In Europe the power was given to the baali batim which in my mind is legitimate and in accord with the principle of the rambam that the raish galuta (the secular authority)alone had the authority to appoint a rabbi. he was totally against a situation in which rabbis appoint rabbis unless there would be real semicha.

    the advantage of this model is not just that it is more in accord with the rambam but it address the problem that rabbis often tend to morally challenged. This problem is much less in working people that have to deal with the real world. they tend to have a much better idea of what is right and wrong than most rabbis. This means that though we still need people learning gemara but they should be chosen by the home owners. I feel home owner would be smart enough to tell the difference between a bachur from brisk and the Mir as opposed to some shiduch yeshiva like Lakewood or a lunatic hasidut place.

    ReplyDelete
  3. to me it means realizing that if expense exceeds revenue over time, you're bankrupt (no money=no mission) despite all the good intentions. similarly, if you spend $x on program a it means less available for b(resources are limited, spend them wisely)
    KT
    Joel Rich

    ReplyDelete
  4. I'm with R' Michael Sedley. Synagogues are registered non-profits for a reason.

    When the need to raise enough money to stay open overshadows what it is you're staying open for (a reversal of means and ends), the synagogue is already lost and wandering in the dark.

    ReplyDelete
  5. With regard to Anonymous; comment, I think that is exactly WHY a shul is NOT a business.

    If a Shul opens a new learning program which costs the shul a lot of money, and brings in many new faces, including out-of-town students who are unlikely to ever contribute financialy to the shul.

    From a business perspective the program was a failure, as costs exceeded revenue, however I would hope that the shul would regard the program as a success.

    How will the shul cover the cost of the program is a good question, but the business answer - to close down the program because it is making a loss - should be the wrong answer.

    ReplyDelete
  6. How will the shul cover the cost of the program is a good question, but the business answer - to close down the program because it is making a loss
    ==================
    No, the business answer would be to determine where to make up the shortfall if the program is a key priority-in too many organizations the answer is HKB"H will help. Hopefully he will but does he want you to rely on that or do some hishtadlut.

    BTW see today's WSJ which has a section Should Philanthropies Operate Like Businesses?
    KT
    Joel RIch
    KT
    Joel Rich

    ReplyDelete
  7. Thanks to Joel Rich for pointing out the WSJ article. What Bronfman says there is that "operating like a business" in the context of a charity is to have in place a disciplined way to measure results (not profit and loss).

    ReplyDelete
  8. The point of running like a business is not to focus on profit, but to focus on your mission. In the case of a business the mission is indeed to make money, but in avoiding that particular mission, we end up avoiding focusing at all. We can learn from businesses how to focus (analytics, measurement, advertising, customer service) without adopting what it is that they focus on.

    ReplyDelete
  9. Michael Sedley-
    Good point.

    Adam-
    You wrote, "...it address the problem that rabbis often tend to morally challenged. This problem is much less in working people that have to deal with the real world." Do you have evidence to support that interesting claim?

    Joel-
    That's a business-like realization, certainly, but if your means of addressing the realization is to raise prices rather than cut costs and create efficiencies, I'm not sure that's a business-like solution.

    Joel 2-
    Wow, that's timely.

    Michael K-
    Good to hear from you! But I think there is much to learn and apply from the way businesses operate, without adopting the focus on profit vs focus on mission. The methods used to promote profits can be applied to promote mission.

    ReplyDelete
  10. Rebitzin's Husband wrote:

    Adam-
    You wrote, "...it address the problem that rabbis often tend to morally challenged. This problem is much less in working people that have to deal with the real world." Do you have evidence to support that interesting claim?

    Experience. Rabbis simply seem to be living in some alternative reality. while we only hear about the outrageous abuse still in a smaller sense many orthodox rabbis are living in some type of bubble or parallel universe in which they are the kings of all us serfs. And when anyone tries to bring up the problem the answer is always stonewalling. Even with reb shmuel berenbaum, it was obvious to me that t real powerhouse behind the Mir yeshiva was his rebitzin who had a collage degree and ran the office there.

    ReplyDelete
  11. A businessman knows the competitive environment and its trends. Nowadays, the competition for shuls is not limited to other shuls; it includes not going at at all.

    It's helpful if the Rabbi, officers, and members have the same fundamental goals. If they don't, the business may push away the paying customers. If the members have "wrong" goals, the Rabbi has to be able to persuade. All authority in North America is shaky without the "consent of the governed".

    ReplyDelete
  12. Anonymous 9:11 AM-
    Agreed on all points; thanks for commenting.

    ReplyDelete