Published in the San Diego Union-Tribune, September 11, 2023
by Barbara Bry
They had no farming experience, they couldn’t tell an apple seed from a corn seed, and they didn’t know how to drive a tractor. So naturally, the most obvious thing to do is buy a farm.
The Leichtag Foundation, which was started in 1991 by pharmaceutical entrepreneurs Lee and Toni Leichtag, had $140 million in assets in 2009 by the time both were deceased. They named James Farley as the executor, and he brought in Charlene Seidle, who was president and CEO of the San Diego Jewish Community Foundation, to serve as executive vice president.
“We came to the conclusion that we needed a physical space to achieve our goals — promoting a vibrant Jewish community in North San Diego County, developing shared connections with Israel in agriculture and water research, stimulating social enterprise in coastal North County Jerusalem, and alleviating poverty in North County with a focus on food insecurity. At the time, one in five North County residents didn’t know where their next meal was coming from,” said Farley, president and CEO of the Leichtag Foundation.
So they bought 67.5 acres of what had been the Ecke Ranch for $14.5 million in 2013. The Encinitas-based ranch, known for cultivating poinsettias, had operated for almost 90 years until Ecke family members both donated and sold off most of the 900 acres. There was clearly one last play, and Leichtag had a plan.
With the ranch purchase, the foundation formed Leichtag Commons, which is operated as a nonprofit social enterprise. Social enterprises are mission-driven organizations usually focused on economic and social justice and/or environmental sustainability. The key to their success and longevity is developing a sustainable business model which sounds good on paper but is hard to implement. Good intentions are not enough.
A look at what Leichtag Commons has done is a useful guide. They were fortunate to have a financial cushion as they developed their business model.
1. Know your customer. Leichtag conducted focus groups, surveys and had conversations with dozens of North County residents, both Jewish and non-Jewish, to determine what the community wanted. They learned that the Jewish community craved the opportunity to come together in a Jewish environment, so Leichtag expanded access to the Jewish film and book festivals in North County. The secular community’s focus was on food security. Everyone is welcome to participate in all the programs.
2. Be willing to evolve as the macro changes. When COVID hit, Leichtag continued operating since it was primarily in agriculture, an essential industry. Coastal Roots Farm, which had been started in 2014 as an independent 501(c)(3), converted its pay-what-you-can farm stand into a drive-thru and expanded the hours. Cars lined up for hours.
While many children were going to school on Zoom, it started an outdoor after-school camp teaching children how to grow food.
3. Develop a variety of recurring revenue sources. Leichtag revenues primarily come from agriculture tenants, nonprofits, hosting events, education programs and consulting fees on philanthropic best practices. The property includes The Hive co-working space for nonprofits including Blue Star Families and Coastal Community Foundation; and agriculture-related tenants such as Coastal Roots Farm, the Salk Institute, and Phoenix Agrotech, which specializes in date palm tissue culture.
4. Build a team with different and complementary skill sets. Farley and Seidle brought in a farm manager, professionals in designing and facilitating retreats, and horticulture authorities.
5. Respond proactively to bumps in the road. Starting in February 2020 until late 2022, at the request of the city of Encinitas, Leichtag provided a parking lot for Jewish Family Service to operate a venue for homeless families. Some community members protested at city council meetings. “It was a learning moment for us,” said Seidle. “We hosted public neighborhood education forums, and we put out FAQ. We realized we didn’t have the kind of transparent external communications plan that we should have.”
6. Think differently. The long-term goal is to “sunset” the Leichtag Foundation — to spend down the capital to make a larger impact in the short term (while creating sustainability for key programs). Foundations usually spend 5 percent to 6 percent of their capital on grants every year and preserve the core. “The concept of limited life foundations has accelerated so that you can take an urgent approach and not pass on problems to future generations,” said Seidle.
Rule No. 777:
Mary, Mary, quite contrary. How does your garden grow?