Day camps: The trickle down impact of Judaism’s most profitable business

How the economic benefits of day camps cascade into other facets of Jewish life and ideas for increasing their impact

Oct 05, 2023

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The economics of most Jewish communal businesses are not sustainable without philanthropy. At best most Jewish communal businesses will seek to breakeven on an annual basis. They might pad their balance sheet through capital campaigns, but typically they do not generate enough of an annual surplus to fuel their future. A program run by an organization like Hillel or Moishe House might charge a nominal program fee, but typically that fee, at best, simply covers costs, and rarely does it subsidize the cost of overhead. Other Jewish businesses like synagogues or day schools do generate a fair amount of revenue in the form of membership dues or tuition, but both institutions essentially charge what they need to breakeven (plus loads of philanthropy). In short, it’s hard to do more than breakeven in most Jewish communal businesses.

It’s worth asking why it’s the case that most of our businesses cannot command a price premium above their cost. The short answer is that for non orthodox institutions, our Jewish communal businesses compete for consumer time with some of the most well resourced companies in the world. From Google to Instagram to Starbucks to Netflix, there are a lot of sophisticated organizations creating compelling experiences that steal consumer timeshare and wallet share. This has always been a challenge for Jewish communal organizations, but with the advent of cheaper internet based alternatives for people’s time it has increasingly become harder to compete on experience and price.

Why camps have thrived

The good news is that there seems to be one healthy business left standing - day camps. The price Jewish day camps continue to command goes up with other secular summer alternatives and the demand for Jewish camping remains at an all-time high.

There are a variety of reasons this may be the case.

Camping is a business where not overly investing is a strategy - Parents deliberately want a simple environment for their kids. Camping is seen as the anti-digital environment parents crave. The expectation for what a wooden bunk looks like has only changed modestly in the past 30 years. Further, for parents who attended the same or a similar camp there is actually value associated with the camp not changing and instead resembling what it looked like many years ago. This means camps are not engaged in the endless hampster-wheel of iteration that well capitalized businesses typically can beat them at.

The buyer is not that picky because they are not there - Camping has the advantage of serving kids whose discerning parents aren’t even present to judge the product. Unlike Hebrew/Day Schools where parents get a daily report from their kids and see the school at pickup/dropoff, camps operate with relative autonomy from daily parental judgment. Camps certainly deal with all kinds of emergencies and parents do butt their heads in, but for the most part less scrutiny is paid to a child’s summer experience than one that directly engages parents on a day-to-day basis. This means that camps are less subjected to the increasing standards of parents.

An everyday value prop coupled with Jewish content - Most non orthodox parents and even some orthodox parents can attest to how hard it can be to deliver meaningful Jewish content to your children. It requires capturing their attention and knowing how to teach it yourself, both of which require skill and patience. Camping is something that fulfills a logistic need (take care of my kid), is fun for kids, and layers on top of it something that parents want (Jewish content) but have a low tolerance to pay for.

Price parity with secular options - Until a child is of working age there is no free alternative to a camp of some kind. Most parents are required to find a place for their child to go during the day so they can find time to work. This means that camps operate at relative price parity to other secular options, which allows them to increase prices accordingly and cover their costs.

In order to understand how we might expand upon our worthy investment in camps, it’s worth examining the unit economics of Jewish camping at a more detailed level.

Day camp economics

Day camps typically run for 8-10 weeks of the summer. The economic model is quite simple in that the revenue comes from parents paying for their child to attend typically on a per week basis. The major variable cost associated with that child’s experience are their counselors and to some extent semi-variable staff such as unit heads, specialists, and other support staff.

Assuming a camper to counselor ratio of 5:1, a Specialist/Supervisor ratio of 15:1, and a net per week tuition of $700, here is the per week economic yield excluding all forms of non variable expense.

This means that for each camper week at the camp, if there was no one running the camp and the camp incurred no non-staff operating costs, the camp would make $460 per week per camper, or what I’m referring to as “variable margin per week”. This concept is useful because it acknowledges that the only real variable cost of camping are the staff that create the day-to-day experience. If a camp increases from 300 to 400 kids, the only real costs that increase are the ones captured above. Most of the rest of that variable margin falls to the bottom line.

When we multiply that out by camp size you can see how much total variable margin is generated at different camper counts.

This means that a camp of 600 kids (on average) for all 8 weeks generates ~$2.2m in variable margin. Now, what about the resources that manage the camp and its operating costs? Here is a list of roles with hypothesized compensation. The accuracy of these figures is less important than the magnitude of cost relative to the variable margin.

If you subtract that support staff from any of the figures above you can see how much cash is generated before taking out other operating expenses. With these assumptions, a camp of 600 generates $1.7m before accounting for operating expenses. There are certainly maintenance costs and other operating costs associated with running a day camp, but this demonstrates how at scale, an organization can generate a significant amount of margin from a scaled day camp.

Trickle down impact of camp

So where does all this money go? In the case of independent private camps the surplus allows for a healthy business to thrive. Here in Boston there is a non-Jewish camp called Linx that has scaled many types of speciality camps (STEAM, adventure, sports) under one umbrella. The organization has been around for 20+ and by all accounts has created a profitable sustainable business. YMCAs are also large camp operators. While their prices are typically more modest, they benefit from running those camps out of year-round facilities and leveraging the advantages of the rest of their business model.

The Jewish umbrella organization that has benefited most from day camp profits have been JCCs. One JCCA study from 2017 revealed that day camps account for 57% of JCC profit. While the accounting at JCCs can be challenging to untangle, it's widely acknowledged that camps are the core profit generator. Early childhood programs generally run breakeven at best. Fitness programs are becoming a smaller and smaller portion of JCC revenues. Most other revenue at JCCs are from a range of programs, which typically run at cost or more likely at a loss.

While JCCs raise a substantial amount of philanthropy to support their efforts, it’s clear that day camps effectively subsidize a large portion of the Jewish life JCCs offer. This means that camp tuition not only covers the impact camps have on their participant’s Jewish trajectory, but the benefits also extend to subsidize Jewish life at large. This makes camps a powerful vehicle for Jewish community building.

Driving more impact

Given the profits day camps can generate at scale it’s worth asking how we might increase the impact they can have on our Jewish communities.

Umbrella orgs launch more camps

If framed as the enabler of the rest of the business model, umbrellas should be investing in more camps as a means of fueling the rest of their operation. More camps doesn’t just mean more communal impact inside of those camps, but as discussed above, means multiplicative impacts well beyond the summer.

The typical answer to future-looking investment is to lean on philanthropy. Capital campaigns are often leaned on to fuel the future, but there’s an argument that camps are better than capital campaigns because their profits provide an annuity AND the camps themselves provide a sizable Jewish impact on their participants. If a JCC can open a new camp that generates $1m in operating profit at maybe 400 campers per season, the equivalent endowment campaign would need to raise $20m (i.e. $20m * 5% return = $1m/year). I would venture to say that if a JCC were able to rent space to run its next summer camp, the incremental capital costs of opening a new camp would be far less than $20m. The framing for these new camps should acknowledge their broader impact and be prioritized accordingly.

Targeted capital campaigns

Because of the impact potential of summer camps beyond their program, investing in camping should make for a compelling capital campaign pitch. An investment in a day camp or a day camp that is yet to exist should be viewed as an investment that serves 2 purposes: Impactful Jewish summer experiences for participants and impactful Jewish experiences year round. These campaigns should acknowledge the place that camps play, fueling the entire enterprise and not just the camp itself.

More organizations open camps

If camps carry the characteristics above it’s surprising that more organizations don’t run them. It’s worth acknowledging that running a camp is not easy. As the son of a long-standing camp director, I’ve seen firsthand the challenges of hiring, maintaining a facility, managing staff, and handling the stresses of the summer. That said, the value a camp creates can be quite simple. It requires a stated value proposition (sports, drama, music, etc), staff capable of paying off that value proposition, and a location that can cater to that value proposition.

Day schools may be a prime candidate for camp expansion. These institutions typically have a location with some form of athletic and theater facilities. Further, these facilities are maintained by default for the core operations of the school. The typical answer is to rent their facilities for the summer. While this creates opportunistic revenue/profit for the school, there is a cap on the amount they can generate which is governed by the market price for renting their facilities. Given the profit opportunity associated with a camp, it may take years to build up a following, but the longer term annuity stream of profits is not capped in the same way that renting is. Maybe camps would even serve as lead generation for future day school families.

While school administrators certainly need a break during the summer, they are capable of hiring a camp director to manage the functions necessary for recruiting, marketing, hiring, etc. Importantly, they could even use camping as an acquisition device for their day school and view it as yet another component of their community building strategy.

Who else could benefit? From Jewish social service organizations to synagogues, one could imagine a wide variety of camping concepts that could emerge. It’s certainly daunting to think about evolving a completely new capability, but it’s also worth acknowledging the impact it could have on the rest of the organization.

Conclusion

Camps are a cherished part of our Jewish ecosystems. They are appropriately heralded for the impact they have on their participants. It’s been demonstrated time and time again how camps build Jewish identity and create positive Jewish outcomes (defined in a variety of ways) possible. What is perhaps under appreciated is the impact that our camps have on the rest of our institutions and Jewish life as a whole. We should consider this holistic impact and invest in our camps accordingly.

The Business of Jewish