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Canadian opens social business to help at-risk youth in Israel

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Food preparation at Liliyot. FACEBOOK

Sometimes it takes a Canadian to change Israel for the better. Chanoch Barkat may have moved to Israel as a child 40 years ago, but he’s still managed to combine the best of the Israeli startup spirit with the Canadian values of social justice, diversity and opportunity. He used these values, and his love of delicious food, to create Liliyot, a restaurant that trains at-risk youth, so they can go on to have meaningful careers.

At first glance, with its rich wood tones and subtle lighting, Liliyot (the name means “lilies” in Hebrew) may look like an ordinary, upscale kosher meat bistro, but the three words above the main door give away the real agenda: “People. Food. Soul.”

This spacious bistro in a bustling, high-end area of Tel Aviv, is actually a social business offering meaningful employment and culinary training to dropouts who are between 16 and 19 years of age, both Jewish and non-Jewish, many of whom already have a criminal record.

Barkat, originally Allan Borovoy, transferred from Associated Hebrew Schools in Toronto to finish school in Israel, eventually earning a B.Sc. in computer engineering from Technion and an MBA from Tel Aviv University. From there, he dove straight into high-tech in the 1990s, running the Israeli branch of Apax Partners, a major global private equity and venture capital firm.

Chanoch Barkat

After leaving Apax, he found himself asking one question over and over: why wasn’t it possible to earn money and do good for society at the same time? Or, as he puts it, “Why couldn’t we back social entrepreneurs in a venture capital model, the way that we back tech entrepreneurs?”

“I was told by everybody I talked to, ‘That’s water and that’s oil; you can’t mix the two’,” Barkat says.

In 2008, he decided to buck conventional wisdom, forming the non-profit social investment fund, Dualis, a combination  of “dual,” for its dual mandate to run successful businesses and improve society, and “Israel.”

“We’re a nonprofit funded by a combination of philanthropy and government matching funds,” Barkat explains. Dualis recently received a US$2.5 million ($3 million) matching grant from the Israeli government. In return, it must bring in $4 million worth of philanthropic contributions within three years.

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Liliyot is the flagship operation among the social businesses Dualis has established around Israel, ranging from eateries, to nail care, women’s clothing, landscaping, computer and office services.

Each business offers employment and on-the-job training to people on the margins of society, such as at-risk youth and people with disabilities, using the same core model: offer an excellent product or service, trim the profit margin to increase social capital and channel profits back into building more social businesses. “We’d like to see 100 restaurants around Israel,” Barkat muses.

Dualis partners with Jewish federations around North America, including New York and Greater Washington, Jewish charitable foundations in Israel and around the world, as well as 10 private backers within Israel, who have each contributed a minimum $100,000.

Liliyot and other Dualis businesses operate for profit, Barkat emphasizes, “but not to maximize profit. Liliyot is a social restaurant. Our target is to make half as much profit as a regular restaurant.” The other half funds the program’s costs, including an on-site social worker, a teaching kitchen and training.

“This is the next generation of philanthropy,” says Barkat. “You’re giving them a fishing rod.”

For the 10 to 15 at-risk youth – one-quarter of Liliyot’s staff – who work for up to 20 months in the restaurant’s kitchen, the program offers: training in personal skills, like dressing for work and personal hygiene; a hot meal before each shift; a paid job, which increases self-esteem and security; placement services; program evaluation; and alumni support.

Today, the program has 250 graduates, many of whom work in, or even own, restaurants around the country.

Barkat, who maintains close ties with his family in Toronto and Ottawa, describes a recent occasion when he was out at another restaurant with his family. The chef approached him and said, “Are you Chanoch from Liliyot?” Barkat said “yes,” and the chef told him, “We have one of your kids working here – he says you saved his life.”

The young chef, now 20, told Barkat that the first time he didn’t show up for work, Liliyot’s social worker came looking for him. He said, “It was the first time in my life that anybody had cared where I was. I never missed a shift again.”

Diners at Liliyot

Barkat describes what Liliyot gives these kids as a “hug”: “These are kids, who have dropped out of school, the welfare system has given up on them. About a third have got a criminal record.”

As a social investment fund, Dualis believes in evaluation and accountability. It thus aims to demonstrate its return on investment in monetary and social terms. Barkat estimates that investing $15,000 in training at-risk youth yields $285,000 in expected lifetime revenues.

Yet for all the social good the restaurant does, Barkat points out one essential truth: “If the food’s not good, if the food is cold, the customer doesn’t come back.”

That’s why a focus on excellence is the final piece of the puzzle that makes eating at Liliyot such a delicious mitzvah: guests enjoy a fine dining experience in the main restaurant, or adjoining event spaces, while the program’s participants gain life skills – including a stable economic situation, solid employment skills and a fresh start they might never have had otherwise – thanks to one Canadian with a vision to change Israeli society for the better.