Israel Releases 10 Golden Rules for Donors a.k.a. A How-To Guide for Charities

by Shuey Fogel

In mid-October of this year, Israel’s Registrar of Charities issued “10 Golden Rules for Donors” (Hebrew). While the document is meant as a guideline for  individuals, it holds immense value for Israel’s charities, as well.

Here’s why:

Governments equate the tax-deductible rebate on donations to a donation by the government (via the tax authority) to the nonprofit sector as a whole. In essence, the government views itself as a donor. Amutot [Israeli Charities] can be sure that Israel’s Rasham Ha’amutot [Registrar of Charities], as an extension of the government, will be heeding its own advice when it vets charities for compliance.

Below are The 10 Golden Rules (in English) and its implications for nonprofits operating in Israel.

The 10 Golden Rules for Donors

1. Check the status of the amutah

“Visit the Rasham‘s site (Hebrew) to see if the charity actually exists and it’s current status (current, erased, or in the process of involvement).”

Charities:

The above site lists the charity’s name, status, registered address, and status of Nihul Takin for current and upcoming year. The site also allows people to search by name.

So…

Check the page from time to time to ensure that what appears is accurate; what you see, the donors sees. This is otherwise known as Reputation Management 101. (More about this in rule #3.)

Additionally, it is advisable to test-search your organization by inputting its partial name or nickname. This is a great way to observe the competition or help choose a unique name when registering your charity.

2. Confirm that the charity has a Nihul Takin [Certificate of Proper Management]

“The Nihul Takin is a certification issued by the Rasham every year to charities that fulfill the reporting requirements as dictated by the Registrar. Please note that in years when a charity was audited by the Registrar, the Nihul Takin is also a good judge that the organization’s activities are sound. As this is not the case in most years, donors are recommended to carry out their own investigations.”

Charities:

Withholding an organization’s Nihul Takin status is the Registrar’s most powerful and effective tool in its arsenal.   Organizations seeking a government grant or contract must have this status. Additionally, many foreign funders will also only give to nonprofits that have a Nihul Takin. (See previous post, Defining an Amutah.)

In simpler terms, having a Nihul Takin lets donors know that an objective third party – in this case  the Registrar and/or its sub-contractors – has reviewed a nonprofit’s activities.

Furthermore, the above website lists the date that the Nihul Takin was granted, meaning that viewers will know if an organization submitted their forms on time or were delinquent.

It is important to note that only charities that have two years of financial reports are eligible for theNihul Takin. The above site, however, will not list “not eligible” rather “none.” Young organizations should proactively warn their constituents so current and potential donors aren’t left wondering why “their” organization is lacking this important certificate.

3. Check the charity on the site Guidestar Israel

“Guidestar Israel contains information from the Rasham [official] and other sources [less official]. The site contains financial and narrative reports, certifications, summaries of activities, and other relevant information on a charity.”

Charities

Moving onto Reputation Management 201.

Has your organization verified that the material listed on Guidestar Israel is accurate and up-to-date? Organizations can obtain a login password to update and supplement the material that appears on the Guidestar site, including adding text in English.

It is also possible to upload a link to a fundraising site so that impressed individuals can donate directly from Guidestar. Has your organization availed itself of this function?

Has your organization uploaded its logo for brand recognition?

4. Ask the amutah for details about the purpose and destination of your donation

“Do not hesitate to ask the receiving charity for details or for documentation regarding the intended purpose of the donation. Some of this information can be found in the yearly Narritive Report that the charity submits to the Registrar or in the Board protocols [meeting minutes] pertaining to the charity’s goals for that year.”

Charity:

Does your organization make it easy for donors to navigate its website? Perhaps, creating a unique “landing” page for the specific drive; don’t make it hard for your donors to find the answers to the questions you know they are asking.

In general, what was considered good practice a few years ago is now the norm. Organizations should expect that would-be funders will conduct their own investigations and act accordingly.

5. When receiving a request for a donation by telephone, clarify before giving

“In the case of receiving a request by telephone, you can certainly ask the caller to either wait or to call back later so that you can properly check the request via the organization’s website or other  means.”

Charities:

Continuing on the previous point: Has your organization equipped its telephone staff with the proper background information to make the ask seem legitimate and answer basic questions?

6. Avoid donating to temporary kupot tzedekah [donation boxes or pushkas]

“It is best to avoid putting donations in these boxes, unless it is in a permanent location or well kept and connected to a organization you know well. Donation boxes are likely targets for theft or fraud. Regardless of familiarity with a particular organization or donation-box locale, it is best never to give large gifts via these pushkas.”

Charities:

The Registrar is essentially telling donors that those nonprofits that do put out temporary collection plates are not as careful with their funds – or else they wouldn’t collect money in ways susceptible to theft or fraud!

After all, these boxes are not monitored 24/7. Certainly in today’s day and age, organizations can think of more efficient and safe ways to collect funds.

7. Request a receipt from the recipient for your donation

“A receipt is an essential tool for internal and external monitoring of the integrity of the organization. By law, a charity must offer a receipt for any donation. The receipt should minimally include the name of the amutah, the amutah’s registration number, and amount of the donation.”

Charities:

This is really ABCs of Israel charity management. If you’re not providing receipts for every type of donation, this article is way above your head. No seriously, put it down and read the Nihul Takin. Now. [Click for Hebrew and English versions of the Nihul Takin.]

8. Plan your donations

“If you donate regularly, once a year, at least, you should plan out your donations. This planning should include the total amount you plan on donation for the upcoming year, including the purposes of said donations so you can come to an informed decision on where you might want to give. If you have personal information about the activities of a favorite charity, or you were and have been pleasantly impressed by this nonprofit’s activities, there is preference for a contribution to this organization after the aforementioned tests have been executed.”

Charities:

Listen up and listen well: Nonprofits that help their donors create such a plan – even one that includes donations to other charities – are providing a much-needed service and proving added value. Such an organization is engaging and connecting to its donors in a much more intrinsic and personal manner than by simply receiving a check. This type organization will be remembered by the donor for a long time to come.

On a more basic level, this is why a nonprofit organization must invest in its branding. Does your charity clearly state its goal and how it plans to accomplish said goals? Do you make it easy for donors to understand how you fit into the social-service stratosphere? Has your organization focused on causation to prove it is worthiness?

9. When necessary, view the charity’s file at the Registrar or request a copy of it on CD

“When necessary you can request to view an organization’s file at the office of the Registrar or to request a CD copy to be mailed to you, for a fee.”

Charities:

There is always a paper-trail. Almost everything filed is available. The exceptions are documents or sections-of-documents that relate to board members or staff on a personal level. Nuff said.

10. Report an organization’s improper or illegal activity

“If you notice something that seems wrong or illegal about the organization, please contact the offices of the Registrar of Charities by email at: RashamA@justice.gov.il. It is important to note that public inquiries are an integral ingredient used by the Rasham Ha’amutot to monitor the conduct of nonprofits and, thus, to ensure that donations are used for their intended purposes.”

Charities:

Scoff at constituents at your own risk. Moreover, recent scandals have shown that wrongdoing was first noticed by Friends Of charities, those tasked with financially supporting the organization!

The above point includes staff, as well. A recent lecture quoted an international report that the primary source of fraud detection in charities are internal tips.

To quote popular culture: you can run but you can’t hide.  (So stop. Please.)

I join Israel’s Registrar of Charities in wishing that a smarter donor and a more transparent sector will hopefully lead to greater participation and support of Israel’s charities.

What do you think: Good Rules to Live By or Too Oppressive?

Tizku Lemitzvot,

Shuey

Disclaimer: This blog houses my personal opinions and is for informational purposes only – not advice. As charity laws can be quite complex and ever-changing, please refer all questions to qualified and licensed professionals. Read the full disclaimer.

Shuey Fogel is a nonprofit professional turned banking specialist. He is currently Director of Solutions for Nonprofits for an Israeli Bank. Shuey shares relevant conversations, articles, and experiences on his blog, nonprofitbanker.com.

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Comments

  1. says

    excellent shuey – thank you for this. just fyi, having a ‘nihul takin’ is not sufficient to say that a non-profit is satisfactory. it is a very low bar for a non-profit to pass, many do, and many still have serious financial, ethical, moral and other issues despite this.

  2. says

    This is a very important set of guidelines and as a consultant working with Israel-based NPO’s, we endorse these approaches strongly. When an NPO — in Israel, the U.S. or elsewhere — approaches us to retain us for work, we, too, research an organization . . . just as a potential donor will, too!

  3. says

    Robert & Arnie – Thanks for your comments.

    Arnie – You’re right that a Nihul Takin isn’t a “kosher” certification, though in years when the charity is audited by the Registrar it does mean a lot. When speaking to charities, my point is always that Nihul Takin is how the Israel’s Ministry of Justice, and by extension the Registrar of Charities, will judge nonprofits. Furthermore, many private and institutional donors will, indeed, as for a Nihul Takin before agreeing to donate. Israeli charities need to understand both of these things and act accordingly. Nevertheless, you are correct in that donors that will want to know about efficiency and impact will find the Nihul Takin lacking. FYI, I explored the significance of the Nihul Takin in more detail in a previous post Defining an Amutah.

    Best,

    Shuey
    @nonprofitbanker