Israeli Nonprofit Social Justice Organizations No Better Employers Than For-Profits

Beersheva, Israel; May 13, 2013 – Despite the expectation that nonprofit organizations involved in solving social problems will be fair employers, it appears that the labor market in the third sector is characterized by low-wages, part-time and temporary employment, and inequalities, just like in the business and government sectors.

A study conducted by Dr. Hagai Katz and Hila Yogev-Keren of the Guilford Glazer Faculty of Business and Management at Ben-Gurion University of the Negev, analyzed Central Bureau of Statistics and Income Tax data on third sector employees and wages between the years 2000-2009, and revealed some alarming data about the third sector labor market in Israel.

The findings indicate that the third sector workforce is relatively young and well educated, and it is dominated by women and Jewish employees. In addition, despite a slow decentralization process, most employment is concentrated in the central region (Tel Aviv and Jerusalem) and not in the periphery.

Notwithstanding a moderate but stable increase in the number of employees in the sector, the labor market in the third sector is such that it fails to offer job security: employee turnover is fast – under 40% of the employees work more than two years in their organization, temporary and part-time jobs abound, and there are consistent seasonal patterns – a decrease of 20% in employment during the months of summer and the High Holidays.

Examining the share of wages earned in the third sector to the total income of individuals, it was found that the average wage ratio stood at 62%. This means that, on average, individual income from jobs in the third sector accounts for only 62% of their total income from work that year. That is, existing wages and jobs in third sector organizations require employees to supplement their income from outside sources.

The average monthly wage per job in third sector organizations was significantly lower than the national average in 2009, at NIS 4,230. Consistent wage gaps are evident by field of activity, gender, occupation, nationality, age, and between center and periphery.

In contrast to reports of high salaries amongst nonprofit CEOs, Katz and Yogev-Keren found that the CEOs average salary was NIS 17,047.

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  1. says

    This is an incredibly worrying report. The oxymoron of a social sector that does not respect its own workforce is one that will implode if not dealt with soon and seriously. With the government bound to rely more and more upon 3rd sector support and service provision, this is a cancer we cannot ignore.

  2. says

    Hi Dan,

    While I would agree with the facts that you (and Jonny) have listed, I strongly disagree that Israel’s charities are only to blame – we cannot ignore that Israel’s nonprofits are working within a system that doesn’t promote the ideals that you believe these organizations should espouse.

    Donors, the media, and government watchdogs pay close attention to administrative expenses and operation ratios. Moreover, these players compare the nonprofit sector to the business when it comes to business-practice norms. So how can we fault amutot (Israeli charities) for playing by these general accepted rules?

    Again, I agree that the items listed are definitely problems. But to put the blame squarely on Israel’s charities isn’t fair.

    FYI, data from Israel’s Registry of Charities lists average CEO salary at 12,593. It would be interesting to understand where the descrepancy is.