[eJP note: This post, by Gidi Grinstein, was originally published on May 13, 2008, as part of a series on Philanthropy in Israel. With this year’s Jewish Funders Network conference taking place in Israel, we thought it would be timely to rerun the series.]

In recent years Israel has seen the rise of a new class of newly wealthy and homemade philanthropists. This trend is both a threat and an opportunity for world Jewish philanthropy here and amplifies the need for the overhaul.

There is wide agreement that Israel’s wealthy have not given enough to their own society. Why? The reasons have been exhaustingly discussed and I have little to add to that discussion beyond naming them as a backdrop for this post. They are: First, a legacy of Socialism where citizens are cared for by the government ‘from the cradle to the grave’ has left many insensitive to needs of a growing number of individuals and constituencies. Second, unlike among the leading Jewish elite in the Diaspora, in Israel there has been little social cost, if any, for not giving generously or small benefit for doing so. Third, Israel’s tax deductions are not generous compared to the USA. Relatively high individual and corporate taxes add another disincentive. Fourth, many Israelis don’t know how to give. Philanthropy in American is a serious business founded upon tradition and professionalism. These knowledge and expertise are lacking in Israel.

Finally, there is much less wealth in Israel than in the Diaspora. There are only ten to fifteen Israeli billionaires some of whom actually live overseas. In Los Angeles alone it is estimated that there are between thirty to forty Jewish billionaires. Who knows how many there are in the other major cities of North America, Australia, Russia, or Europe?

In the past few years Diaspora philanthropists have been challenging Israelis to give more and Israeli nonprofits to raise more money in Israel and from Israelis. I believe that this challenge has been effective. Israeli’s are giving more with greater sophistication, awareness and generosity. It may still fall short of expectations but there seems to be constant progress.

However, the rise in Israeli giving has been driven not only by outside pressure but also by other powerful trends:

First, the growing wealth of Israel’s economic elite has created the resources that can turn into philanthropy.

Second, in parallel, inequality in Israeli society has reached a historic high. In thirty years Israel has moved from being the most equal society among developed nations to being the third most unequal society after the USA and the UK. The result is growing criticism, cynicism and even an air of hostility toward affluence. Philanthropy has become the vehicle of people with means to counter these sentiments.

Third, Israel’s business community has been affected by the global trend of corporate and individual responsibility. Many leaders of corporate Israel now have a strategy which is backed by significant resources.

Fourth, the decline of Jerusalem (see post no 3 of this series) has created a vacuum and widespread public distress that offered a new societal role to the ultra-rich.

Finally, a few agents of change are catalyzing this process. Individuals such as Ms. Raya Strauss Ben-Dror, Avi Naor or the 2007 Israel Prize winner, Mr. Dov Lautman, nonprofits like MAALA or companies like Good Vision are raising awareness, bringing advanced approaches and calling Israelis of fortune to the task.

These trends create a challenge of relevance for world Jewish philanthropy in Israel. Israeli philanthropists may be crowding their Diaspora counterparts out of their leadership role in Israel. Their quick catch-up in terms of sizeable giving, sophistication and commitment is compounded by an indisputable advantage in language, cultural awareness, mentality, social networks and acquaintances, which generate a much better prospect of effective philanthropy.

Hence, while encouraging and embracing the rise of Israeli philanthropists, Diaspora philanthropists need to find new ways to preserve their role in Israeli society. I will write extensively about this challenge in posts no. 7-14 of this series. In the context of this post I would like to focus on a few guidelines for a relationship between Diaspora and Israeli philanthropists. They are:

Partnering: Diaspora philanthropists should offer to take part in projects of Israeli donors and challenge Israelis to become partners in theirs. Diaspora philanthropists should invite Israelis and their professional staff to participate in events and go to theirs. In this context, the upcoming annual conference of the Jewish Funders Network in Israel in late March 2008, chaired by Israeli philanthropist Mr. Avi Naor may turn out to be a milestone in this process.

Knowing where to lead or to be led: For example, Diaspora philanthropists will have a harder time leading in projects that deal with Israel’s social problems such as education or welfare. However, in areas such as Israel-Diaspora relations, religious pluralism or nonprofit management Jewish philanthropists will have a unique value to offer.

Claiming credit: A well-known Israeli business person recently donated a hundred million shekels. This gift was proactively made public and extensively and repeatedly covered by all media outlets. There is a powerful logic for doing so. At the same time, how many Diaspora Jewish philanthropists have given much more than the equivalent of twenty five million dollars, yet remain practically unknown? Claiming credit is not for the sake of bolstering egos. Its logic is to communicate to the Israeli public the care, generosity, passion and thoughtfulness of Diaspora Jewish philanthropy in Israel.

Gidi Grinstein is the Founder and President of the Reut Institute.