Trends in Israeli Philanthropy

Talk highlights dramatic shifts happening in Israeli philanthropy.

By Tamar Snyder

Many people living overseas believe that most, if not all, of the funds for Israel’s nonprofit sector come from overseas, but that’s no longer true. Overseas giving accounted for only $3 billion out of the $5 billion nonprofit sector in 2013 in Israel. This was one of the insights into Israel’s growing philanthropic community shared by Sigal Yaniv Feller, the Director of Advisory Services in Israel at Jewish Funders Network, at a Lunch & Lunch last week hosted by Jewish Communal Fund for its fund holders. Sigal’s fact-filled presentation took fund holders on a journey dating back 70 years ago through the present day, focusing on the dramatic shift happening in the field of philanthropy within Israel. These trends are of interest to Jewish communal professionals and funders alike.

“Building the Country” – Israel’s First 50 Years

“Building the country” was the focus of philanthropic efforts during the first four to five decades after the state of Israel was founded. Charitable dollars flowed primarily from the diaspora through intermediaries such as the Federations, Israel Bonds, and Jewish National Fund. There was a strong sense during this time that Israel was the collective responsibility of the Jewish people, and the vast majority of charitable funds helped to build the infrastructure of the nascent Jewish country. As more diaspora Jews began visiting Israel and forging personal connections, they began to direct their giving somewhat randomly, donating to whatever cause struck their chord emotionally.

Privatization and the “Exit Decade”

In the last 15 to 20 years, the country has gone through a period of privatization. Along with the growth of wealthy individuals and waves of aliyah came a growing socioeconomic gap.

This past decade has seen a shift from nation-building to society building. Known within Israel as the first “Exit Decade,” the growing high-tech industry resulted in more wealth flowing into Israel. It is estimated that more than 10,000 millionaires live in Israel today, representing 3.8 percent of the population.[1]

Among the wealthy who are venturing into philanthropy, many have taken the MONGO approach: “My Own NGO.” As a result, there are 36,000 registered nonprofits in Israel. Yet only 13,000 have the “nihul takin” designation, meaning that they are independently audited and display proper management. Only 5,200 have the 46a designation, which is very difficult to attain.

Israeli Philanthropy Today

Currently, there are approximately 1,500 Israeli funders who give more than $25,000 annually. Why so few? Several reasons, chief among them the Israeli mindset that this is the government’s responsibility. Also, many Israelis feel that they do plenty, including paying high taxes, serving in the army and being on reserve duty. There are also fewer charitable role models in Israel, though that is changing. Philanthropy is not a defining characteristic of the elite. Those who do give are often criticized for having a political agenda. In addition, the tax incentives for giving are minimal as compared with the U.S.

Yet, the Israeli general public does care, she pointed out. In fact, 65 percent of the giving in Israel is from households that give less than 100,000 shekels (about $26,000) per donation (each gift averages $85). This indicates that the general public gives (individuals account for 71% of domestic Israeli giving), though their charitable giving may not be strategic in nature. Israelis give to the same three top issue areas as Americans: Religion, Social Services and Education/Research, though the order is different (Social Services, Education/Research, Religion).

Giving Strategically in Israel

Sigal encouraged fund holders to think about the charitable causes they care about here in the United States and consider supporting those causes in Israel, as well. She recommended working with organizations like Jewish Funders Network Israel, which provides counsel to overseas philanthropists who are interested in making a difference within Israel society, as well as utilizing resources such as GuideStar Israel and Midot to better evaluate Israeli charities for effectiveness.

[1] Merrill Lynch World Wealth Index, June 2010

As part of Jewish Communal Fund’s exciting new partnership with JFN Israel, JCF fundholders will have the opportunity to participate in JFN’s educational events in Israel and benefit from a range of JFN philanthropic advisory services related to giving within Israel. To learn more about this partnership, please contact Ellen Israelson (ellen@jcfny.org) or Sigal Yaniv Feller (Sigal@jfunders.org).

Tamar Snyder, MPA, is the Director of Brand Marketing & Communications for Jewish Communal Fund (JCF), the largest and most active Jewish donor advised fund in the country. JCF fund holders generously grant $300 million annually, on average, to charitable causes in all sectors. Learn more about JCF by visiting www.jcfny.org.

Cross-posted on the JCFNY Blog and the Jewish Funders Network Blog