Israel’s Charitable Sector is Getting an Overhaul On and Offline
by Shuey Fogel
The June 26th Conference Organized by Guidestar Israel – a collaborative project of the Ministry of Justice, Registrar of Corporations, Guidestar International, NP Tech, Joint Distribution Committee (JDC), and Yad Hanadiv (a.k.a. The Rothchild Foundation) – was June’s best prediction for “The Tomorrow of Jewish Philanthropy.”
In the global nonprofit sector there is much talk of cooperation and the need to combine forces to increase efficiency and cut costs, yet this synergy is hard to find. Guidestar Israel, in contrast, is actually doing it. Local charities, international organizations, private funds and government resources have all cooperated to bring the Guidestar Israel project into fruition. (And yes, it took over six years for the parties agree and get things off the ground, but we’ll choose not to focus on that for right now.)
Like many conferences, there was the good and the less good, but for those paid attention, there was also the surprising – announcements foretelling actual progress.
Offline – Changes in Israeli Government Oversight
Advocate Alon Bachar, Director of Israel’s Corporations Authority, which oversees the Registrar of Charities and the Registrar of Companies, was quick to declare that transparency is the foundation of Israel’s nonprofit sector. Scandals, he continued, harm the sector as a whole. Thus, he concluded – and this is where things got interesting – self interest dictates that the nonprofit sector should police itself. (It would appear from his words that he considers himself and the Government office he represents to be card-carrying members of Israel’s nonprofit sector.)
Furthermore, Bachar blames the local nonprofit sector’s lack of transparency for Israel’s lack-luster standing in philanthropy as compared to other modern countries. This is a bold statement considering other experts have pointed fingers at lax Government tax incentives as the root of the problem or Israeli charities overall lack of strategic engagement with their constituents (my personal belief, which I elaborated in a previous post, “The Real Reason Israelis Don’t Donate to Charity“).
The part of his speech that had the most practical application was Bachar’s announcement that the Registrar of Charities is adding services to increase its own transparency. In the past, Bachar explained, Israeli charities essentially had five addresses within the Registrar of Charities – including accounting, legal, managerial and compliance – where they could address their problems, seek answers, or submit reports. Two years of analysis determined this method to be less than effective and a decision was made to revamp the entire system.
As part of the Registrar’s overhaul, multidisciplinary staffs will be created to combine the five different needs into one address. Instead of five addresses, each charity will be assigned a team that will handle any and all of their requests. Furthermore, this new type of team will allow the Registrar to further specialize its staffs by discipline – whether it be sports, education, welfare, health, environment, religious etc – to better cater to nuance, experience, and trends of the different types of causes.
Transparency, as Bachar defines it for the Registrar of Charities, is uploading information quicker so that it can be utilized in a timelier manner. Toward this end, he said, the Registrar is turning totally digital, with every form and appeal to be handled online. He also announced that the Nihul Takin will be updated soon and would probably only be released on the internet.
Bachar didn’t leave much to the imagination for those that were looking to understand the criteria on upon which the Registrar inspects nonprofits. Bachar stressed that organizations should pay close attention to the Nihul Takin, as it explains “our priorities and how we evaluate charities.”
Bachar also encouraged amutot to take advantage of Guidestar Israel and upload as much information as possible – even more than is necessary – so as to increase transparency of the organization and the sector as a whole. While some might see this recommendation of Guidestar as mere self-promotion, it should be taken much more seriously considering these two statements:
Bachar’s claim that the Registrar of Charities will be increasing cooperation with various Government agencies, specifically the Tax Authority & Anti Money Laundering Compliance, so as to decrease overlap.
This declaration was preceded by statements from Dr. Guy Rotkopf, CEO of the Justice Ministry that overseas Bachar’s Registrar of Corporations, in which he boldly claimed that Israeli charities that choose not to participate in Guidestar Israel have something to hide.
Definitely hints of trends to come.
Online – Changes to Available Data
Avi Shapira, CEO of NP Tech, the Public Benefit Company that develops and oversees Guidestar Israel and Techsoup Israel, stressed that his organization is aware of Guidestar’s important role in Israel’s nonprofit sector. Evidence of its increasingly crucial role, he said, is seen from the growing number of views of the site from abroad – even though the current version of Guidestar Israel is primarily available in Hebrew.
Shapira believes that Guidestar sits at a unique crossroads because it is a joint project between private and government entities. As such, he wishes that organizations would proactively use Guidestar as a Transparency tool. In this vein, Shapira believes that it is only natural that Guidestar should be the address to aggregate all available Government grants – a feature he believes will be integrated in approximately four months time. (Wow!)
Following up Mr. Shapira, was Benny Shlesinger, of NPTech, who is Guidestar Israel’s project manager. Benny opened that the new site can already be previewed at preview.guidestar.org.il.
The current site is available in English but only in a limited capacity. The new site, however, will exist in full in English and will incorporate English in its search functions, a feature that will allow international donors to more easily find organizations of interest. Additionally, increased search capabilities will also include the ability to search by organization type, a feature geared for the potential donor with a specific charitable goal in mind but is unaware of the players in that particular field.
In the new site, Shlesinger continued, nonprofits can add even more details to their profile, including links to their social media personalities on the various networks. (Links to donation portals already exist in the current version). This enhanced profile brings with it improved navigation and color designation to make it easier to discern if the information shown originates from certified Government sources or from the charity itself.
Streamlined Data Output and More Timely Analysis
Thanks to recent efforts to bring Israel’s nonprofit online, important data on Israel’s nonprofit sector is available faster than it was in the past.
Additionally, the available data incorporates internationally recognized definitions and categories (see pgs 18-22) to enable the data to be used beyond Israel’s borders, giving the local sector a better understanding of how it fares in the global market and vice versa.
Utilizing this shorter turnaround, Prof. Nisan Limor, Chairman of NP Tech and one of Israel’s leading researchers into its nonprofit sector, presented findings from 2010.
While not the focus of this article, it is interesting to note some of the points that Prof. Limor stressed:
The whole notion of tax-deductible status is very problematic in Israel. The data shows that only 4,280 out of Israel’s approximately 35 thousand charities actually have tax-deductible status, known here in Israel as Sei’f 46a status. Limor pointed out that no other OECD country has charities appealing to parliament to get tax-deductible status. (I shared my own opinions regarding Se’if 46 in a previous piece.)
Tracking “ownership” of nonprofits is still difficult if not impossible. There are invariably charities that are managed by local municipalities, making them extensions of local government and not really charities for the sake of sector analysis. Who these are and how many is very much a mystery.
With all the outcries against “high” salaries in Israel’s nonprofit sector, the numbers show that being a nonprofit manager is no sure ticket to riches. By law, each organization must list its five highest paid employees (assuming they even have five staff members). The average of the five highest paid employees across the entire sector amounts to 8,777 NIS a month, which Limor notes is Israel’s average monthly salary. Even the average of all highest paid employees only amounted to a monthly salary of 12,593 NIS – and all this is before taxes. (No wonder so many directors leave to enter the private sector.) Again, certainly not the point of this piece, but worthy to note.
Both the global and local nonprofit sectors are changing and the word Transparency seems to be an integral part of this metamorphosis.
While it is true that most of the points mentioned above are predictions for the future as opposed to hard analysis of the past – and we all know what happens when you “assume” – we should consider ourselves lucky that at last week’s conference the various Government oversight bodies were kind enough to specify the application of Transparency. The exact date these changes will come into effect is of less importance that the fact that they eventually will. Case in Point: Guidestar Israel took six years but did eventually get off the ground.
If your organization is smart it will start to implement the above suggestions soon so it can be among the leaders of this change instead of lagging behind.
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 Nonprofit Services for an Israeli bank. Shuey shares relevant conversations, articles, and experiences on his blog,nonprofitbanker.com.