In the first days after the Oct. 7 terror attacks, when more than 250 people were kidnapped into Gaza and the country headed to war with Hamas, the families of the hostages were thrust into a nightmarish, unfamiliar world of terrorism, geopolitics and international advocacy as they fought to secure the release of their loved ones. They needed to organize quickly, solicit donations and gain support for their campaign. There was no time to go through the bureaucratic legal process of establishing themselves as an independent nonprofit.

To begin responding to their emergency financial needs, the nascent Hostages and Missing Families Forum turned to the Merit Spread Foundation, which had just received its recognition as a nonprofit that month.

“Without the help of Merit Spread I don’t know how we could’ve survived and succeeded,” said Ruben Eblagon, chairman of the Hostages and Missing Families Forum. “We began to work in the first week and in the second week we looked for a platform from which to work and to raise money for our goals. We didn’t know what we would need, we didn’t have the infrastructure. We didn’t [know] how to plan [our fundraising] correctly. Then Alon Tal came along like an angel.”

Founded in 2021 by Alpha Prosperity Funds headed by CEO Alon Tal (no connection to the American Israeli environmentalist and former Knesset member of the same name), the Merit Spread Foundation had been envisioned as a way to provide a transparent and efficient platform for their high-net-worth clients to engage in philanthropy. It allows them to decide how to donate, by providing them all the legal infrastructure of a nonprofit without the burden of managing the administration.

The platform bills itself as a supercharged one-stop shop for philanthropy. For donors, the foundation provides a simple way to make donations to the recipient of their choice, similar to a donor-advised fund or a donation clearinghouse, such as PEF Israel Endowment Funds, Inc. But unlike those, it offers transferable tax incentives, so a donation made in Israel can be counted as a charitable donation for American tax purposes. These cross-border tax benefits are currently available in Israel, U.S. and Switzerland, Tal said, but the foundation will soon also establish itself in England as well.

In addition to its services for donors, Merit Spread can also be used by fundees. The foundation can function as the financial arm of a new initiative, receiving and distributing funds — to pay for services, salaries, goods and more — as it did for the Hostages and Missing Families Forum. For those who raise money through them, the foundation also offers zero overhead costs, which are covered by Tal’s Alpha Prosperity Funds.

“This is something very enriching because usually [donor-advised fund] organizations…[that] work with charities…are like a pipe or a channel to transfer money to a charity, but they don’t execute anything. And on the other hand, you will see charities that execute, but they cannot do anything with other charities. We do both,” said Tal. “We function both as a DAF, as well as a charity with an unlimited mandate to execute projects.”

The foundation was poised to begin its first donor project — with a medical research center supported by Sagi Gidali, who had recently sold his cybersecurity firm Checkpoint — but Merit Spread quickly pivoted to address the urgent needs sparked by the outbreak of the Israel-Hamas war. 

With extensive legal and operational support both in the United States and Israel, the  foundation was able to establish a project to support the immediate needs of the newly formed Hostages and Missing Families Forum, and began channeling donations from corporations like Checkpoint and El Al Airlines and private donors to support the families of hostages. Checkpoint also provided the Hostages and Missing Families Forum with office space for its headquarters.

“There was a very big need, especially in the U.S., of people who wanted to support Israel but couldn’t find the right channels that would be very efficient, [allowing] the money to flow quickly to the causes that they wanted to serve in Israel,” said Tal. “We had all this infrastructure both in the U.S., as well as in Israel, [so] we started serving causes related to the war…[such as] the families of the hostages.”

In 2021, Alpha Prosperity Funds, which has worked in the financial service sector for three decades providing services to both banks and ultra-high-net-worth individuals, recognized that many of their affluent clients faced challenges with philanthropy due to bureaucratic hurdles, said Tal. It established the Merit Spread Foundation in Israel and the U.S. to streamline charitable efforts by their clients. 

Unlike traditional charities that may have a narrow focus, Merit Spread has an unlimited mandate to engage in various areas of public benefit, explained Tal, and this flexibility allows donors to support a wide range of initiatives according to their interests. In addition, he said, Merit Spread can execute projects independently or collaborate with other charitable organizations, enhancing the effectiveness of philanthropic efforts and broadening the scope of initiatives that can be supported. More recently, the foundation has developed a technology platform that facilitates both fundraising and project management. This platform allows donors to raise funds online and manage their philanthropic projects efficiently, providing full transparency on how funds are allocated.

Merit has raised and deployed approximately $50 million in Israel and the U.S. to different projects within the first 12 months from October 2023 to September 2024, said Tal.

“In the financial world we measure efficiency including in [impact investment] funds…that have dual goals. One goal is to make money for the investors, but the second goal in parallel is to make good for the world,” said Tal. “We bring these models to the philanthropic world in order to maximize the impact. For example, in a typical endowment, only the donor will donate to the endowment and this is the budget. When we make the endowment, we can bring with us [banking] partners to actually work with us to also finance the endowment, which increases dramatically the assets within the endowment. This is a very big benefit for the donor when he knows that not only he will finance the activity, but there are also other reputable participants. So our aim is to bring norms from the business world into this philanthropic world in order to make it super-efficient and in order to serve the donors in the best efficient way.”

Though the Hostage Family Forum has since established itself as an independent nonprofit in Israel and has its own infrastructure, the forum  still uses the Merit Spread Foundation for fundraising in the U.S., Tal said.

He noted that Merit Spread was also recently used by Canadian Jewish philanthropist Stephen Bronfman, who is involved in other philanthropic endeavors of his own, to support a series of musical concerts in the U.S. and Canada under the title of “Heroes” giving narrative to the stories of heroic victims of the Oct. 7 massacre.

While some 60% of their projects are war-related, others such as the WoMed project, which provides mentoring and support to young women doctors by established women doctors as well as scholarships, are not, he said.

Dr. Dana Cohen, WoMed CEO and OBGYN resident at Wolfson Medical Center outside of Tel Aviv, said partnering with Merit Spread Foundation has been a “game-changer” for WoMed.

“For the past seven years, WoMed has been dedicated to empowering female physicians through a personalized mentoring program. Thanks to Merit Spread, our program has gained new opportunities to grow, evolve, and reach more women in meaningful ways. Their unwavering support for our mission enables us to strengthen our community, equip women with the tools to succeed, and pave the way for a more inclusive medical field,” she said. “We are deeply grateful for their partnership, which allows us to create real impact and drive lasting change. It has truly been a game changer for us as a program.”

Tal is convinced that the new model they have created will be the “Netflix” of philanthropy giving, he said, shaking up the field. 

“Netflix was a destructive change to the market. You can feel the same sentiment now, when Merit came to the [philanthropy] market. You see that the different players are now rethinking about the model they operate, specifically about the challenge of donors wanting to have maximum impact and being able to measure this impact,” said Tal.  “Of course, the lower the overheads are, the potential for the impact is bigger. And this is something very unique that we are very proud to do.”