New Institute Seeks to Break Gridlock in Israeli Philanthropy

by Steve Gosset

From Dafna Meitar-Nechmad’s vantage point, the intersection of the legal and philanthropic worlds in Israel is a mess. As a Jewish Funders Network board member and former partner at one of Israel’s leading law firms, Meitar-Nechmad is familiar with the bureaucratic gridlock and arcane rules that keep philanthropy in Israel from being mainstreamed into the nation’s culture.

Toward that end, she is leading an effort to establish the Institute for Law and Philanthropy at Tel Aviv University’s law school.

It aims to provide the basis for laws and regulations to make giving more attractive to donors and less burdensome for nonprofits.

“This is an opportunity for lawyers to become change agents in Israel,” said Meitar-Nechmad, who is working on the institute with JFN member Edna Fast. “We want to provide the context to influence the conversation and simplify procedures. There’s a growing awareness of how philanthropy can drive social change, but academic research on the field needs to catch up so it can enhance and influence policy.”

The Meitar  family has long been associated with Tel Aviv University – Meitar-Nechmad’s alma mater – having established The Zvi Meitar Center for Advanced Legal Studies, whose goal is to plug a brain drain of top Israeli law students who leave the country to pursue graduate degrees.

“So many go abroad and they forget to come back,” said Meitar-Nechmad, who is also founder of the Zvi and Ofra Meitar Family Fund, named after her parents.

One goal of the institute is to create opportunities for students who do not want to practice in a law firm and prime the pump for the next generation of legal academics. But the program has a more immediate, pragmatic component too. The rules governing NGOs and charitable deductions in Israel are widely regarded as limiting, confusing and cumbersome. The example of section 46a of Israel’s tax ordinance is instructive.

Only gifts to amutot, or registered charities, which receive a 46a designation, are eligible for a 35 percent tax credit for donations.

However, a 46a application can spend two to three years in bureaucratic limbo before it has any chance of being approved. And that can only happen after being reviewed by a Knesset committee, which looks hard at the NGO’s record of achievement.

“It’s a Catch 22. You need a track record. But how do you get a track record if you make it harder for wealthier donors to give?”  said Meitar-Nechmad, who was a corporate partner until 2006 in the Meitar, Liquornik, Geva & Leshem, Brandwein Law Offices.

Meitar-Nechmad believes the government will welcome the input of outside experts on how it can smooth out the 46a application process and help officials explore a mechanism for a more comprehensive system of tax credits or deductions.

“Big-money philanthropy is not the whole story. Most people giving are smaller donors” or do it out of a sense of national pride and civic duty, Meitar-Nechmad said. She added that providing extra incentives for giving could also rouse the nonprofit sector – out of approximately 36,000 amutot, two-thirds are inactive.

Israel also lacks a culture that fosters a family legacy of giving – the Meitar family being one notable exception. Again, current Israeli law stands in the way. It does not allow for a foundation to be created or for money to be placed in a donor-advised fund.

All of which makes traveling through that philanthropic intersection all the more perilous.

At least, for now.

“This is a relatively new field in Israel,” Meitar-Nechmad said. “We want to involve many players in Israel. We want to control our money and control our philanthropy.”

Activities at the institute have already begun, including a conference that included JFN members on the policy barriers faced by Israeli philanthropists. Meitar-Nechmad is seeking additional supporters to give the institute a solid footing. So far, about one-third of the $1.6 million sought to run it over the next five years has been raised.