Philanthropy can Improve the Welfare of Israelis – here’s how

By Shavit Madhala and John Gal

Well-informed philanthropy starts with … you guessed it: getting informed.

How many nonprofit organizations in Israel work on welfare issues and which populations do they serve? What percentage of organizations serve the Haredi (ultra-Orthodox) population? The Arab Israeli population? What are the organizations’ primary sources of funding? And, what is the role of philanthropy in the field?

We had the same questions and recently published a study that maps out Israel’s welfare nonprofits, including the scope of these organizations’ activities, their level of revenue and sources of funding, their defining characteristics, and the target populations they aim to reach. Along with our colleague Dr. Michal Almog-Bar from the Center for the Study of Civil Society and Philanthropy at the Hebrew University of Jerusalem, we at the Taub Center for Social Policy Studies in Israel analyzed 748 organizations working in the field of welfare with budgets above NIS 500,000. We examined their 2013-2016 financial reports which are available on the “GuideStar Israel” website.

What we found, in short, is that about one-fifth of these welfare organizations serve the general population, about one-fifth work with children and youth, and the remainder focus on specific populations such as people with disabilities and the elderly. 23% of the organizations primarily serve the Haredi sector while 7% mainly serve the Arab Israeli population, though the revenue of the latter organizations accounts for a disproportionately low share of the total revenue for all the organizations. We also found that the vast majority of government funding to welfare nonprofits goes to organizations with an annual revenue of over NIS 10 million and to more longstanding organizations. While most organizations providing services to working-age adults do not receive any government funding, many of those dealing with people with disabilities, yeshiva students, the elderly, and children and youth do (more than three-quarters of the organizations in each of these categories receive government support).

Where does philanthropy fit into the picture?

Philanthropy isn’t the primary source of revenue for welfare nonprofits in Israel – the main sources are the provision of services (39%) (often to the government) and direct government funding (34%) – but it does play a substantial role in social service delivery. Funds collected by welfare nonprofits from philanthropic donations in Israel and abroad increase Israel’s annual spending on welfare by 28% – from NIS 12 billion to NIS 15.54 billion.

Furthermore, philanthropic donations could help to fill in the gaps where government funding is low. While large and longstanding organizations can have many advantages, and it is understandable why the State puts so much funding in the area of welfare into supporting them, the need to diversify services, innovate, and provide solutions adapted to particular population groups requires the support of and investment in smaller and newer organizations as well.

Currently, however, half of donations to Israeli welfare organizations go to the 10% of organizations with the largest budgets, indicating a need to encourage philanthropy for smaller and younger organizations.

There are also large gaps in donations across sectors. Only about 2% of donations go to Arab Israeli organizations, while the share of donations received by Haredi organizations is relatively high – 30%. Organizations that serve Arab Israelis also lack volunteers – an important resource that enhances the capacity of welfare organizations.

Despite existing social gaps between the Arab Israeli and Jewish sectors – and an overrepresentation of welfare needs within Arab Israeli society – welfare organizations focusing on this population group are underrepresented (the share of Arab Israeli organizations is lower than this sector’s share of the total population). These findings indicate a need to strengthen the civil society organizations in the Arab Israeli sector so as not to further increase the existing social gaps between Jewish and Arab Israelis.

Philanthropy is a key tool in providing for the welfare needs of Israelis. But, when using this tool, it is important to have a true understanding of the “lay of the land” – that is, of the current distribution of funds and activities among different types of organizations. Armed with this knowledge, philanthropic organizations can work to improve the lives and welfare of Israelis.

Shavit Madhala and John Gal are researchers at the Taub Center for Social Policy Studies in Israel. The study discussed in the article was conducted in collaboration with the Center for the Study of Civil Society and Philanthropy at the Hebrew University of Jerusalem.