Why Raising Shekels Will Raise You Dollars

By Dan Tadmor

Happily, the monumental $100 million renewal campaign for the new Museum of the Jewish People at Beit Hatfutsot is approaching its close. Over the course of the campaign, the museum’s various representatives have met with hundreds of potential donors, of every color and stripe, across tens of countries.

Whether or not each interaction led to a philanthropic gift – and most often, of course, it did not – the very process of presenting the museum hundreds of times over has led to a fascinating data set; a portrait of how global donors see the Jewish world today.

The Perception

During the course of these conversations, the following question would arise time and again:

Sure, I’m happy to discuss your project. But let me ask you something. Why are you coming to me? I live thousands of miles away. For years I’ve been told endlessly about the miracles of Israeli technology and the booming economy that it’s created. So why aren’t these guys stepping up to help you?

The perception, it seems, among hundreds of donors in the United States and elsewhere, is that high-net-worth Israelis are under-committing with their own considerable financial resources, and relying too heavily on the continued support of overseas donors.

The Facts

According to a new report from the Central Bureau of Statistics, looking at Israeli giving patterns between 2012-2015, this perception is only partially fair.

In 2015, Israelis gave a total of NIS 5.9 billion, equivalent to 4.4% of the total income of Israel’s nonprofits. Overseas funding, in contrast, totaled NIS 11.3 billion, or 8.3% of total funding. Both philanthropy per capita ($179 per/person) and as a percentage of GDP (0.5%) remain in Israel some distance below the United States ($874 per/person and 1.7% of GDP).

With that being said, in the three years leading to 2015, Israeli philanthropy did grow by 10.3% (as did U.S. philanthropy, by 10% during the same period). Not only did Israeli giving increase year on year, 50% of this increase came from donations above NIS 100,000 (approximately $25,000).

Israelis, then, are increasingly connecting with philanthropy, albeit not yet to American levels.

The Background

The reasons for the continued disparity go far beyond the simple fact there remains a far higher concentration of Jewish wealth in the United States than in Israel.

In essence, when compared with Israelis, Americans (as distinct from Canadians, Europeans and other Jewish communities globally) carry a very different historical understanding of the role that private wealth plays within society at large.

Under the classic American dream, it is American freedom which grants the opportunity for huge financial success. For those who prosper most – the Fords, Carnegies and Rockefellers of their day – polite society expects for private wealth to be re-invested charitably. Free and fair society created the opportunity for great wealth, therefore great wealth should keep society free and fair.

The original Israeli ethos, by contrast, was inherently statist, with government control of everything from public transport to telephone lines. As a result, the great icons of early Israel weren’t benevolent industrialists in the American mold, but poets and political leaders. An Israeli born in 1950 may have dreamed of becoming wealthy, but society – not to mention relative poverty at the time – offered precious little in terms of showcasing the responsibilities of great privilege.

At the same time, and for a multitude of reasons too complex to address here, huge numbers of American Jews came to broadly ‘adopt’ Israel as a philanthropic project. Hundreds of millions of dollars in donations created an addiction, and a complacency, to the American “magic money tree.” This, coupled with the lack of suitable policy incentives – even now Israel has no estate tax – further slowed the development of Israel’s local philanthropy scene.

The Challenge

Today presents a demographically, ideologically and financially different era, in which donors are increasingly – and reasonably – keen to see that local philanthropists are committing their fair share.

This impulse isn’t driven solely by a sense of fairness, it’s about efficiency also. Local funders supply not just funds, but a local support network, improving governance, project execution and marketing functions. Essentially, the buy-in of a top donor in Israel securitizes every dollar donated from overseas. And overseas donors have caught on to this.

The Solution(s)

How then, did we approach this challenge at the Museum of the Jewish People?

Firstly, throughout our campaign, we were able to point to the Chair of the Museum’s Board of Directors, Irina Nevzlin, and her father, Leonid Nevzlin, whose funding and daily leadership have steered the Museum’s step-by-step renaissance over the past decade.

This, it turned out, was a good but not perfect answer. While the Nevzlin family’s magnificent support did come with the credibility of an “American-sized” Israeli donation, the family were leaders of the Museum at every level, not contributors to a campaign.

Additionally, the Museum’s other key Israeli donor has been the Government of Israel, through a generous matching given throughout our renewal period. The ability to point potential donors towards public funding has been critical to demonstrating good governance and institutional clout.

We also took the decision to enact standard American practices, by mandating that every member of the Museum’s board contributes, to the best of their ability, in a personal capacity. This too, proved a partially effective response, but didn’t secure the kind of “transformative” gift needed to satisfy the changing ideological expectations of many international supporters.

Happily however, as of today, we’ll have a new answer when a donor in Palm Beach or Beachwood next asks about major Israeli supporters.

Sami Sagol, one of Israel’s foremost businesspeople and a longstanding and visionary benefactor of science, education and culture, has graciously approved a very significant grant. We are deeply grateful for his support, and hope, naturally, that his foresight leads to further inroads with Israel’s financial elite.

In terms of broad lessons for the wider nonprofit community in Israel, securing the support of a major Israeli donor, while a difficult, competitive and lengthy process, is critical. It’ll strengthen your position with donors globally, force you to refine and improve your case statement, and increase your organization’s diversity.

What’s more, while demographics and attitudes around global Jewish identity are in a state of dramatic change, it’ll set you up for the future, in which local givers will doubtless play an increasingly prominent role.

Dan Tadmor is the CEO of the Museum of the Jewish People at Beit Hatfutsot.