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Charity Begins at Home...
Tom Sawicki
Israel is undergoing a philanthropic revolution - with the wealthy dipping deeper, and the government preparing tax breaks to encourage smaller donors
It was an evening that donors and fundraisers abroad would have found familiar. In an elegant Herzliyah home, dozens of Israel's wealthiest gathered for dinner. As they ate, polished spokespeople for a hospital, a school for handicapped children and a new soldiers-aid group described their institutions' accomplishments - and praised those present who had written checks.
Invitations to the dinner, at the home of industrialist and real-estate developer Yuli Ofer and wife Rutie, were also sent to major Diaspora philanthropists - many of whom were in the country for a Jewish Agency meeting. But only a handful turned up. "We didn't come to Israel to be hassled for more donations," explained one philanthropist. "The Agency takes up enough of our time."
But the Diaspora absentees had missed the point. The aim of the evening was not to shnorr, but to introduce the visitors to a little-known and fast-growing phenomenon: Israeli philanthropy. Had they attended, the Diaspora invitees would have been able to divest themselves not of more cash, but of a common misconception among Jewish donors abroad - that Israelis don't give.
The institutions represented at the dinner - Kfar Saba's Meir Hospital, the Beit Issie Shapiro home for disabled children in Ra'ananah, and the newly organized Soldiers' Day campaign - had one thing in common: a substantial part of their funding is raised through donations by Israelis.
Indeed, half of the money raised for Israel's voluntary health, welfare, cultural, and educational bodies, and for civic and advocacy groups here, comes from the pockets of Israelis themselves. Local donations for such institutions hit a record $71 million last year. And that figure doesn't include millions more raised through numerous one-time campaigns for children needing transplant operations abroad, or the $3.7 million that Israelis gave last year in a matter of weeks for Rwandan refugees -proportionally equivalent to raising $170 million in America. Nor does it include an estimated $20-30 million that Israelis give annually to hundreds of informal or unregistered charities - including the many in the ultra-Orthodox community.
Extraordinarily, in a country where almost nothing stays hidden for very long, the level of Israeli giving has somehow managed to remain a near-secret. How else to explain Jewish Agency chairman Avraham Burg's focus, during his campaign for the position earlier this year, on the need to create "a culture of giving" in Israel, and to set up Israeli Appeal along parallel lines to the United Jewish Appeal? Burg, too, agreed one of the guests at the Ofers earlier this summer, need only have called in for dessert to learn that Israelis are far ahead of most other Westerners in giving to the needy, behind only the Americans and Britons. And apparently unbeknown to Burg, efforts to centralize Israeli philanthropy through a UJA-style body have been taking shape for two full years.
In fact, say both fundraisers and academic experts, the culture of giving is becoming so well entrenched that, over the next five years, Israel is set to undergo a philanthropic revolution. By the year 2000, Israeli versions of America's United Way and Jewish community federations are expected to be allocating tens of millions of dollars to everything from hospitals, to university scholarship programs, athletics clubs and museums. Government funding in many of these areas is already being cut back, and will continue to drop. Private philanthropy will make up the shortfall. The government's contribution will be to institute tax reforms to make philanthropy a more attractive proposition. Some changes are already in the administrative pipeline.
Crucially, however, the upsurge in Israeli giving is unlikely to reduce the need for Diaspora philanthropy, experts indicate. Foreign funding will still be vital to the work of the Jewish Agency (mainly to cover immigration), the Jewish National Fund (to develop Israel's natural resources), major museums, private hospitals and universities.
Israel has a strong tradition of tzedakah, volunteerism, and mobilizing for national causes. Hospitals, educational and cultural institutions have for decades had active groups of local supporters. Among prominent public figures leading such efforts are Leah Rabin (the prime minister's wife), who heads a group for autistic children, and Suzy Eban (wife of the ex-foreign minister), who chairs an organization aiding cancer patients. And philanthropy isn't restricted to high society: The Tel Aviv franchise of Hard Rock Cafe donates a percentage of its profits to environmental groups; Israel's growing network of women's shelters is funded substantially through thousands of small donations from working- and middle-class families.
According to a just-completed study by Ben-Gurion University professor Benjamin Gidron, voluntary organizations here receive 12 percent of their funds from donations, half of which are raised locally. The remaining funds come from government grants and fees for services. Among Western countries, only the United States and England can claim a higher share of philanthropic income for such groups.
Many big givers are hardly known to the public. The Ofers, for example, keep their charity work out of the headlines - only attracting some unwelcome publicity earlier this year when Yuli Ofer paid a fine for having tried to write off a 1989 political donation. As the chair of Operation Social Development, established last year, Ofer has been one of the catalysts of the new wave of giving by Israel's richest families, recruiting dozens of friends and business associates in the past 18 months, and pledging millions himself.
In contrast to major donors abroad, Israeli big givers generally get little recognition, says Ami Bergman of the American Jewish Joint Distribution Committee's Israel office. "In the U.S., you become a leader in the community by giving, and you're feted for it. Philanthropy is a vital measure of one's Jewishness. In Israel, except for a plaque in memory of a loved one, there's little to motivate someone to give. You simply have to be convinced that it's the right thing to do."
With rising needs, Bergman believes, that's not enough. To promote giving, he is encouraging philanthropies to run organized campaigns and hold events honoring big donors, with cabinet ministers or other prominent figures on hand.
That's hardly the only change expected in local giving. If plans underway today are realized, Israelis will soon be asked to give to a single national campaign, based both on the Jewish federation approach and the United Way, America's largest fundraising organization.
Organizers of the project - sponsored by the UJA, United Way and JDC - imagine the following scenario: At a high-tech firm in, say, Haifa, software engineer Nimrod Cohen attends a department meeting, where his boss urges him to allocate a set percentage of his salary to be withheld for the national campaign. His income tax withholding will be adjusted accordingly, he is told, with each shekel given worth a 1.35 shekel deduction. Following the United Way approach, the boss cajoles staffers into giving as much as they possibly can, promising that the company itself will more than match their combined donations,and encouraging them to help the firm gain a reputation for outstanding philanthropy.
At another firm, the speaker could be a union representative. The self-employed, meanwhile, will be approached through their professional organizations, or telephoned by friends volunteering for the campaign, UJA-style. The national campaign will then divide the funds between hundreds of voluntary groups in both the Jewish and Arab communities.
The as-yet unnamed campaign, tentatively scheduled for a launch by the end of the decade, should significantly expand giving in Israel, says coordinator David Epstein. The aim, he stresses, is not to reproduce the United Way here, but to create a version tailored to local conditions. Work began earlier this year, following a feasibility study last year. "United Way has already helped establish such campaigns in 26 countries," Epstein notes.
A major hurdle that both the new effort and existing philanthropies face is a tax structure they say does not encourage giving. "At present the incentive to give is very limited," says Epstein, "because the government is afraid of losing revenues."
U.S. tax laws, for example, permit individuals and corporations a 100-percent tax deduction when contributing to legally recognized charities - with no ceiling. Israeli tax law currently allows a 35-percent tax deduction for individuals and corporations - on condition that their total annual contributions do not exceed 327,000 shekels ($109,000), or 30 percent of their annual gross income. So if an American gives $50,000, that's how much he or she writes off. An Israeli, though, can deduct only $17,500 for the same donation. And the maximum Israeli deduction is $38,500 - even for someone who gives a million.
Epstein and the New Israel Fund are among those lobbying hard to change all that, and to persuade the government to recognize more voluntary groups as tax-exempt charities. As matters stand, hardly any civil-rights, social justice, or advocacy organizations are eligible.
For example, the New Israel Fund - which gives most of its funds to human-rights and women's organizations, and groups working for Jewish-Arab co-existence - is recognized as a charity in the U.S., but can't offer tax credit to Israeli donors. "It's absurd," fumes the NIF's Israel director Avinoam Armoni.
Armoni charges that the Finance Ministry, which grants tax-exempt "public institution" status, has a vested interest in limiting the number of organizations that receive it, in order to keep down tax deductions. That narrow interest, he says, should be put aside for the greater good.
Still, there is already some light at the end of the tunnel, with the tax authorities apparently committing themselves to helping small givers. Tens of thousands of Israelis give small donations to a variety of causes. But most salaried Israelis, who have income tax withheld from their paychecks, aren't required to file annual reports - and rather wouldn't, because they fear contact with the local version of the IRS. "So they never bother to file for deductions," Epstein says. "And many others don't give at all." Now, he says, the authorities have promised to create a way for small givers to have tax deductions incorporated directly into their paychecks.
What's more, in a recent letter to Epstein, the Income Tax Authority agreed in principle to nearly quadruple the tax deduction on charitable contributions. If approved, this change would mean that a worker who gives 100 shekels, will be able to deduct 135 shekels from his taxable income - a massive subsidy for charity.
That kind of benefit could be the catalyst to boost the strong, albeit little-known, tradition of giving in Israel into overdrive.
1995
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© The Jerusalem Report 1999-2000 |  |