November 27, 1997 | Read Time: 4 minutes
As Israel nears the close of its 50th year as a nation, more and more of its North American supporters are becoming alienated by the Israeli government’s resistance to the peace process and by the continued calls of ultra-Orthodox groups to limit the definition of who is to be considered a real Jew.
Consequently, Jewish donors the world over are asking themselves hard and even painful questions — and they are re-evaluating their relationship with Israel. Some are cutting their money off altogether, while others are placing more restrictions on the use of their donations. Those changes could have sapped the strength of Jewish philanthropy, but they have instead done just the reverse.
With the disappearance of the blank-check relationship, Israeli non-profit groups have begun to understand that in order to receive money, they must manage their budgets carefully, provide useful services, and be accountable. In other words, American-style efficiency is finally entering the Israeli philanthropic world.
For non-profit groups in Israel, that has been a much-needed development. The Israeli government’s Not-for-Profit Registry requires only that non-profit organizations submit an annual financial statement. Other mechanisms of accountability have been virtually non-existent.
To win support from discriminating North American donors, however, many non-profit groups have moved beyond government standards and begun to hire organizational consultants, map their goals and objectives, install boards, and undergo voluntary annual financial audits by certified public accountants. Such actions have resulted in improved effectiveness and efficiency.
At the same time, as Israel becomes a wealthier society, indigenous philanthropic institutions are beginning to appear, and tzedakah, the Jewish tradition of charitable giving, is re-emerging. What’s more, a strong push for reform in tax laws to encourage even more corporate and private giving is gaining momentum.
But the methods and strategies of Israeli giving are still relatively primitive. Giving is generally limited, based on undefined criteria and strategies, and lacks the mechanisms of accountability necessary to develop a culture of responsible philanthropy. Thus, it is up to Israel’s foreign benefactors to push Israeli businesses and non-profit groups even further in their efforts to become efficient and effective.
That means not only more careful evaluation of organizational structure and program efficiency, but also more scrupulous investigation of an organization’s mission. Since philanthropic donations will no doubt continue to shape Israeli society, it is incumbent on North American philanthropists to seek out and support those organizations that best match their vision of how Israeli society should develop.
That has not always been the case. For example, the majority of current supporters of some of Israel’s ultra-Orthodox religious movements are philanthropists from overseas, and many are from more-liberal branches of organized Judaism. They are infuriated and deeply hurt to see money that they had hoped would be used to build a tolerant society being used instead to exclude those who don’t follow Orthodox doctrine from taking part in some aspects of Israeli life — including religious conversion and participation on local religious councils, which allot money to community groups.
Such exclusion is seen by many North American donors and philanthropists as a challenge to their legitimacy as Jews. As a result, donors are already trying to exert more control to make sure their donations are being well used.
Most American philanthropic dollars entering Israel traditionally have been managed by the Jewish Agency, which is connected to Jewish federations across the United States and Canada. Unlike in the past, Jewish federations in cities such as San Francisco, New York, and Detroit have begun to hire permanent independent representatives in Israel to monitor the use of their cities’ funds and to screen potential grantees. The same is true of a number of private foundations.
Those liaisons allow donors to better understand their grantees and the political, social, and economic conditions in which grantees function. They also allow recipient organizations to have a better sense of the concerns and interests of donors.
The result is a dramatic shift in the relationship between donor and grantee. No longer are donors distant patrons, content with a “thank you” or a smile from their grantees. Now, they must be true partners.
As Israel struggles to undo the hopelessness that is rampant in the country, such a shift can only be a positive development. The more wisdom that foreign donors invest in the use of their funds, the more the Israeli non-profit and philanthropic environment will improve — to the greater benefit and satisfaction of all.
Robert Fenton and Yonatan Gordis are directors of Yesod Resource Management, a Jerusalem consulting firm that provides services to individuals, foundations, and Jewish federations involved in philanthropic activities in Israel. They can be reached at yesod@compuserve.com.
