After a successful campaign spearheaded by the New Israel Fund and SHATIL, the Israeli government last week approved a package of measures that will assist the country’s NGOs. As NIF/SHATIL have documented, the global economic crisis and the fallout from the Madoff scandal have threatened the viability and even the existence of many organizations in Israel’s third sector – but in Israel, NGOs had not previously received the special support provided to many for-profit businesses. Many of the measures now approved were submitted to the government in December as part of the NIF/SHATIL Emergency Plan, which outlined a comprehensive approach to ensuring that civil society survives the downturn.

Director-General of the Prime Minister’s Office Ra’anan Dinur unveiled the new assistance package, which will cost the government an estimated $1.5 million, and will be channeled through a newly established Center for Nurturing Social Entrepreneurship.

Presently, a self-employed person or small business only receives a tax incentive for philanthropic donations of $100 and above.  To encourage small Israeli donors, the threshold for tax deductions has been lowered to $75.  To encourage major philanthropists, the donation ceiling for tax deductions will rise from $1 million to $1.875 million.   Additionally, a salary tax of 7.5 percent of income is imposed only on NGOs and represents a significant expense for their budgets. Currently NGOs are exempt from paying this tax on employees who earn less than $21,250 per year. This exemption will be raised to $40,000.

In addition, a committee has been established to investigate ways to enhance coordination between the government and NGOs as well as to remove bureaucratic impediments for NGOs.

The new package does not, however, go as far as NIF/SHATIL requested in the December plan. Eran Klein, Project Manager at SHATIL said, "The program is much less than we expected and what is needed. The sector is in a dangerous situation and if we do not receive the necessary help, the entire country will pay the price." 

NIF/SHATIL will continue to work intensively with the Israeli government for additional measures to assist endangered NGOs.