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Saving Civil Society: New Israel Fund, Israel’s NGOs and the Economic Crisis

19 December 2008

Washington/Jerusalem: As the global economic crisis deepens, Israel’s non-profit sector is facing a crisis.  Many NGOs have already drastically cut their budgets and some are worried about keeping their doors open.  Representing a significant segment of Israel’s GDP, the nation’s NGO sector amounts to more than $20 billion annually and is comprised of thousands of organizations employing about 250,000 people. These organizations serve a central role in representing communities and populations, promoting their civil and human rights and allowing their voices to be heard. They are an important source in the provision of health, welfare and education services, and play a significant role in shaping policies that benefit all the country’s residents.

The New Israel Fund (NIF), the leading organization advancing social change in Israel, along with its action-arm SHATIL, have responded to the current crisis with innovative new plans designed to provide immediate hands-on assistance to this vital sector, as well as taking the lead in advocating for government support. Several months before the Madoff scandal elevated the problems in Israeli philanthropy to a front-page story, the New Israel Fund recognized that the viability of the entire sector was jeopardized.

NIF’s CEO Larry Garber noted: “NIF’s role in these circumstances is essential.  In addition to promoting government action, we must ensure that the economic crisis combined with the political vacuum does not decimate those who advocate for progressive values.”

In October, NIF began implementing a new program providing emergency grants and expanded consulting services to social change organizations in danger of failing.  To date, NIF has approved 15 emergency grants and the SHATIL team has advised more than 60 organizations regarding various options for addressing the current crisis.  In addition to individual consultations, trainings and joint strategy sessions, SHATIL has created an Internet hotline with experts on organizational, financial management and development matters that is available to beleaguered NGOs on every business day.

NIF also has submitted a crisis-response plan to the government, which calls for the establishment of a $60 million emergency fund administered by NIF to award grants and bridging loans to organizations in difficulties. The plan also calls on the government to help NGOs as part of its fight to combat unemployment.  The plan’s specific proposals include:

  • Reducing the 7.5% employees salary tax, imposed uniquely on NGOs, to 4%;
  • Allowing NGOs to offset VAT (sales tax) from their expenditure as happens in the business sector;
  • Increasing the tax benefit ceiling for donors from the current NIS 4 million to NIS 10 million;
  • Increasing government support for NGOs by 25% in 2009;
  • Lowering municipal taxes for NGOs;
  • Preferential treatment for NGOs in government service contracts.

“An active, vital civil society is the foundation of a democratic society,” Eran Klein, Budgetary Director of SHATIL notes, “and it is imperative to aid these organizations during a time of crisis.  Government assistance is not a substitute for comprehensive efforts by the NGO sector to become more efficient, but assistance is critically important in preventing the wholesale collapse of many organizations upon which much of the country depends for representation and services.”
For the NIF/SHATIL proposal for government support for NGOs, please click here.

The New Israel Fund is the leading organization advancing progressive, democratic change in Israel.  Since 1979, NIF has provided more than $200 million, funding and founding the most important Israeli nonprofits fighting for human rights, social justice and religious pluralism.

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