REFLECTIONS ON THE VOLUNTARY NONPROFIT SECTOR IN ISRAEL An International Perspective

RALPH M. KRAMER, PH.D. Professor Emeritus, School of Social Welfare, University of California, Berkeley

This article reflects 25 years of research on the voluntary nonprofit sector in Israel, the United States, and Europe. Although there has been an explosion of interest and research on this sector in recent years, there are still large gaps in the knowledge base. However, what we do know shatters the myth of the voluntary sector's supposed advantages in ser­ vice delivery of cost savings, efficiency, and high quality. It seems that it is more impor­ tant how a service is delivered than by whom it is delivered and that a diversity of types of service providers is preferable to a monopoly by one sector, either government or volun­ tary.

his article marks the 25th year since my VNPOs in many countries, including Israel. Tfirst visit to Israel. It is therefore appropriate now to review the In 1968 I began my first research project evolution and current status of VNPOs, par­ outside the United States: a comparative ticularly in the personal social services, and analysis of community work in Israel and to look at Israel in this broader international the Netherlands. After that project I de­ context. cided to study for the first time in Israel a After first explaining the terminology group of 15 voluntary nonprofit organiza­ used in this article, I describe briefly several tions (VNPOs) serving the physically, men­ major trends affecfing VNPOs in North tally, and sensorially handicapped. Because America and Europe and three unique fea­ of my interest in the fixture of such organi­ tures of the VNP sector in Israel before zations in welfare states, I used Israel as a comparing it with its counterparts in other pilot study for the first cross-nafional com­ countries. The article concludes with impli­ parative study of VNPOs and included simi­ cations of these comparisons for the fiiture lar agencies in England, the Netherlands, of VNPOs in Israel, Europe and North and the United States. America. Shortly after the publication of a book based on this research, I returned to these DEFINITION OF TERMS 15 Israeli agencies in 1982 to study conti­ Because it is in between the state and the nuities and changes during a decade of tre­ market, the VNP sector is increasingly mendous upheavals in Israeli society. My called the third sector. Essentially, it is a last interviews with their executive directors short-hand term referring to a collecfion of occurred in 1988, before I launched an up­ many diSerent types of organizations found date of a 1975 study in England and the in all countries that have these five charac­ Netherlands and also an examination of teristics: similar agencies in Norway and Italy as part of a recently completed book. 1. They have a formal structure. In the intervening years, there has been 2. They are legally independent and self- an explosion of interest and research on governing.

Presented as the Arnulf M. Pins Memorial 3. They do not distribute profits. Lecture, Paul Baerwald School of Social 4. They have some degree of voluntarism, Work, The Hebrew University, Jerusalem, at least in governance, if not in service February 21, 1993. provision.

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5. They are expected to produce a pubhc fessional staff for the delivery of a public benefit. service. Given the broad scope and diversity of In addition, most VNPOs share two func­ VNPOs, does it make sense to speak of a tions: service provision and advocacy. In sector? Is it more than a rhetorical device the latter capacity, they operate as interest or a statistical artifact? The concept of a groups for a cause or a constituency, seek­ third sector may be useful if we remember ing social change and to influence public that it is an abstraction—a convenient sum­ policy. In Israel, as in the Uruted States mary expression—a "guiding metaphor" and the United Kingdom, these fimctions that has implications for social policy. This are usually combined in the same organiza­ is because decisions have to be made re­ tion, in contrast to Europe where they are garding not only who should receive what usually promoted by two different types of pubhc services but also who should finance organizations. and deliver them. Such organizations are typically found in the fields of health care, educadon, social BACKGROUND welfare, culture and the arts, and the envi­ Since the mid-1970s there has been an up­ ronment. Types of organizations in the surge of public interest in North America VNP sector include self-help groups and and Europe in the role of voluntary non­ foundations; civic, religious, political, pro­ profit organizations (VNPOs) as an alterna­ fessional, and trade associadons, as well as tive to government in the provision of pub­ unions. Some examples of VNPOs in Israel lic services. Even in Eastern Europe with are the 18,000 amutot, voluntary tax-ex­ the dismantiing of former Communist re­ empt associations registered with the gov- gimes, there is mounting interest in VNPOs errunent, including about 400 major as a new form of service provider—in be­ VNPOs, many of which comprise the mem­ tween capitalism and socialism—and as a bership of the Migzar Hahitnadvut force for social change, particularly in Po­ Ve 'hamalcarim, the voluntary sector in Is­ land, Hungary, Czechoslovakia, and East rael. VNPOs include such organizations as Germany. In the European cortunuruty, Akim, Yad Sarah, Enosh, and Matav, as there are now many cross-national federa­ well as Wizo, Na'amat, ORT, and Magen tions of voluntary organizations, in addition David Adom. Some would add the large to a proposal to organize a counterpart of public organizations, such as the Jewish the Independent Sector in the United Agency, Hadassah, and Sh'aare Zedek Hos­ States—a membership organization of na­ pitals, and the universities, which are at tional nonprofit social welfare agencies— least nominally malcarim. and plans to "harmonize" the various na­ Despite their great diversity, most tional laws pertaining to VNPOs. VNPOs have the hybrid character of both a Although the relationship between the voluntary association and a service bureau­ state and voluntary associations is deeply cracy. They also have some of the features rooted in history and in political theory, of both governmental and for-profit enter­ there has probably been more public discus­ prises, although they are not part of govern­ sion and research on the role of the volun­ ment, nor do they operate for profit. Al­ tary organizations and the third sector since though there is still no agreement on defini­ the 1970s—when the concept was first in­ tions or classifications among voluntary or- troduced—than in the previous 50 years. gaiuzations, it is possible to make a rough For example, it is estimated that there are distinction between associations and agen­ now over 200 researchers in 40 different cies, depending on the role of the member­ countries, including at least 9 in Israel, who ship and the employment of paid and pro­ are studying this sector. Within the last 5

SUMMER 1994 Voluntary Nonprofit Sector in Israel / 255 years, more than a dozen scholarly books complementary services that are different in have been published, and 20 research cen­ kind. ters have been established in the United In Israel, the first, and still the only States and several in Europe. A new inter­ study of its third sector, was published in disciplinary field in the social sciences has 1985, and it estimated that VNP expendi­ emerged with its own scholarly journals and tures represented almost 8% ofthe gross na­ international conferences. tional product, which was twice its com­ parative size in the United States and the MAJOR TRENDS AFFECTING VNPOS Uitited Kingdom. Over half ofthe social services were provided by VNPOs, maiitiy At the same time there has been a conver­ in health and education, where their em­ gence of three related trends, an increase in ployees constituted 40% of the national la­ the number and type of VNPOs; greater uti- bor force. lizafion of them by government to deliver What accounts for all this activity? Re­ public services, leading to their mutual de­ lated developments in ideology and in social pendency; and a fading of the boundaries policy help explain this increased use of between the public and private sectors. VNPOs by government, both of which are a response to the crisis of the welfare state of Increase in the Number and Type of VNPOs the 1970s, mainly its costliness and rigidi­ Although VNPOs had grown up alongside ties. the post-war welfare states, there was a From the ideological perspective of halt­ takeoff in this sector in the 1980s, with a re­ ing the expansion of the welfare state, there markable growth of all types of third sector has been a rediscovery by both the Right organizations, including self-help groups and the Left of the importance ofthe civil and family and corporate philanthropic society and of the special role of VNPOs as foundations. There was also an increased intermediary organizations, acting as use of volunteers in both VNPOs and gov­ countervailing forces to the power ofthe ernmental organizations. The 1980s have state over the individual in a democracy. been called a "Golden Age" for voluntarism This special role accounts for the absence of because this expansion occurred not only in independent voluntary orgaiuzations in to­ the United States and Britain but also in talitarian countries and the critical impor­ countries differing widely in the scope of tance of their role in countries with very their welfare states and political culture, strong central governments, such as France such as France, Italy, Norway, and Israel. and Israel. In each country, the particular division of On the Right, particularly in England responsibility between government and its and the United States, voluntary organiza­ third sector is rarely formalized, but it re­ tions are seen as a bulwark against further flects a distinctive history and sociopolitical governmental intervention or at least as an context. Yet, they all share a basic percep­ alternative, if not a substitute for it, and as a tion of VNPOs as innovative and flexible; form of privatization. On the Left, these or­ protective of particularistic interests, plural­ ganizations are often viewed nostalgically, ism, and diversity; and able to promote citi­ as a means of recovering a lost sense of zen participation and to meet needs not met community through voluntarism, self-help, by government. Together with government, and other forms of citizen participation. VNPOs may relieve, replace, or reinforce Hence, there are calls for privatization, the primary social systems of family, neigh­ partnerships, and welfare pluralism in En­ bors, and friends. In the public sector, they gland and for empowerment and co-produc­ may substitute for, influence, extend and tion in the United States. In France, social­ improve the work of government, or offer ists and others seek to promote autogestion

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(self-government), and in Italy there has become a more important source of revenue been a significant trend toward for VNPOs than all private giving com­ voluntariato. bined, although this varies in different Both the Right and Left, however, usu­ fields of service. Over half of all federally ally fail to distinguish among different fiinded personal social services are now pro­ forms of voluntarism—^between volunteers vided by nongovernmental organizations. as unpaid staff and as peer self-help—and Sinularly in England, despite the apparent between mutual aid associations, neighbor­ cutbacks in public spending since 1975 dur­ hood or community-based organizations, ing the Thatcher regime, statutory fees and and service bureaucracies staffed by profes­ grants have been the fastest-growing source sionals. This confiision is part of the mys­ of voluntary sector income, almost doubling tique of voluntarism, in which its virtues in amount and as a percentage of total in­ are exaggerated and contrasted with what come in the last 15 years. In addition, in are believed to be the inherent vices of gov- Italy, Spain, and France where the growth erranent or the market. of VNPOs is a very recent phenomenon, there has been a striking increase in their Greater Use of VNPOs by Government utilization and funding by local government from which they receive about 80% of their The second development involves the con­ fimding. vergence of several pohcy streams in Eu­ Why are governments relying increas­ rope and North America conducive to the ingly on VNPOs to deliver the public social greater use of VNPOs to implement public services? The reasons given are usually policy: retrenchment in pubhc spending, lower costs, more flexibility in delivering governmental decentralization, debureau- services that may be highly specialized or cratization, and, particularly in the field of controversial, or as a way of bypassing mental health, deinstitutionalization. onerous restrictions. These tend to be the At the same time, an entity sometimes "real" reasons, whereas the values of called "the contract state" has rapidly voluntarism are often cited as "good" rea­ emerged as VNPOs have been used to de­ sons. The VNP form is also highly attrac­ liver personal social services to an ever­ tive to governments in Israel and elsewhere growing clientele for whom there is govern­ that establish quasi-nongovernmental orga­ mental responsibility. These include the nizations (guangos) and paragovernmental needy elderly, mentally ill or retarded chil­ organizations to operate sheltered work­ dren and adults, the physically handicap­ shops and various forms of residential care ped, abused or neglected children, and oth­ that they can then control. There is still a ers who require personal social services, lack of appropriate concepts, models, and such as day or institutional care, counsel­ theories to describe and explain this inter- ing, and various types of rehabilitation ser­ penetration of the three sectors. vices. It is this use of VNPOs that has been Underlying these developments is a basic the subject of most of my research in Israel, operating principle in public administration Europe and the United States. of separating financing from service provi­ In Israel and in many other countries, sion, which occurs in contracting, and it is the state, through its grants, subsidies, and also the basis of some of the forms of priva­ fee-for-service payments, has everywhere tization. Welfare states vary considerably become a partner, a patron, or a purchaser in the extent to which they separate public of social services. In fact, wherever there is financing from service provision. Imagine a substantial voluntary sector, it is now de­ a continuum with the Netherlands, where pendent on governmental support to a VNPOs are the primary service delivery sys­ greater or lesser degree. For example, in tem, and Sweden, where practically no the United States, governmental fiinds have

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VNPOs are used, at either end. Closer to tive features that have been shaped by its the Netherlands is Germany where well unique history. First, in contrast to most over half the social services are subsidized European and North American countries, by government but provided by VNPOs. the voluntary sector preceded the develop­ Other countries with similar patterns are ment of the State of Israel; it was the first, Italy, Belgium, Switzerland, and Austria. not the third sector in the Yishuv. The England and Norway are closer to Sweden many pre-state voluntary associations—^Zi­ because ofthe dominance of their statutory onist, religious, and trade union—per­ systems, whereas France, Canada, and Aus­ formed a nation-building fiinction during tralia stand between them and Israel and the the 1920s when Palestine was under the United States, which are both closer to En­ British Mandate. Most ofthe fimctions of gland. the network of pre-state voluntary organiza­ Despite the variations in their reliance tions were transferred to the new state and on VNPOs, it is surprising to find that all became its fiiture infrastructure. This trans­ welfare states in the advanced industrial fer has had three consequences: countries have encountered similar prob­ lems in their service delivery systems: the 1. It helps account for the long-term conti­ spiraling of costs, over- or underuse, frag- nuity of social institutions in Israel and mentafion of services, and other obstacles to their remarkable stability in the midst access, accountability, equity, planning, and of the continual turbulence of wars, coordination. At the same time, curiously, mass immigrations, and other major so­ the standards of quality—insofar as we have cial changes. Note, for example, the data other than expenditures—do not seem persistence of the same division of re­ to be markedly different between the Neth­ sponsibility between the state and erlands, Sweden, West Germany, or Swit­ VNPOs in health, education, and day zerland, each of which has sharply different care of preschool children, as well as relationships between government and the absence of a constitution or a na­ VNPOs. This suggests a rather "unthink­ tional health system. able" thought; namely, that the legal "own­ 2. More specifically, the origin ofthe state ership" of an organization—whether it is in the voluntary organizations of the governmental, nonprofit, or for-profit—may Yishuv explains the pervasive not be as important as such organizational politicization of religion, philanthropy, variables as size, age, bureaucratic struc­ and most aspects of the civil society in ture, degree of complexity and profession­ Israel. alization, type of service technology, 3. It also accounts for the anomaly of two sources of income, degree of competition in parallel, powerfiil streams of the external environment, and so forth. voluntarism in a highly centralized and Perhaps how may be more important than dominating state: an intense, sectarian who delivers a social service, although ad­ (Orthodox religious) and a strong secu­ vocates of priva-tization would disagree, lar form of voluntarism. claiming that government has become too big and inefficient and that its fimctions The second distinguishing feature of and expenditures can be reduced most effec­ Israel's VNP sector is that, despite very tively by introducing various market mecha­ sharp ethnic, religious, and political differ­ nisms. We shall return to this argument ences, if not polarization, there is still a later. blurring of the boundaries between public and private, state and society, and church DISTINCTIVE FEATURES OF THE THIRD and state in a centralized party state. It has SECTOR IN ISRAEL been observed by many that there are few The third sector in Israel has three distinc­ nontotalitarian countries where there is so

SUMMER 1994 Journal of Jewish Communal Service / 258 little differentiation between the state and The dominant relationships between the other sectors of the society and where government and VNPOs in Israel typically the state is involved in every aspect of soci­ reflect both collaboration and competition, ety, particularly the economy in which over love and hate, and they could be described one-fourth of the labor force is employed by as "competitive interdependence" or "an­ the government. Israel, an early prototype tagonistic cooperation." They also involve of a mixed political economy, is character­ the typical Israeh patterns of VNPOs "creat­ ized by a complex mingling of public and ing facts" and then expecting the govern­ private fiinds and functions in which the ment to bail them out, which often occurs, boundaries between the state, the market, as well as failures of government to keep its and the third sector are ambiguous. I recall promises of support. once asking a government official how Is­ Although these interorganizational rela­ raeli agencies distinguished between funds tionships are usually described as a partner­ they received from the state and the munici­ ship, a more appropriate metaphor might be palities and those from fees and contribu­ that of a game or a market. The term "part­ tions; he replied, "What difference does it nership" tends to obscure power relation­ make? It all comes from the Jewish ships; after all, there are all kinds of part­ people." Perhaps in this sense, Israel may ners, silent and junior, and Israeli govern­ be an apt illustration of Barry Bozeman's mental agencies are not known for their (1987) claim that "all organizations are willingness to share power! public," according to the degree to which Governmental-voluntary relationships in they are subject to governmental influence. Israel also differ in other ways from those in Yet, despite the pervasiveness of the the United States and the United Kingdom: state and other large public institutions, they are more informal and involve less ac­ such as the Histadmt and the Jewish Agen­ countability. At the same time, among cy, there has still been a great expansion of VNPOs there is much less fear of loss of au­ volunteerism and nongovernmental social tonomy from the alleged controlling and service agencies, interest groups, and foun­ cormpting influence of governmental funds, dations. Although at first it was believed a belief widely held in the United States. that the state did not need nongovernmental Thirdly, Israel's voluntary agencies are organizations to carry out its enormous re­ distinguished from those in other countries sponsibilities, the immensity of the tasks of by their legendary ability to obtain contribu­ immigrant resetdement and defense gradu­ tions from abroad, particularly for capital ally changed the government's attitude to purposes, but also for their annual operating one of encouraging, utilizing, and support­ expenses. This historic pattern of Jewish ing voluntary organizations. As in other philanthropy is so much taken for granted countries, new types of specialized agencies that its exceptional character is insuffi­ have been formed in recent years to deal ciently appreciated. Is there any Israeli or­ with child abuse, battered women, drug ad­ ganization that does not have its "Friends" diction, and specific diseases. To this list abroad? There are also few counterparts to one should add Arab-Jewish co-existence, the UJA, The Jewish National Fund, Israel civil rights, and other causes, such as those Endowment Fund, New Israel Fund, or the supported by the New Israel Fund. Also JDC. typical of the traditional vanguard role of This reliance on both a domestic and a JDC-Israel and its working relationships foreign market for contributions is reflected with the state has been the development of in the fact that Israeli VNPOs seem to de­ community organizations, such as the rive a smaller proportion of their income matnassim, a network of local community from government than similar agencies in centers. European countries where philanthropy is

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much less important. Much of the growth and Israel both have a similar pattem of of many Israeli agencies in recent years religio-political coalitions, they differ mark­ when there has been a reduction in their edly in the role of the state and the sponsor­ governmental fimding and in-kind staffing ship of social services. The Netherlands is has come from their own fimd raising. the best example of "institutionalized priva­ Ironically, Arab organizations in the ad­ tization" in one of the most generous of ministered territories, as well as those in Is­ welfare states where all the social services rael, also rely heavily on contributions from have been provided by over 4000 VNPOs abroad. Another similarity is that some of that receive virtually all their fiinds from the voluntary associations that the Palestin­ the central government and constitute a ians have developed since 1967 might be­ quasi-state. In the last few years, however, come part of the infrastructure of a fiiture in response to rapid secularization and a self-government, comparable to what devel­ change in the power stmcture, the govern­ oped in the Yishuv. ment was able to initiate long-sought There is, however, a dialectical character changes in the financing and in the stmc­ to this dual market for fiind raising avail­ tures of many VNPOs. These changes re­ able to most Israeli institutions, whether sulted in the elimination of over 40 national governmental, public or voluntary, religious agencies, and, by requiring sectarian agen­ or secular. It is a source of great strength, cies to merge in local communities as a re­ but at the same time, it also makes Israeli quirement for fiinding, the government ac­ VNPOs more vulnerable to load-shedding tually reduced the number of VNPOs. and cutbacks by government, which is well Two important lessons about the role of aware of their capacity to tap both a domes­ pluralism in income and in service provi­ tic and foreign market and of their usefiil- sion can be derived from the Dutch experi­ ness as a possible resource to compensate ence. First, from the standpoint of indi­ for any losses in governmental income. In vidual voluntary organizations, it confirms addition, the government may welcome the the belief about the dangers of being depen­ infiision of foreign exchange into the dent on a single source of revenue and of economy. not having a sufficiently diverse income base as is found in Israel, the United States, COMPARISON OF ISRAEL'S VNP and the United Kingdom. The Dutch SECTOR WITH THOSE OF OTHER VNPOs are essentially public agents, at best COUNTRIES quangos, with relatively littie control over their resources and policy. Very few of All countries are alike, and, of course, all these organizations in the Netherlands have countries are different. As Burton Weis- had to develop a fiind-raising capacity on brod (1988) has said: "Each society must their own, and they consequently lacked ac­ find the particular combination of institu­ tive board leadership and constituencies tional forms that suits its needs at a given that might have had some influence in a time." VNPOs are part of their countries' changing political scene. history, but more specifically, they reflect Second, from the broader standpoint of a the various ways that different societies service delivery system, the Dutch experi­ have dealt with social conflicts between the ence shows the disadvantages of a quasi- state and its citizens or the civil society as a monopoly, whether by government or by whole, including organized religion. Be­ nongovernmental providers, compared to a cause of these distinctive histories and insti­ more mixed welfare system as in Israel and tutional structures, cross-national compari­ other countries. Yet, what is of equal sig­ sons may have more value for theory build­ nificance is that even with this form of ing than social policy. privatization—by using the VNPOs as a For example, although the Netherlands

SUMMER 1994 Journal of Jewish Communal Service / 260 substitute for a governmental system—the tant. Netherlands found itself with the same As one would expect, organizations with problems afflicting service delivery systems an entrepreneurial character are found in in other countries: spiraling costs; over- or countries where philanthropy is important, undemtilization; duplication, lack of coor­ such as the United States, Canada, the dination, and other inefficiencies; bureau­ United Kingdom, Singapore, India, and Is­ cratic rigidity, lack of consumer involve­ rael. VNPOs originally emerged with ment, and a technocratic professionalism. greater independence in these countries be­ Based on our recent research in the Nether­ cause they had to develop a variety of in­ lands, my colleagues and I concluded that come sources in a highly competitive, the more one is dependent on the voluntary laissez-faire, and uncertain charity market. sector—the greater its scope and responsi­ In comparing the political or advocacy bilities—the more it will generate the same role of VNPOs in different European coun­ problems identified with the provision of tries, we note that before their rapid recent services by governmental bureaucracies. growth in France, Italy, Spain, and Norway, This is a conclusion that seems to weak­ a centralized state or church limited the de­ en the case for privatization and to strength­ velopment of independent voluntary asso­ en the argument for more diversity among ciations. This helps explain why most of the providers of public services. Among its the VNPOs in predominantly Cathohc other benefits, a mixed pattern of service countries are less than 30 years old. delivery may offer the possibility of en­ Countries with relatively weak central abling empirical comparisons about the per­ governments and corporatist structures, formance of different types of providers, in­ such as Germany and the Netherlands, rely stead of relying on myths and stereotypes on national roof, umbrella, or peak associa­ about the advantages of one sector or the tions to represent the leading interest other. Whatever terms are used, it is appar­ groups in the development of public pohcy. ent that a diversity of income sources, a mix In Germany, the six major Free Welfare As­ of service providers, and pluralism in poli­ sociations constitute a single, massive con­ tics and religion are all conducive to glomerate that dominates the field and has voluntarism. enormous power over social policy, prob­ Each country also has an organizational ably more than in any other country. For culture that is the product of its historical example, the government must first obtain development: how does this influence the their permission if it wants to establish a two major functions of VNPOs as service public social service agency in a commu­ providers and as advocates seeking to influ­ nity. ence social policy? In the space of a decade, VNPOs in Because organizations reflect their envi­ France went from being on the fringes of ronment, it is not surprising to find that Is­ public policy to receiving new funding and raeli organizations are more entrepreneur­ responsibilities for providing social services ial; they have to hustle and "handel" out of and a place in the highest social and eco­ necessity, like their American and British nomic councils. They were also influential counterparts. They are much less like the in introducing and implementing new legis­ more bureaucratic, professionalized organi­ lation in housing and income support. zational structures in Germany and the These gains in political status and power Netheriands, which are heavily subsidized. were due mainly to the support of a key fac­ Relationships to government in these Euro­ tion in the Socialist Party in the early pean countries are generally more formal­ 1980s, and they contrast with the absence of ized and regulated than in Israel, and also effective linkages to pohtical parties by the boards of directors may be less impor­ most other European VNPOs.

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The weak poHtical influence of the Ital­ tive government, France, Italy, Spain, and ian and Israeli VNPOs and their relative the Netherlands, to rethink their costly so­ marginality in public policy reflect the ab­ cial programs. It is now generally accepted sence of a structured role for them as found that an era of unlimited expectations of in Germany, Norway, and the Netherlands. state responsibility has ended. Hence, it is Yael Yishai (1990), in her recent book on widely acknowledged that the state will be interest groups in Israel, has noted the lack more of an enabler, rather than a doer or di­ of congruence in their use of various lobby­ rect provider of social services, with greater ing strategies and forms of protest found in emphasis on financing, planning, priority more pluralist societies, such as the United and standard setting, and on regulation. States and United Kingdom, but which are The last question I want to consider is less effective in a political system that is not not whether there will be a greater use of so dependent on nonparty constituencies. nongovernmental organizations and more, Although a large number of interest groups closer, interdependent relationships with in Israel have access to government, few of government but rather what will be the con­ them claim any significant influence. sequences for the service delivery system and its clients, for government, and lastly IMPUCATIONS FOR THE FUTURE for VNPOs? What have we learned about the effects of the closer involvement of gov­ Despite the differences in their sociopoli­ ernment and VNPOs in recent years? tical contexts, VNPOs in Israel, Europe, As one might expect, there are advan­ and North America face a common future of tages and disadvantages, costs and benefits having to do more with less. Yet, even in to that closer involvement. Based on some an era of more limits on public spending, ofthe experience in the United States, the VNPOs and governments will still need and United Kingdom, and several European depend on each other more than ever. There are many forces pushing govern­ countries, we can conclude that diversity ments toward VNPOs, such as the pressures among service providers is preferable to a for privatization that seek to promote a monopoly by either sector. Yet, there are wider use of nongovernmental organiza­ the inevitable tradeoffs. Although the sub­ tions as a means of reducing public social stitution of multiple providers of public ser­ welfare spending. This belief is, however, vices for government can bring about better misguided. There is no consistent empirical access and services for some persons, at the support for the assumption that long-term same time when responsibility is so divided, savings can be obtained through the use of there may be less likelihood of achieving nongovernmental social service providers or the social policy goals of equity, entitie- that the private sector has the resources to ment, and accountability. Other trends that take over a wide range of governmental have been noted include the phenomenon functions, as the Reagan administration as­ known as "creaming" in which the VNPOs sumed in the United States. exercise discretion in selecting the less dif­ ficult and costly cases, leaving the more in­ Although no country has found a practi­ tractable and expensive cases for govern­ cal replacement for public financing of the ment. In addition, many believe that the social services, this responsibility in the years ahead will probably be modified be­ extensive use of VNPOs could also weaken cause welfare states are all under an unpar­ the sense of collective responsibility for alleled strain. A combination of aging dealing with social problems that has been populations, rising medical costs, persistent characteristic of the welfare state and thus unemployment, budgetary crises, and eco­ could fijrther reduce the resources available nomic stagnation has forced countries, such to the less affluent parts ofthe population. as Sweden, which elected its first Conserva­ Most researchers who have tried to study

SUMMER 1994 Journal of Jewish Communal Service / 262 the comparative cost effectiveness of differ­ come more formalized and professionalized. ent types of service providers have reluc­ They will have to confront, as have the tantly concluded that no sector is consis­ VNPOs in the United States and the United tently superior. They have found, for ex­ Kingdom, the twin hazards of entrepreneur- ample, more cost differences in the residen­ ialism and vendorism: that is, of becoming tial care of children or the aged within a more like a commercial or a governmental sector than between them and that generali­ organization, notwithstanding the fact that zations about one type of service or a social each type of orgatuzation has certain policy are not necessarily applicable to oth­ strengths. ers. If the United States and the United King­ As to what difference it makes to clients dom are harbingers of a "New Age" of whether a service is provided by a particular high-performance organizations in the so­ type of provider, there are practically no cial services, then there will probably be data for making valid or reliable generaliza­ greater expectations in Europe and Israel tions. We return again to the supposition for more accountability, efficiency, and ef­ that how may be more important than fectiveness. Meeting those expectations whom. will require much more attention by VNPOs For government, the greater use of to three elements: VNPOs can result in more flexible adminis­ tration and possibly lower costs, but only in 1. The type and quality of executive lead­ the short run. The delegation of service de­ ership will need to be improved in ac­ livery does not, however, lessen governmen­ cordance with some of the principles tal responsibility for assuring public ac­ developing in the new programs of pro­ countability. Indeed, by increasing its de­ fessional education for the management pendency on external providers, govern­ of VNPOs in the United States and the ment has an even more difficult task. In United Kingdom. general, the record of most governments for 2. There will need to be more use of stra­ monitoring the performance of its contrac­ tegic planning whereby organizations tors is not encouraging, as evident in the review and clarify their mission and annual reports of the m 'vaker ha 'medinah. purpose, determining what it is that Office of the Inspector General of the State they can do that is different or better of Israel. Some of the dilemmas in securing than for-profit or governmental social accountability were epitomized for me in service agencies. Are they really more the reply of an official to my question as to flexible, responsive, and innovative, as why the government seemed to require so has usually been claimed, or is this too little information from the VNPOs it part of the mystique of voluntarism? fiinded: "If we knew more, we'd have to 3. This "New Age" will require more pay more." interorganizational collaboration, both Finally, the effects on VNPOs of being a within the third sector and between public service provider vary according to VNPOs and government as a means of their field of service, the type of clientele adapting to the increased scarcity, com­ and their problems, the size of the organiza­ petition, and uncertainty in the social tion, its age, and other such variables. It service world. makes a big difference whether the organi­ zation is Magen David Adom or Shema. It These considerations suggest a host of criti­ is likely that, like their counterparts in the cal questions. How can VNPOs compete United States, the United Kingdom, and the with for-profit enterprises and not lose their Netherlands, Israeli VNPOs will grow distinctive nonprofit character? How can somewhat in size and complexity, and be­ VNPOs preserve their traditional role as al­ ternative organizations, supplementing and

SUMMER 1994 Voluntary Nonprofit Sector in Israel / 263 complementing government, while not be­ Gross, A. (1991). Israel. In A. Evers and I. coming a public agent, a cheaper substitute Svetiik (Eds.), New welfare mixes in care for the state? How can they cope with the for the elderly, Vol. 2 (pp. 83-96). Vienna: tendencies of some governmental agencies European Center for Social Welfare Policy to, as they say in Britain, "hive off" their re­ and Research. sponsibilities? How can VNPOs maintain Jaffe, E. (1991). Israel: State, rehgion and the their identity, flexibility, and discretion—as third sector. In R. Wuthnow (Ed.), Between well as their advocacy role—^when they are states and markets: The voluntary sector in mainly public service providers? comparative perspective (pp. 189-216). It would be encouraging if we had better Princeton, NJ: Princeton University Press. answers to these questions, but there are, re­ Kramer, R. (1981). Voluntary agencies in the grettably, very litfle data on which to draw. welfare state. Berkeley, CA: University of Few researchers in the social sciences or in Cahfomia Press. the helping professions have been interested Kramer, R. (1984). Voluntary agencies and so­ in learning what enables some organiza­ cial change in Israel 1972-1982. Israel So­ tions to grow and prosper or to discover cial Science Research, 2(2), 55-72. what strategies are effective in adapting to Kramer, R. (1987). Voluntary agencies and the changes in their fiscal environment. personal social services. In W. W. Powell, We do know a litde more now than 35 Jr. (Ed.), The nonprofit sector: A research years ago when an eminent polifical scien­ handbook (pp. 240-257). New Haven: tist could only say about nonprofit organiza­ Yale University Press. tions that "they must tolerate a great deal of Kramer, R. et al. (1993). Privatization in Euro­ foolishness if they are to survive." Yet, pean welfare states: A comparative study there are still large gaps in our knowledge of organizational behavior in the third sec­ base, and there is a significant need for the tor. Armonk, NY: M. E. Shaipe. development of more and better knowledge Loewenberg, F. (1991, Winter). Voluntary or­ in this new interdisciplinary field of studies ganizations in developing countries and co­ ofthe third sector and its voluntary organi­ lonial societies: The Social Service Depart­ zations. If we are concerned about the fix­ ment of the Palestine Jewish community in ture of the welfare state, then we shall have the 1930s. Nonprofit and Voluntary Sector to think more seriously and learn more Quarterly, 20(4), 415-428. about the capabilities and limitations of vol­ Rein, M. (1989). The social structure of institu­ untary organizations as we approach the tions: Neither pubhc nor private. In S. 21st century. Kamerman and A. Kahn (Eds.), Privatization and the Welfare State (pp. 49- REFERENCES AND SUGGESTED 72). Princeton, NJ: Princeton University READINGS Press. Roter, R., Shamai, N. & Wood, F. (1985). The Anheier, H. K. & Seibel, W. (Eds.). (1990). nonprofit sector and volunteering. In Y. The nonprofit sector: International and Kop (Ed.), Israel's Outlay for Human Ser­ comparative perspectives, Berlin and New vices, 1984 (pp. 181-235). Jerusalem: The York: de Gruyter. Center for the Study of Social Pohcy in Is­ Bozeman, B. (1987). All organizations are rael. public: Bridging public and private orga­ Weisbrod, B. (1988). The non-profit economy. nization theories. San Francisco: Jossey- Cambridge: Harvard University Press. Bass. Yishai, Y. (1990, Fall). State and welfare Gidion, B., Kramer, R., & Salamon, L. (Eds). groups: Competition or cooperation? Some (1992). Government and the nonprofit sec­ observations on the Israeh scene. Nonprofit tor: Emerging relationships in welfare and Voluntary Sector Quarterly, 19(3), states. San Francisco: Jossey-Bass. 215-236.

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