FUND RAISING IN ISRAEL The Art of the State

ELIEZER D. JAFFE, PH.D. Paul Baerwald School of Social Work, The Hebrew University of Jerusalem, Jerusalem, Israel

Fund raising within Israel for the thousands of Israeli voluntary and nonprofit groups is becoming a very sophisticated profession. A number of organizations offering con­ sultative and technical services have grown up during the past decade. Only recently has private philanthropy come under serious study, which should influence the future direc­ tion of private sector involvement in Israeli society.

ver since a small percentage of Jews associations are formally registered with E returned from the Diaspora countries the government. They cover every imagi­ to which they were dispersed after the nable area of social activity in Israel and destruction of the first Temple (587 BCE) constitute a major social and economic and second Temple (70 CE), the Diaspora sector in Israeli society (Eisenstadt, 1956, has played a vital role in fund raising for Jaffe, 1985). thejewish homeland. For many centuries, In 1987, 8% of Israel's gross national the "returnees" were nurtured economically product was expended by the nonprofit and often spiritually by the Diaspora Jewish sector, representing one-third of private communities that flourished abroad. These and public consumption. This sector em­ religious-kinship ties have remained strong ploys 11 % of the entire Israeli labor force throughout the years, becoming even and 40% of those employed in public stronger when the physical and economic services. How do these organizations sur­ survival of Jews in the homeland was threat­ vive? Where do they obtain their resources? ened. Ongoing fund-raising activities for How does one determine which are more the homeland became a major part of in- "fit" to survive than others? What is the stitudonalized Diaspora activity and played role of government with regard to funding a primary role in defining and distributing the nonprofit sector? What is the role of status of Diaspora leadership. The scholar private philanthropy in Israel and abroad? as leader of the Jewish community has What is the relationship of private corpo­ been replaced by the philanthropist as rations to the nonprofit sector? These are leader (Jaffe, 1987). only a sampling of questions for serious In the twentieth centtiry, Diaspora fund- research in Israel by scholars from various raising activities have been supplemented disciphnes, quesdons that have only recendy by widespread voluntary and fund-raising become identified as important areas for efforts within Eretz Yisrael itself. These study and systematic discussion (Gidron, efforts, supported by self-taxation, began 1980; Haviv & Kop; Katan, 1973; Kramer, during the British Mandate period before 1984; Leron & Spero, 1980). the state was created. After a short lull This article describes some of the basic following statehood, a multitude of indig­ methods used by nonprofit groups in Israel enous self-help, nonprofit, private sector to secure fiinding for their programs and organizations developed to provide services organizations. Fund raising has become and press for social change. According to more than an art in Israel. Fund-raising the Ministries of Finance and Interior, to­ seminars (for profit) are widely available, day, thousands of voluntary and nonprofit and a corps of fund raisers, community

338 Fund Raising in Israel I 339 organizers, public relations experts, and tional, and medical projects. Foreign gov­ employees is emerging in Israel that is no ernment aid has played a major role in longer limited to a handful of universities, Israeli social services and research. hospitals, museums, and women's child In general, the basic fund raising tech­ care organizations. Fund raising in Israel niques utilized in Israel today are very has begun to harness science to its cause, similar to those used abroad. These opera­ borrowing theory from economics, psychol­ tions are conducted directly by the Israeli ogy, sociology, psychiatry, anthropology, organizations or by their agents abroad, and political science and using experience, using salaried staff or volunteers (New wisdom, and knowledge from the fields of Israel Fund, 1987). business administration, marketing, man­ It is important to note that no reliable agement, computer science, social work, data exist on the amount of foreign phi­ public relations, and theology. Fund raising lanthropy received by Israel each year. This is becoming a very sophisticated profession is a formidable research undertaking since in Israel, and as interdisciplinary knowledge the number of conduits, recipients, donors, is brought to bear on the subject, it will and amounts forwarded are almost impos­ influence to a great degree the nature of sible to measure. Many of these funds are social services and private sector involve­ direct donations that are untaxed, uncon­ ment in Israeli social policy. trolled by government agencies, and unre­ Any discussion of fund raising for Israeli ported. The ultra-Orthodox Jewish com­ organizations must differentiate between munity is only one example of a vast, activity undertaken in Israel and that un­ complicated network of fund raising activity dertaken outside of Israel. Most Israeli about which relatively little is known and organizations attempt to tap both of these hardly anything is written. "markets," depending on a number of variables. Major sources of foreign income for nonprofit organizations are the Amer­ FUND-RAISING SOURCES ican United Israel Appeal (1987), which The following partial listing of fund-raising brings to Israel approximately $350 million sources is not relevant to all organizations. annually; the Israel Bonds Organization, Some nonprofit organizations use various which brings in nearly $600 million each combinations of sources, others hardly any year; and Keren Hayesod, which raises at all. Research is welcome, therefore, to about $150 million annually. These funds determine what variables determine the are generally locked into the various depart­ various fund-raising methods or portfolios ments of the Israeli recipient or conduit used by different organizations. For exam­ organizadons, i.e., Jewish Agency, World ple, how do the characteristics of size, Zionist Organization, and Israel Bonds, goals, populations served, sponsorship^ Inc. (Jaffe, 1981). Some of these funds, annual budget, or location of the organi­ however, find their way to external, non­ zation affect fund-raising methods and profit service-providing organizations. fund-raising success or failure? Foreign governments also provide sig­ nificant funds for nonprofit groups. The American AID program is one example Direct Solicitation Strategies and requires a sister organization in the • Membership dues United States that solicits funds for its • Personal face-to-face solicitation of dona­ Israeli counterpart (usually for buildings tions from individuals, families, or and equipment). Other assistance has been relatives obtained with help from American legisla­ • Solicitation from businesses, e.g., banks, tors whose constituents have succeeded in insurance companies, or industrial con­ interesting them in Israeli social, educa­ cerns 34° / Journal of Jewish Communal Service

• Wills and legacies —advance commit­ the new Innovative Fund; Jerusalem, ments, donadon of property Tel Aviv, and Haifa Foundadons; Mifal • Synagogue tzedakah funds, rabbis' dis­ Hapayis; Rothschild Foundation; Dorot cretionary funds Foundation; New Israel Fund • Tzedakah collectives • Government grants from national agen­ • Mass or selective mailing solicitation — cies, municipalities, and foreign govern­ use of mailing lists and address labels ments • Door-to-door solicitation, including • Legacy fimds willed to the State (Ministry "meshulachim" abroad of Justice) • Solicitation in public places—campaign • Research grants in cooperadon with a day or week for a specific cause university or other researchers for dem­ • "Pushkes" (donation boxes in stores and onstration studies private homes) • Jewish federations abroad, including • Solicitation from tourists and visiting legacies and endowments "missions" • Grants from comparable nonprofit organ­ • Public appeals by prominent personalides izations or professional groups abroad • Newspaper stories containing direct interested in promoting the same service appeals for funds in Israel • Salary and standing order bank or pay­ • Grants from non-Jewish religious groups roll deductions • Grants from business corporations • Bank loans and private loans • Testimonial celebrations honoting com­ munity leaders Illegal Fund-Raising Methods • "Laundering" money from illegal crim­ inal activities for a fee, percentage, or Economic Enterprises donation • Business(es) operated for profit by the • Providing tax write-offs and teceipts for organization, e.g., wedding hall, pub­ donations of worthless goods for a fee, lishing firm, travel agency, handcrafts or for services • Sale of services for fees—contracting out • Trading foreign currency on the black to government and private individuals market • Bazaars, periodic consumer sales at cost • Purchasing lists for fiind raising from plus profit, kickbacks closed government records • Lotteries —Mifal Hapayis (national lot­ tery) earns $450 million annually • Fashion shows, theater evenings, per­ FUND-RAISING ASSISTANCE AND formances by popular entertainers, bingo EDUCATIONAL SERVICES FOR NONPROFIT ORGANIZATIONS • Adverdsement in an organization's news­ letter or annual publication for a fee As the nonprofit and volunteer sector grew • Investments in private businesses, profit- in Israel during the past decade, it created sharing, and in the stock market a market for sophisticated technical services • Sale of the organization's membership for image building, fund raising, and for list teaching organizational and leadership skills and practices. All of these services use computerized data base programs, Foundations and Grants Awards some with access to foundation lists and • Israeli foundations—e.g., Joint Distri­ profiles in Israel and abroad and informa­ bution Committee (JDC-Israel); Doron tion from the Foundation Center in the Foundation ($8 million awarded 1981- United States. Some of these agencies are 1987); Jewish Agency for Israel, including plugged into vast data base systems in the Fund Raising in Israel I 541

United States, wliich is very useful both (JDC, 1987). In specific circumstances, the for proposal development and solicitation JDC has awarded grants to nonprofit or­ of funds (Lauffer, 1983). ganizations to hire staff for the specific A few of these enterprises are described purpose of fund raising and resource below. development.

"ShatU" "Megama" One of the pioneer efforts created to help In April 1987 a new umbrella organization nonprofit, mostly grassroots citizens groups of nearly 100 nonprofit and voluntary or­ to institutionalize their efforts and develop ganizations was founded in Israel called strategies to achieve their goals is the "Megama," the Hebrew acronym for "Vol­ "Shatil" project. This independent advice untary and Nonprofit Sector." Patterned and information service began in 1981 as a after the "Independent Sector" organization subsidiary of the New Israel Fund. This located in Washington, Megama is a lobby Fund, which was established in 1979, was seeking better tax exemptions for donors created by American donors to provide and for nonprofit groups, more television start-up grants to innovative, unconven­ time and publicity on the work of the tional grassroots, self-help groups in Israel. nonprofit sector, and legislation favorable In 1987 the Fund awarded $1.7 million. to it. It also provides legal and accounting As applications increased, it became ap­ advice and a variety of seminars for staff parent that many new groups had little of nonprofit organizations, including work­ knowledge of how to register and function shops on fund raising, public relations, properly as a nonprofit organization, raise and management skills. No fee is requested funds, increase membership, or use the yet for membership, but nominal tuition media. To fill this need, the Fund author­ is required for workshops and seminars. ized a grant to establish "Shatil" (Hebrew acronym for "Support Service for Voluntary Organizations") to provide technical assis­ The Ministry of Labor and Social tance and community organizing training Affairs "Support Service" to citizens' action and self-help groups. It An information and outreach service to is still primarily financed by the New Israel aid ad hoc and ongoing interest groups Fund. Its professional community organi­ was initiated in 1986 by the Research and zation staff provides free consultation, in- Planning Division of the Ministry of Labot service seminars, and initial computer and Social Affairs. Although some of this services to many struggling, nonprofit work overiaps with the JDC program, both volunteer groups. One of its major services are providing services to a wide range of is to provide advice about fund-raising citizens in need of support around specific techniques. issues and problems. Among the services offered are advice about fund raising and a computer data bank for networking with The Self-Help Clearinghouse of the JDC related interest groups. No fee is charged The Israel office of the Joint Distribution for these services. Committee promotes and assists nonprofit, self-help organizations in Israel. The Self- Help Clearinghouse was established in 1986 Private, For-Profit Consultant Services to provide advice, referrals, and informa- A number of academicians; former Jewish don to exisdng or potential citizens' groups Agency, UJA, Keren Hayesod, and gov­ on such topics as fund-raising sources, ernment employees; and emissaries who foundations, and grantsmanship skills have worked with Jewish communities and 342- / Journal of Jewish Communal Service donors abroad have recently established a sample market research surveys for specific variety of private consultant services to mailing lists. The company will also pro­ advise nonprofit organizations on fund- duce tailor-made publicity brochures and raising techniques and sources. material, obtain cheaper mass mailing rates One such private business is "The Israel in the United States, open a U.S. bank Institute for Social and Economic Leader­ account in the client's name, deposit funds ship Development," which is a subsidiary and secure credit cards for this account, of the Tzofar Public Relations Company obtain a toll-free U.S. phone number, and of Tel Aviv. This for-profit enterprise offers handle orders or refer them to the Israeli seminars on such topics as "Fund Raising chent organization (A-B Data, 1987). in the United States," "Fund Raising for Many of the veteran, relatively wealthy, Local (municipal) Councils," and "How To well-organized, nonprofit Israeli organiza­ Plan and Implement Public Relations tions have developed extensive computer­ Activities for Nonprofit and Volunteer ized maihng solicitation methods. The Organizations," (Tzofar, 1988). Israel Cancer Association, the Israel Center Another private consultant firm is "AHK for the Blind, the Israeli Soldiers Welfare Management and Marketing Consultants — Association, and various museums and MASHAP Psychological Services," which hospitals have much to teach other organi- provides consultation, seminars, and other zadons that still lack experience in this area services related directly to fund raising and (Epstein, 1987). resource development for client organiza­ Mass solicitation mailings are also widely tions and individuals. used by Israeli religious institutions oper­ ated by Orthodox organizations. Such mailings, prepared by hand or machine in TECHNICAL SERVICES Israel or New York, are sent in the United Specific technical assistance is now available States, usually with a U.S. return address. from large computer and printing firms in They use names and addresses gathered Israel. A-B Data, an international corpora­ from phone books, tzedakah lists, organi- tion, has developed extensive mailing fists zadonal lists, and ptirchased lists and labels. of Israehs for sale to nonprofit organizauons These mailings are generally sent before and businesses. Following the American major Jewish holidays, and often include a model, this data base is categorized by small gift, such as a calendar or haggadah. professional affiliation or field of business, No reliable data are available on how much location, age group, and other addressee of these funds reach Israel. variables. These mailing hsts can be pur­ chased for about 100 to 150 shekels per 1,000 labels. Also available are address FUTURE DIRECTIONS labels for several million American Jews taken or purchased from membership lists Role of Private Philanthropy of American Jewish organizations, profes­ in the Nonprofit Sector sional societies, Jewish magazines, women's The services of professional fiand raisers organizations, and proven donor lists. are infrequently available to hundreds of These labels are available for $75 to $115 self-help, nonprofit volunteer organizations per 1,000 names. because they cannot sustain the salaries In addition to mailing lists, A-B Data needed to hire staff over an extended (Israel) will purchase and seek new, relevant period. Similarly, conmiunity organizers lists for its clients, computerize existing could be of great service to Israeli social membership lists, prepare personal cover action groups if funds for their salaries letters, provide mail-merge addressing, were available. More than 80% of Israeli print names, sort and mail envelopes in social workers specializing in conununity Israel or the United States, and provide organization are employed by municipal Fund Raising in Israel I 343 or national government agencies, who can Still another role for professional con­ afford to pay their salaries. sultants is that of impartial evaluator of Private philanthropy could therefore foundations' own performance and track play a major role in providing funds for records. This requires the preparation of such staff positions as part of start-up, systematic reviews of grants awarded, finan­ supportive grants (Jaffe, 1980). Since gov­ cial accountability, overhead expenses, ernment agencies have been reluctant to granting procedures, and recommendations fund staff positions for nonprofit organiza­ for changes and conceptions of grant mak­ tions, private philanthropy, including the ing. These kinds of reports are usually UJA and Keren Hayesod, could fill this confidential for in-house use by board important need. The impact of such cata­ members and foundation administrators. lytic assistance could be studied as part of Preparing such reports requires an expertise a demonstration project, involving "exper­ in grantsmanship, Israeli society, account­ imental agencies" that would receive pro­ ability, and many other skills. Sophisticated fessional assistance and "control group" foundation board members insist on this agencies that would not. The study could kind of feedback, yet few individuals can explore outcome differences between the provide it. two groups, looking at such variables as generation of income, goal attainment, and membership involvement. Teaching of Philanthropy and Nonprofit Organizations Now that the nonprofit sector and philan­ Research on Israeli Foundations thropy have been "discovered" in Israel, Foundations, as do individuals, need to the time has come to anchor related scien­ make decisions on how to spend their tific study and practice in this field to aca­ money to obtain the most for their invest­ demic settings —university curricula, expert ment. This is a particularly difficult task if faculty research studies, and training of the foundation board members live in theoreticians and practitioners in these Europe or the United States. Also, the fields. Many such programs already exist in rapid developments and changing person­ the United States. Case Western Reserve alities and leaders in Israeli social services, University in Cleveland hosts the Mandel especially in the nonprofit sector, make it Center for Nonprofit Organizations (and even more difficult to keep abreast of the Mandel Professorship in Nonprofit events. In answer to these needs, founda­ Management), Yale University sponsors tions in Israel have begun employing con­ the Program on Nonprofit Organizations, sultants, managers, computer staff, and and scores of universities have opened related help. special similar programs. These centers Another fiinction recently seen in Israel have generated a flood of research and is that of "honest broker," an individual evaluation studies, which have been of who refers donors and foundations to spe­ great use to professionals, donors, stu­ cific nonprofit organizations that may be dents, legislators, and the general public. of interest to them for a fee or for free. The honest broker does not represent any organization, but has a keen insight into Research Issues and Quesdons social service needs and an ability for suc- about Philanthropy, Nonprofit cessfial matchmaking between donors and Enterprises, and Social Policy nonprofit organizations. This advice and Although some important research has suggestions about fiinding strategies, the been published on volunteerism in Israel, terms of the grant, and methods for reli­ hardly any of these studies cover the topics able follow-up once a grant is awarded are of financing and resource development. As of great help. interdisciplinary interest in this subject 344 / Journal of Jewish Communal Service increases and the alliance between private profits" as suppliers of venture capital philanthropy and the third sector grows for social change both in Israel and abroad, we can expect • Theories and models of decision making both a greater volume and higher quality regarding corporate charity of research on a wide variety of related • The role of public television in fund topics. These research issues should be of raising for nonprofit organizations interest to students of philanthropy in Israel • Nonprofit organizations, political power, in the years ahead. and political orientations of volunteer groups The relative effectiveness and cost-benefit • Motivations for joining nonprofit organ­ assessment of various fund-raising tech­ izations niques • Assessment of government regulation, The effect of foreign government, foun­ supervision, and sanctions of nonprofit dations, and private philanthropy on organizations Israeli social policy and programs • Consumer and/or donor satisfaction with The effect of tax policies on charitable nonprofit organizations contributions and nonprofit organization • Measuring goal attainment of nonprofit activities organizations Boundaries of the private, nonprofit sector • Technological trends in nonprofit organ­ Program and fiscal accountability in the izations and fund raising nonprofit sector • The effect of peer pressure on giving Motivations for giving among different • Factors affecting donor compliance with population groups donor pledges Characterisdcs of leadership and resource • Altruistic values as reward-oriented, sur­ developers in nonprofit organizations vival mechanisms Successful and unsuccessful advocacy and • Personality traits and philanthropic self-help movements / organizations activity New areas of nonprofit activity • Urban-rural differences in donating styles The effect of privatization on government • Differential utilization of inherited wealth services and on nonprofit organizations • Models of constituent involvement in Partnership models for government, nonprofit organizations private philanthropy, and nonprofit organizations This brief review of fimd-raising methods Federated fund-raising models in Israel and research possibilities reflects the "dis­ Corporate philanthropy in Israel—origins, covery" of a sector of activity in Israel that models, interests, and social responsibility has only recently received serious, systematic Interest-free loan funds —history, evalu­ attention and discussion. Philanthropy will ation, effectiveness, operationalization, continue to be an important field of study, and values practice, and teaching in Israel. Evaluation of market theory and market­ ing techniques on fund raising Patterns of foundation decision making REFERENCES and accountability A-B Data. (1987). Catalogue for 1987. Tel Aviv: A.B. Data Company. Curricula for the teaching of nonprofit Aran, Yechiel. (1984). New profile of volunteer management and resource development organization in Israel. Society and Welfare, 5 The impact of foundations on public (4), 381-390. policy Eisenstadt, Shmuel N. (1956). The social condi­ Theoretical explanations of "nonprofit" tions of the development of voluntary asso­ versus "charitable" corporations, "patrons" ciations—A case study of Israel. Scripta as purchasers versus donors, and "non­ Hierosolymitana, i (i), 104-115. Fund Raising in Israel I 545

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