I had a conversation with my father over breakfast this morning about fundraising in Israel. My father, Matthew Maryles, who is visiting Israel for the holidays, is currently the CEO of American Friends of Bar Ilan University, responsible for raising considerable sums for both operating costs and capital campaigns of this seminal Israeli institution. This is how he’s spending his “retirement”. In his pre-retirement, he was a Wall Street executive with fundraising just a “hobby” – he worked in fundraising as a layman for too many organizations for me to recount: UJA Federation of New York, The Yeshivah of Flatbush, Gesher, Yeshiva University, JCRC, and the list goes on. Given his vast experience and decades-long perspective, I decided to possibly ruin the casualness of the morning and pick his brain about the current state of Israeli fundraising.
“This is a very difficult time,” he said. Although the organization is still substantially meeting its goals for operating support, and has a successful planned-giving fundraising operation, he said it is very difficult to raise money for capital campaigns. “Hardly anyone has a high level of confidence about what the next five years will look like economically and financially. There is no clear sense about what the future looks like, and in that climate, it is very difficult to secure long-term commitments, and thus create a sustainable long-term strategic plan.”
This perspective confirms what many Israelis have been experiencing for some time. Since I wrote a column here a few months ago about the challenges of fundraising in Israel, I have engaged in dozens of conversations with people in the field who express an increasing frustration and almost helplessness when it comes to fundraising in Israel. One woman who runs the fundraising department of a leading Israeli organization with a multi-million dollar budget told me that her organization no longer sends out letters of intent to foundations because in the past three years she has not received a single positive outcome from such letters. She doesn’t even bother researching foundations anymore; the only way to get access to a foundation, she claims, is via personal connection between a board member and a foundation member.
Indeed, the rules are changing as we speak. Several key foundations that were known for having their doors open to small or unknown amutot have announced that they no longer accept unsolicited applications – such as the Clore Foundation and the Gimprich Foundation. Meanwhile, the competition is fierce. One foundation that had a request for proposals in September received over 200 applications for some 3 or 4 grants. Israeli organizations have fewer and fewer addresses to turn to, and diminishing chances of success. And, as my father’s observations confirmed, there really is no end in sight, no proverbial light at the end of the tunnel. Nobody really knows how this will end.
One mantra that keeps being heard, however, is the need to develop Israeli fundraising. I’ve said it here as well. Israel has the means and the wherewithal to create a philanthropic infrastructure – and it seems to be an ethical, economic and logical imperative that programs in Israel be sustained by Israelis. But organizations for the most part have no idea how to reach potential Israeli donors. Connections? Word of mouth? Grass roots campaigns? I’ve had this same conversation with all my clients and the solutions remain fuzzy. When it comes to reaching potential Israeli donors, there is a cultural and structural vacuum.
But I think there is one step that the Israeli government can take that may go a long way in establishing a local philanthropic culture: creating tax incentives for creating local foundations. Currently, there is really no such thing in Israel as a foundation. The Israeli government, which is currently toying with issues around capital gains taxes, has an opportunity to kill a few birds with one stone as it were, by giving wealthy Israelis significant incentives for creating local, shekel-based foundations out of their earnings – whether family endowments or pooled foundations on the Natan model. This kind of policy, accompanied by a publicity campaign explaining why this is such an important idea, could really go a long way to creating that philanthropic culture that we are all dreaming about.
I would add that foundations should have binding rules to keep this system clean and honest. There need to be rules ensuring that a certain portion of the funds must be given away to Israeli amutot each year, and rules limiting expenditures on administrative expenses (which by the way would also give foundations sympathy for amutot in their struggles to keep to those admin limits). There should also be very strict rules to pre-empt protektzia – such that government employees and civil servants cannot be tied to foundation boards or staff in any form, and strict requirements for fiduciary and managerial transparency. There are already too many unhealthy ties between government and private money in Israel, and it is vital that this not become another tool to promote private interests at the expense of the public good.
If the third sector has any real lobbying power – and perhaps the recent establishment of the Israel Association of Professional Fundraisers is a first step in that direction – then I think that it would be wise for us as a community to direct our efforts towards encouraging the government to create a system for building Israeli foundations. We need to take the lead in designing our future rather than letting the future design us, and this seems to me one important step in creating a different future for the Israeli not-for-profit world.