The Nonprofit Sector in Israel:
A Growing Need for Professional Leadership

Overview

The nonprofit sector in Israel is a large and rapidly growing component of the local economy. With an annual expenditure of over NIS 80 billion annually[1], third sector activity constitutes 13.5% of the country's GDP – ranking fourth in size after Holland, Ireland and Belgium. The sector is comprised of more than 27,000 active organizations employing over a half a million people, nearly double the average share of the labor force in 22 developed countries.[2]

These organizations are playing an increasing role in the provision of social services in areas such as education, social welfare, health and immigrant absorption.  Such activity aims to answer the growing needs of Israeli vulnerable populations and widening socio-economic gaps.  In addition, citizens are coming together in increasing numbers in order to pursue collective goals through civic and advocacy organizations. These groups aim to influence decision-making circles and public opinion, as well as affect social change on in broader society.

Funding Trends

According to the Bank of Israel, donations from the United States amount to an estimated NIS 5 billion, private donors in Israel contribute NIS 1.2 billion, and donations from foundations and businesses total between NIS 8 billion and NIS 9 billion. Given the current financial crisis, donations will be significantly reduced in the upcoming year. [3]

Eighty-eight percent of Israeli nonprofits view foundations as the best source of funds, according to a survey by the Israel Center for Third-Sector Research at Ben-Gurion University. However, most foundations have suffered from the financial crisis. The survey reports that 81% of nonprofit organizations active in Israel are facing financial challenges, 22% of which are in severe financial crisis.

In another survey conducted by the Israel Forum of Foundations in January 2009, among 51 Israeli and overseas foundations with offices in Israel, 50% reported they would be reducing their giving in 2009 by 10-30%. Another 40% reported their giving would be at the same level as 2008.[4]

Amidst the reduction of donations, new funding mechanisms are being developed in order to assist Israeli nonprofit organizations survive the economic crisis. For example, the Jewish Funders Network (JFN) has launched a Crisis Loan Fund to assist nonprofits harmed by the Madoff Ponzi scheme. With an initial pool of $5 million, the Fund will provide bridge financing and interest subsidies to eligible 501(c)(3) nonprofits facing budget shortfalls as a result of the scheme. JFN has also launched a Pro Bono Resource Bank that offers consulting services to nonprofits who have been negatively impacted by the current economic downturn. New funds in the amount of $750,000 have been made available by The Jewish Funders Network/Richard and Rhoda Goldman Fund Matching Grant Initiative for the Environment in Israel to match first-time major gifts by JFN members to Israeli nonprofit environmental organizations.

Kishurim: Recruiting Leadership to Meet Today's Challenges

The growing numbers and significance of the nonprofit sector demands professional, skilled and experienced leaders at its helm. The current economic crisis accentuates the need for talented, determined and innovative personnel that will work to overcome challenges and maximize opportunities – key elements for the sustainability of nonprofit organizations today.

Identifying, recruiting and integrating the right personnel into these organizations is gaining increasing importance not only for the organizations themselves, but for the wider society benefiting from their efforts. Kishurim is strategically positioned at the critical crossroads of this juncture, delivering the highest level of human resource capacity to Israel's nonprofit sector.