Israel NGO Sector

The Evolution of the Third Sector in Israel

History

In 1948, the present day Israel was created as a homeland for the Jewish people. According to the 1947 UN Partition Plan, the state of Israel, formerly under British rule, would be divided into two states: the Jewish state would consist of 55% of the land and the Arab state would consist of 45% of the land (http://en.wikipedia.org/wiki/Israel). This plan would mark the first time in modern-day history that the Jews would have a permanent homeland. Currently according to the 2004 Israeli census, the Jewish-Israeli population is roughly about 80% of the Israeli population while the Arab-Israeli population constitutes about 19.5% of the population of Israel (this does not include the Muslim population living in Gaza or the West Bank). The Muslims represent about 70% of the overall Arab population (http://www.cbs.gov.il/publications/isr_in_n05e.pdf).

In order to understand the societal structure of the State of Israel it is important to explain the three sectors that together make up Israeli society:

1. The first deals primarily with the private/business aspect of the society;
2. The second is defined by the public/administrative sector and;
3. The third sector, also known as the voluntary sector contributes to the welfare of the citizens. The goal of the last sector is to fill in gaps in services and resources that the first two sectors are not able to contribute towards. This sector has evolved over time from pre-1948 to present day.

the three stages of the evolution of the third sector

The non-profit sector can be defined as three separate movements beginning with the pre-State and leading up to the present. The first movement is referred to as the” Pre-State Movement or Yishuv movement (1917-1948); the second movement is referred to as the “Formative Era” (between 1948 –1970’s); and the third movement is categorized as the Pluralistic Era (mid 1970’s to the present).

Periodization of Israel's historical development: The pre-State (Yishuv) era: from 1917 (the Balfour Declaration) until I948 This was the era in which the infrastructure was laid for the major political and social institutions for the future state. The predominant common ideologies of the time were Zionism, the rebirth of the Hebrew language and culture and pioneering. These were implemented within sectional frameworks, which had an additional ideological orientation, such as socialism, capitalism, etc.

The Formative era: from 1948 to the mid-1970s

This period was characterized by mass immigration, wars, the building of the institutional framework and the dominance of the Labour Party. It was characterized by a strong collectivist ideology, which emphasized statism as opposed to the sectional orientation of the previous era.

The Pluralistic era: mid-1970s to the present

It was during this period that the heterogeneous character of Israeli society began finding its expression in the institutional framework, and the collectivist ideology was replaced by a more individualistic one, in light of similar developments in the Western world.

Pre-State

The Pre-State or Yishuv era can be described as a time of pioneering, Zionism, and collectivism. Hebrew resurfaced as the principal language and there was a sense of self-sacrifice for the greater good of future generations. All work done during this time can be considered nonprofit work.

Ottoman Associations were the oldest form of incorporation and were based on Ottoman law. Up until the enactment of the Nonprofit Corporation (Amutot) Law in 1980, this was the predominant form of incorporation for the non-profit sector during the Pre-State era. Pre-State organizations, such as the Jewish Agency and the Jewish National Fund (JNF) coordinated and managed the Jewish community in Israel until the declaration of independence, when they were replaced by the national government. They were funded mostly from the Jewish Diaspora.

The return of the Jews to Palestine caused some strife between the Jews and the Arabs and during this period each population developed differently. Arab-Palestinian political organizations were created but did not encompass service organizations like the Jewish sector. Any social or educational needs were dealt with by the extended family. Furthermore, each geographical area served its own immediate needs so there was a fragmented system in place of an overall general nonprofit sector.

The Formative Era

Initially after the formation of the state of Israel, grassroot organizations were not valued or accepted into the new Israeli society. The nonprofit sector was comprised of a few very large organizations in fields legitimated by the State. The State of Israel took responsibility for the needs of the population. The government was heavily entrenched by the Labor Group, which espoused a quasi-socialist structure, thereby absorbing the responsibility of taking care of its citizens. The boundaries between public organizations and private nonprofits became blurred. There existed some level of collaboration but the State was ultimately designed to address the basic needs of the population.

The Arabs went through a significant transition during this time. They were stunned at their defeat of the 1948 War of Independence. The loss left them disorganized, geographically dispersed, and without a stable leadership. They viewed the State as an enemy and were subjected to various controls over their every day life. State institutions “left no room for Arab independent voluntary organizations of any sort, which were viewed as potentially subversive. Public issues were dealt with by Arab political parties, most of them created around the traditional extended family structure, and related to the labor party”(Gidron, 1997).

Overall, the Formative era for the both Jewish-Israelis and Arab-Israelis constituted a time of decreased independence for the third sector. However, as the State entered into the mid- 1970’s, this decrease trend would soon be reversed.

Pluralistic Era

Over time however, the welfare state could not sustain itself. Particularly because of external conflicts with neighboring countries such as the 1973 Arab- Israeli War (1) and the wave of immigration as a result of the migration of Ethiopian Jews and the Jewish community of the former Soviet Union. As a result of the immigration influx as well as absorbing newly acquired land, the 1970’s represented a shift from a welfare state to more of a capitalistic one as the State understood that it could no longer provide all the necessary resources.

The welfare system stifles creativity, fosters an unhealthy dependence and absolves its citizens of responsibility (Salamon, 2001). There is no incentive to be motivated to advance the quality of life when there is a system in place to address one’s basic needs.

The late 1970s and 1980s saw a blossoming of diverse small organizations mainly in the sectors of welfare, education, religion and culture. In 1980, as a testament to the development of the nonprofit sector, the Non-Profit Organisation Law (‘Amutot Law’) was passed. Amutot. The term Amuta (in plural - Amutot) is based on the Hebrew word “amit” meaning friend or colleague, yet applies for all types of nonprofits, not just friendly associations or grassroots endeavors.

This new law provides quality control and governs the third sector and allows some involvement of the State in the internal affairs of the organizations. There are four sections to the law:

1. Establishment: Any two or more people who wish to create an organization that is not geared towards providing profits to its members can establish an Amuta (a nonprofit society)
2. Rules: Every Amuta will have rules that each member will have the responsibility to follow under a set established contract.
3. Members: Anyone who is of full age and is interested in becoming a member of an Amuta has that right.
4. Agencies: Every Amuta will have a general meeting, a board and committees.

If an organization can meet the criteria of an Amuta then it will have all the legal rights and benefits of an incorporated legal entity.

There are two other types of nonprofit organizations (Defining The Nonprofit Sector: Israel, Anhier & Salamon, 1998):

• Nonprofit companies. The Companies’ Ordinance (1983) oversees the establishment and operation of limited liability organizations of all kinds…. It specifies that nonprofits may be incorporated as nonprofit companies if they do not pay dividends to their members. They can register as public utility companies if they pursue the promotion of commerce, art, science, religion, charity or any other publicly beneficial purpose, using their funds only for that purpose.
• Public Endowments. Although the term “foundation” is more widely used, the term “endowment” is more compatible with the Hebrew word used in the law - Hekdesh. According to the Trust Law (1979), endowments need not be incorporated when the endowment is only a fiscal entity (i.e., a bank account). Rather, as soon as a specific person is appointed trustee, he or she must register within three months with the Endowment Register in the Ministry of Justice. Providing specific details about the endowment and the trustee to the Registrar completes the registration process.

It is also important to mention some of the different groups that help form the nonprofit sector:

• Jewish ultra-orthodox educational organizations. These types of educational organizations account for some 18 percent or more of all nonprofit organizations in Israel and for some 8 percent of total nonprofit sector revenue. This fact is reason enough to devote special attention to them, but these organizations are also unique in character and history. Upon the establishment of the State, all the Zionist educational systems were nationalized and centralized. The ultra-orthodox educational systems, however, were granted autonomy. Partly for political reasons as not to seem insensitive to the needs of the ultra religious and partly in order not to risk losing the support of the Jewish Diaspora. Support from the religious Jewish Diaspora is critical and to seem intolerant of religious studies would alienate religious foreign aid. Consequently, the State does not interfere with the ultra-orthodox education.

• Memorial organizations. These comprise a very small, but important, part of the Israeli nonprofit sector. Memorial organizations evolved around the remembrance of Holocaust victims and the commemoration of soldiers fallen in Israel’s wars stems from the symbolic meaning of these victims in Israel’s ethos. The victimization of the Jewish people throughout its history, with its climax in the Holocaust, and the conception of the Jewish people as isolated, constantly persecuted and attacked are seen as the moral base and justification for the establishment and existence of Israel.
• Synagogues. While there are several thousand active synagogues in Israel, these organizations are seldom incorporated and registered as nonprofits.
• Community groups. Another special field in the Israeli nonprofit sector is community development. Associations such as neighborhood committees, apartment building committees and Parent-Teacher Associations ( associations of school pupils’ parents), address critical issues that directly affect the residents. These grassroots efforts tackle issues such as safety, the environment, and education. This is especially true in Kibbutz structures, which are communal living environments. The existence of these communities is predicated on the belief of a utopian society. The Kibbutz structure is a mix of Zionism and Communism.
• Social conflicts (Peace & Conflict Resolution) NGO’s. With an ongoing struggle in the Middle East it is critical that nonprofit organizations dedicated to conflict resolution exist. According to the article, “Peace and Conflict Resolution Organizations in Three Protracted Conflicts: Structures, Resources and Ideology” (1999) and the Carnegie Commission on Preventing Deadly Violence (1997), three broad categories of NGOs within the peace and conflict exist in Israel: (a) human rights and advocacy groups; (b) humanitarian and service organizations; and (c) mediation or "track two" groups that pave the way for formal peace”. Clearly, these NGOs can provide the framework needed to offer a neutral environment to help end the Middle East conflicts. This type of conflict resolution would almost certainly fail if proposed by either of the governments in conflict.

The Arab-Muslim nonprofit sector also went through advancement in the 1970’s. The society went through an evolution and developed a more socio-political awareness. This was a result of a variety of forces such as modernization and education. Furthermore, religious-based organizations developed at the same time as other Arab countries and Israeli religious-based organizations gained popularity. Under the concept of Islam, numerous organizations dedicated to serving the community were established. The combination of political parties on one side and faith-based organizations on the other helped to create the modern-day “third sector”. Organizations that were part of the non-profit sector addressed either political issues such as land rights or social change or issues related to services that the State was not able to make available.

Today, Israelis live in a post-socialist, emerging capitalist society where as social services provided by the government are now contracted out to nonprofit and for- profit organizations The result in this new capitalist era is the large increase in the number of registered active nonprofit organizations, from about 3,000 in the early 1980s (Yishai, 1998) to 12,000 in 1982. In 1999 the number more than doubled to 27,000 registered Israeli "amutot" or nonprofit organizations. Since the 1980s, the sector has grown at a rate of over 1,000 new organizations annually” (Anhier, 1998). In 2003, the number of new Amutot reached 1,452.

Non Profit Expenditures

The combined expenditure was 33 billion shekels (7.7 US billion dollars) or 13% of the country’s total GDP in 1995. NPO revenue is generated from government grants for services (64%), fees and memberships (26%), and donations (10%). (http://www.givingwisely.org.il/Intro2.htm). In 1995, 9.2% of the total work force in Israel was funded by nonprofit organizations. This high percentage ranks fourth in the world of total paid employment by the nonprofit sector. “In the developing world as well, the nonprofit sector turns out to be a far more important economic presence than previously recognized” (Anhier, 1999). In Israel the percentage is almost double the 22-country average. This indicates the importance of the sector not only for the resources it provides to the community but also for the employment that is generated through its growth.

Philanthropy In Israel

Throughout time, the concept of philanthropy has always been deeply rooted in the Jewish religion. The historical commandments of the bible dictate the laws of providing for the less fortunate. This philosophy helps to guide the progression of the third sector and facilitates its continual growth.

Although there are many important and worthwhile causes to support, Israeli society has contributed mostly to the areas of “health (40.9 percent) and education (30.9 percent).” Contributions to other sectors are smaller in comparison: Personal social services (9.9 percent of total sector expenditures), Culture and Recreation (6.3 percent), Foundations (4.2 percent) and Professional, Workers’ and Business Associations and Unions (3.5 percent). All other categories constitute less than 2 percent of the total expenditure each (Gidron, 1999).

Conclusion

The history of the nonprofit sector in Israel can be understood through the course of three different time periods as shown by Table I. Initially the nonprofit sector preceded the creation of the modern-day homeland for the Jewish people. After the State was created in 1948, the sector had to re-adjust to the new state philosophy, whereby the State was responsible for its citizen’s overall welfare. When this new structure could no longer be sustained, the government capitalized on the third sector’s ability to generate and maximize resources. This new attitude allowed the nonprofit sector to flourish and expand. The post 1970s also had an effect on the Muslim- Arabs, as the nonprofit sector became an important resource for services that the political leaders would or could not provide. The nonprofit sector continues to develop among the Arabs and Israelis in Israel and is expected to continue to initiate at least 1,000 new organizations annually.

END NOTE: (1) The 1973 War, also known as the Yom Kippur War, was fought in October of 1973 between Israel and a consortium of Arab nations. The war had no significant effect on the territorial boundaries. On October 22nd, US Secretary of State Henry Kissinger and Soviet leader Leonid Brezhneva negotiated a cease-fire resolution.

External Links

www.givingwisely.org.il/State.htm- Website of Israeli Non profit organizations. www.idi.org.il/english- Describes different think tanks in Israel. http://www.jdc.org/how_links.html- American Jewish Joint Distribution Committee. www.ngo-moitor.org/ngo/types.htm- Details about different types of NGO’s.

References

Anhier H.K, & Salamon, L.M. “Defining The Nonprofit Sector: Israel” Gidron, B. & Katz, H. Israeli Center for Third-sector Research Ben-Gurion University of the Negev Beer-Sheva, Israel 1998 Working Papers of The Johns Hopkins Comparative Nonprofit Sector Project.

Anhier H.K., List, R., Salamon, M. Lester, Toepler S., & Sokolowski, W. 1999. “Global Civil Society – Dimensions of the Nonprofit Sector Project”. The Johns Hopkins Comparative Nonprofit Sector Project. Publisher: Johns Hopkins University.

Batsleer, Julian. 1995. Management and organization, In: David, J., Hedley, R. and Rochester, C. (eds) An Introduction to the Voluntary Sector, London,: Routledge.

The Central Bureau of Statistics- Israel 2006, viewed September 2006, http://www.cbs.gov.il/publications/isr_in_n05e.pdf.

CIA- World Factbook, Israel 2006, viewed September 2006, https://www.cia.gov/cia/publications/factbook/geos/is.

Gidron, B.1997, “The Evolution Of Israel’s Third Sector: The Role Of Predominant Ideology.” Voluntas, 8:1: 11-38.

Gidron, B, Katz, S; Meyer, M, Hasenfeld, Y, Schwartz, R & Crane, J. 1999, “Peace and Conflict Resolution Organizations in Three Protracted Conflicts: Structures, Resources and Ideology.” Voluntas: International Journal of Voluntary and Nonprofit Organizations, Vol. 10, No. 4.

Giving Wisely—the Web Site of Israeli Non-Profit Organizations 2002, viewed September 2006, http://www.givingwisely.org.il/Intro2.htm.

Salamon, M.L.“ The Third Sector and Volunteering in Global Perspective.” Presentation at The 17th Annual International Association of Volunteer Effort Conference Amsterdam, The Netherlands January 15, 2001.

Yishai, Y. 1998. “Civil Society in Transition: Interest politics in Israel.” Annals of the American Academy of Political and Social Science, 555:147-162.

Wikipedia: Israel 2006, viewed September 2006, http://en.wikipedia.org/wiki/Israel