Philanthropy today is not what it used to be. With the rise of a new generation of philanthropists donating to a myriad number of causes all across the country, charity in Israel has been transformed to look and feel like a business. In what is being called "venture philanthropy," Amutot (non-profit organizations) are positioning themselves for larger checks, donors are seeking more active roles in the organizations they are giving to, companies have begun allocating stock options for donation and donor consultants are providing vital information to their clients before they open their checkbooks.
"We look at philanthropy through the eyes of a businessman," said Dana Miller of Israel Venture Networks (IVN), one of the country's leading venture philanthropy organizations. "We have very strict criteria for non-profits in terms of their stated goals and their past performance- we take a business-based approach into the philanthropic world, including viewing donations as "investments" in non-profit organizations, rather than just the writing of a check."
IVN is dedicated to upgrading and providing access to better educational opportunities for Israeli children in deprived socioeconomic areas in the north of the country, as well as in expanding social leadership initiatives.
Using the "best-practice" business model, IVN places integration teams into local municipalities which help coordinate government bodies and NGOs, with the aim of developing joint objectives aimed at raising student achievement in the basic skills of English, Mathematics, Hebrew literacy, Civics, and Computers.
Miller explained that the money given to IVN is targeted for specific projects, and today, 70 percent of IVN's funds are dedicated to educational initiatives, while 20% has been earmarked for social leadership programs, including IsraCorps, which trains youngsters to take a more active role in volunteerism, and seven percent to economic programs such as Start-Up Jerusalem.
There are currently 132 members in IVN, comprised of Israeli and American companies mainly in the hi-tech sector, each of which pays $5,000 to join the organization. This money is used for the general funding of the organization's projects, and according to Miller, if there is an IVN member particularly interested in an amuta, they can donate additional money to that organization.
Unlike IVN's members, which are established successes in the business world, many of the member companies of Tmura are still in their nascent stages of development, yet due to Tmura's unique model of giving, these young companies are still able to involve themselves with charitable work.
Tmura is an "Israel Public Service Venture Fund" that was was founded five years ago as a conduit for the hi-tech and venture capital communities to become more involved in charitable work here by sharing their wealth with non-profit organizations. "These sectors had done incredibly well, and we needed to find a way to give back," explained Tmura's founder Yadin Kaufman, who is the founding partner of Veritas Venture Partners.
"Tmura receives donations of equity stock and stock options from private and some public companies," explained Baruch Lipner, the director of the organization, "and once a company's shares are liquid, Tmura exercises the options, sells the shares and then allocates the proceeds of those donations to worthy non-profit causes in Israel, with a focus on education and youth-related organizations."
Tmura offers two options for donor companies to choose from upon the liquidation of its shares. Lipner explained that Tmura has compiled a list of organizations which have been evaluated and visited and recommended to a company to give to based on their proven success, or a company can choose to direct their funds to an organization of their choice.
Lipner pointed out that corporate philanthropy has grown significantly in Israel over the past few years and Tmura's model of giving has allowed smaller and younger corporations, which are usually strapped for cash, to be involved in giving through the allocation of some of their stock for donation.
To date 93 companies have donated shares to Tmura, allowing the organization to donate $1.8 million to 18 amutot.
While donations from Israeli companies are on the rise, many non-profits are funded by foreign donors looking to contribute more than just their money. "It's an issue of attitude, as donors today want to make an impact and they want to take their donations seriously- they are much more proactive than reactive," explained David Roth, a Jerusalem-based donor consultant. Consultants such as Roth have sprouted up here over the last few years as foreign donors seek to give to Israeli charities or non-profits, yet may be hindered by lack of accurate information or sheer physical distance. Roth, a consultant with Donor Associates of Israel, provides "on the ground guidance" for foreign donors looking to give here, enabling them to feel confident that their money is going to be well-spent.
According to Roth, donors want to see "social returns" on their donations, and therefore more and more non-profit "investors" are seeking active roles on the boards of the organizations to which they donate. "Generation X'ers are making more money at younger ages than the previous generation," he said, "and they are looking for their money to be used in certain purposeful ways- they are not writing a check and walking away."
"Additionally, today's philanthropists are very interested in contributing their ideas and skills to the amuta, and they view their donation as entering into a partnership with the organization," said Roth.
"In the old model of giving, donors gave to large umbrella organizations, yet today we see a surge of targeted giving- not just giving to a black hole," explained Aaron Katzman of the Profile Investment Group, which operates Profile family offices, a division dedicated solely to ensuring donations from abroad achieve their designated purpose.
According to Katzman, while most Israeli non-profits are tremendously accomplished, they tend to not be well organized, and there are those that are not doing what their mission statement claims they are. Consultants like Profile Family Offices and Donor Associates work hard to do the necessary due diligence and research before advising their clients on which non-profits are good choices and which to stay away from. "We represent the donor from start to finish and allow them to make the best possible decision when choosing their investment," added Katzman.
Do in part to the rise of "venture philanthropy" and the "professionalization" of giving in Israel, non-profit organizations have realized that they need to remake themselves in order to properly compete for donations with other organizations, as well as manage their money in line with the demands from their donors.
To meet these needs, the Bank of Jerusalem has taken the lead in Israel in offering banking services tailored towards attracting non-profit organizations while providing them with advice not only on proper money management, but on all banking related matters that arise when dealing with amutot. "We market our banking services to non-profits," said Matti Munk, manager of the Bank's Business Development sector, "however, our added value comes from our understanding of the system- the rules and regulations of donations- both here in Israel and abroad."
The Bank of Jerusalem has distinguished itself as the only bank here which has an entire department devoted to non-profits organizations and the donors who give to them. Hillel Suna, the Jerusalem branch manager, explained that "we are a full-service financial institution and are able to help out both the organization and the donors because we understand the needs of both of them and therefore we can act as a matchmaker between the two sides." Suna highlighted the fact that the "bank provides services no other bank can offer" and is "able to advise each of our non-profit clients properly, thereby maximizing their success." Additionally, he explained that much like donor-consultants, the bank's team of non-profit advisors know what the new generation of donors is looking for when considering a donation-"they want their funds to go to certain projects and used in certain ways- and we help them make that happen."
"Over the past several years, giving has been growing across Israel," said Tmura's Lipner. With the culture of giving that is currently being cultivated here, it seems that those who most at need will be benefiting greatly as more and more talented professionals seek to correct those elements in Israel that are in desperate need of correction.