Shekel money bills.
(photo credit: REUTERS)
More than a third of all Jewish donations in the US is directed toward Israel, according to Tidhar Ofek, member of the Board of Directors of American Support for Israel.
That figure, he said, is important for Israel given how much easier it is to raise funds in the United States – even for Israeli causes.
“In general, people give more to charity in the US than in Israel,” he said, as figures indicate that Americans tend to donate a higher percentage of GDP each year than most countries, whether because of cultural, ideological or historical reasons.
But one thing is clear: the tax system in the United States is more conducive to eliciting donations than in Israel.
“In Israel, there are stumbling blocks to encourage charitable giving,” he said.
“The US tax code very much encourages giving to charity and makes it feasible for people to get a tax break.”
In the US, he notes, setting up a nonprofit that can receive tax-exempt donations is very simple. In Israel, few organizations are eligible for the status, and those that are need to undergo a two-year waiting period before they receive official approval.
Israelis also tend to have a stronger belief that the state should be responsible for dealing with social welfare issues than Americans, so may be less likely to seek out charitable organizations to play those roles.
As a result, many Israeli nonprofits set up counterparts in the US to help tap into the vast pool of contributions.
Many “friends of” organizations in the US exist with the sole purpose of raising funds in the friendly US giving environment, and then channeling them to Israeli groups.
With the sum of US giving towards Israel estimated in the $1.5 billion-$1.9b range, it is a good strategy, and one that may just get more appealing over time. According to Ofek, US contributions toward international causes are on the rise. Similarly, the fastest growing sector among online donations is to faithbased organizations.
“Israeli giving falls under both of these categories,” said Ofek. Online giving, in particular, has proven itself in recent years as a great source of new funding. The largest increases in recent years donations have come from personal donors, as opposed to corporate ones, a trend that some attribute to the ease provided by online donation.
“It is ultimately very worthwhile to set up Israeli charitable organizations, even if Israelis themselves may not always have tax benefits from contributing to these organizations,” he continued.
The set up makes it “easier to receive donations from abroad, and from a generous and caring Jewish world.”