poverty garbage jerusalem 224 .
(photo credit: Ariel Jerozolimksi [file])
The figures in the National Insurance Institute’s 2009 poverty report, published on Monday, paint a sobering portrait of the state of affairs for those Israelis on the margins.
According to the report, 2009 saw a sharp rise in poverty in Israel, with some 123,500 additional individuals, from 15,000 families, falling below the poverty line. That brings the total number of Israelis below the poverty line to 1,774,800 – almost a quarter of the population.
Alongside every hi-rise luxury tower and hi-tech success story in our rightly hailed “start-up nation” stand the ranks of Israelis left behind, poorer than ever as the country’s economy booms. The poverty gap can be expected to widen further, as the poorest sectors of society, haredim and Israeli Arabs, will continue to grow the fastest. Throw in the problematic state of our education system and the challenge looks urgent and stark.
Given such imperatives for action, the state must do all it can to encourage and support the many nongovernmental organizations that are working to help those in need, often in areas where the government has fallen short. And, indeed, the government does offer some incentives to encourage charitable giving, including income tax rebates on a percentage of one’s donations.
Nonetheless, there is more that could and should be done to make the help non-profits get the most bang for their buck.
ONE OF the most egregious absurdities is that charitable organizations are required to pay value added tax on all of the supplies they purchase. Unlike forprofit businesses, they are not able to offset this expense against VAT collected from from paying customers. VAT paid by charities is an out-of-pocket expense that can’t be recouped; a direct tax, paid to the government, which only increases as their operations – their charitable activities – expand.
For a charity, this 16% additional cost is a highly significant burden,
an indefensible constraint on their capacity to do important work.
Writing in The Jerusalem Post
two weeks ago, Abraham Israel, the founder and director of the Hazon
Yeshaya Humanitarian Network, described first-hand how the burden of
paying VAT affects his charity:
“From every $6 million that I beg from my donors, $1 million disappears
into the Treasury – the same Treasury that refuses to pay the cost of
dental care for the elderly, school meals for children, welfare-to-work
programs, or any other poverty-beating plan that you might care to
recommend,” he wrote.
Poverty-beating plans that organizations like Hazon Yeshaya have come to offer in the government’s stead.
On top of this, charities that receive donations of equipment from
abroad – medical equipment, computers and the like – also have to pay
customs duties on these items.
JUST AS as the government in general, and the defense establishment in
particular, expects the billions in annual foreign aid from the United
States to arrive every year, tax free and on time, VAT and customs
exemptions must be put in place so that charities running soup kitchens
in development towns, or helping destitute Holocaust survivors, can
spend the maximum amount of their donors’ money helping those in need.
Our legislators know full well that Israel wasn’t founded by bullets and
plowshares alone; that behind nearly every unpromising patch of land
reclaimed for agriculture, every second-hand assault rifle, and an
untold number of welfare projects, stood an earnest donor, and the same
remains true today. And few of those donors – be they bar mitzva boys or
deep-pocketed machers – has a clue that the cause they have been
helping is simultaneously struggling to give the government its unfair
It is an unfortunate reality that our overstretched government, even if
it allocated its resources more effectively, would be hard-pressed to
meet all the needs of the less fortunate members of our society. What
the state must do, and urgently, is remove the untenable financial
hurdles preventing those who are providing assistance from maximizing
their capacity to help.