The changing winds of Israeli philanthropy

Ahuva Yanai, CEO of the leading NGO consultancy organization, Matan, is helping to shape the country’s 3rd sector as it recovers from the global economic crisis.

AHUVA YANAI 311 (photo credit: Courtesy)
(photo credit: Courtesy)
Ahuva Yanai is not optimistic. The darkhaired woman who directs perhaps the most powerful entity in the country’s nonprofit sector shakes her head emphatically when asked whether this year will see some revitalization for the thousands of organizations dedicated to improving civil society.
“We are seeing a growth in Israel’s economy,” acknowledges Yanai, who has headed Matan – itself a nonprofit that advises corporations, individual donors and foundations where to invest their money in the third sector – since its inception 10 years ago. “However, at another glance we see that this progress is very sensitive and we know for a fact that philanthropy is always the last in line to recover from economic crisis.”
A former army colonel and a grandmother of two, Yanai adds: “Before the situation improves, donors must feel secure and that is a lengthy process. Honestly, I think there will be another downturn [for the third sector] before things even start to get better.”
While her comments might be dramatic and certainly cast a gloomy shadow over the estimated 30,000 nonprofit organizations (NGOs) and charities that are striving to stay afloat in a weakened economy to tackle a wide range of social and cultural issues, she speaks with authority when evaluating what lies ahead in the coming year and how philanthropy needs to adapt to meet a rapidly changing economic reality.
“The third sector has been hit very hard,” says Yanai unequivocally. “Even just looking at the dollar exchange rate, which is 10 percent less than it was [before the recession], we can see that the charity world has received a severe blow. Despite reports of economic recovery, I don’t think we will see any significant changes for the NGO world here in 2011.”
She explains that the blow to the vibrant charity community is not specifically the dwindling donations but rather “the promise in the air that was completely destroyed at the end of 2008. The numbers [of donations] after the recession started were not dramatically less, but we began to move away from the optimism that was in the air. In 2007 and the beginning of 2008, we were flourishing, but by the end of the year, especially after the Madoff affair, that hope had evaporated.”
Although Matan’s work focuses almost exclusively on local philanthropy and civil society organizations, Yanai points out that the fallout of the Madoff affair and the destruction it caused to large US foundations, such as the Chais Family Foundation, which once gave away about $12.5 million annually to Jewish causes, invariably had a large impact on activities here too.
“The reality soon became that organizations could no longer count on what they were going to receive in the coming year and nothing was certain,” she says, adding that organizations and donors had to reevaluate and streamline their priorities.
“NGOs were forced to think about how they could maximize their resources,” continues Yanai.
“They also had no choice but to go back and reevaluate their original vision, with the only choice being to return to the basics.”
For the donors, she says, giving needed a new approach too: “It could no longer be give and forget or spray and pray. Funders, individual and corporate, had to refocus their involvement and contribution to civil society. This is where Matan has been most useful.”
The brainchild of millionaire Shari Arison and the Ted Arison Family Foundation, Matan in its current format came about after a merger 10 years ago with the International Youth Foundation, created by British philanthropist Jacob Schimmel, chairman of UKI Investments, and Israel’s Avi Fischer, deputy chairman of IDB Holdings and co- CEO of Clal Industries and Investments. Today, these two businessmen and other influential names from the corporate world sit on Matan’s board and dedicate their time to enhancing relations between the for-profit and nonprofit worlds.
“We sit in the middle of these two distinct communities,” explains Yanai. “We have become experts in what is going on in Israeli society and understand what is needed out in the field. It is this information that we translate to the corporate world, so that businesses, private donors and foundations can more effectively give back to the people.”
How does Matan evaluate whether a charity is really contributing to civil society?
Evaluation and assessment is really a new area for most civil society organizations, and I believe that we are the pioneers here. We have partnered with [the US-based] United Way and work hard to emphasize the importance for nonprofits to undertake self-evaluation and really focus on the social return on the investment. Every business that is selling a product does this type of evaluation and for nonprofits, both big and small, it is important to do so also.
How has Israeli giving changed in the last decade?
I think in the last 10 years we have seen big changes in Israeli philanthropy, especially in the business sector. When we first started, nobody here really understood the concept of corporate responsibility to society and this has changed dramatically.
What is changing now also is the way businesses and individuals donate to charities; the shift is from just giving to a more strategic type of giving, which I believe is the meaning of real philanthropy.
Of course donating to charity is not a strange concept for Jews or Israelis, but giving in a calculated way that will help to build civil society for the future is something new. Today there is more vision of what the achievements will be and what impact they will have.
Is part of this strategic giving creating new entities or encouraging partnerships between existing operations?
We never seek to create new organizations unless there is no entity already existing that deals with the issue. Before we advise people where to invest their money, we thoroughly investigate what else is going on. One of our functions is to encourage every organization to register on our website ( in order for us to build a clear database. While there are supposedly 30,000 registered nonprofits in Israel, only about 4,000 are active and effective.
After the recession, what do you feel is the role of world Jewry in Israel’s philanthropic landscape?
I have a huge appreciation for the contributions of world Jewry to the creation of the State of Israel. Today, as the nature of philanthropy changes, many of those donating want to be more hands on and get more involved in the projects than in the past. It’s no longer about donating money and seeing your name on a plaque; donors from abroad want to share the responsibility for the projects and be part of them close up. We help to encourage that.
Does this mean that Israeli organizations such as the Jewish Agency and the Jewish National Fund, which traditionally served a conduit for international donors, no longer have a place?
As an Israeli I really value these organizations and I want them to remain strong, but I really think they need to reevaluate their roles in the Jewish world and in Israeli life. Perhaps they could become a platform for other areas of involvement that are more specific? I do, however, think it’s important for them to remain strong and for all of us to be united, maybe even creating a round table for world Jewry to change its ideas and work together to build a common vision for the next generation of Jews and Israel.
What are Matan’s goals for the coming year?
Our goal is to increase our income by at least 15 percent and to promote more volunteerism in Israeli society. We are already busy targeting eight new businesses to get involved in corporate responsibility, as well as encouraging around 20 private donors and foundations to commit to supporting social welfare projects.
This is not easy. Despite the headlines that we are moving out of bad times, none of us can really be sure. Only once the strong confidence returns to the air, then the philanthropic world will start to revive also. In the meantime, everyone involved in this field will have to work harder than ever before to preserve what we have already created and ensure it is broadened in the coming year.