The hi-tech sector’s IPO and fundraising boom is hardly reflected in the philanthropy world. An absence of donations by the new rich is evident nowadays.
Recently, we have been exposed to the significant tax-benefits received by those who return to Israel in order to work in the hi-tech sector; a step that joins other governmental moves.
The government, which is currently dealing extensively with tax-benefit offers to the hi-tech sector, must also take a clear stand and only offer tax-benefits to those who involve themselves with and contribute to the Israeli social sector. The government needs to be innovative while creating mechanisms for share-funding and other options.
Since the beginning of 2021, over $18 b., a historic record, has been raised by Israeli hi-tech companies. This reflects the tremendous strength the hi-tech industry has as the main engine of Israel’s significant economic growth, which is transforming the economy from end to end. The Israeli hi-tech sector is impacting more than just the country’s economy, it is changing the face of Israeli society, including hi-er education, employment, so on.
This transformation, in which many Israeli companies participate, encourages innovation, efficiency, professionalism and increased productivity in other industries. As well, it has resulted in making technology accessible to a broader population. It is an important and welcomed effort and yet, Israeli society needs not only professionalism and innovation, but it also requires oxygen in the form of financial resources. In the global arena, this effort has found its way to the heart of the mainstream: Bill Gates, Warren Buffett, Mackenzie Scott, and many others donate a significant part of their wealth for the benefit of social goals and missions around the world. In Israel, it seems as if the huge amount of capital entering the country does not find its way, as it should, to NGOs, social initiatives and third-sector projects, and one must ask why.
Sustainable success is based not only on innovation, but on values, such as generosity, equality, fair resource distribution, and so on. Through philanthropy and impact investment, hi-tech professionals can improve the face of Israeli society, help integrate entire sectors of the public in the future world of employment, bridge gaps and enable the implementation of measure-based programs (impact) in a variety of fields. These programs include the promotion of the future generation’s excellence in science and technology, bridging gaps, health, care and support of disadvantaged populations and more. The term fair shared city refers to the fact that one city is shared by different populations, hi-tech workers beside asylum seekers. A fair system of contribution will enable these populations to meet.
THE WORLD OF impact (investing in social projects that are based on their measurement of success and return yielded) has greatly expanded in recent years and it has opened up new opportunities for the social impact of philanthropy through the world of measurement, evaluation and innovative financial tools. This is where the ability to translate values into philanthropy is expressed. Ultimately, the success of social programs requires budgets and funds.
In order to mobilize the hi-tech industry for the benefit of Israel’s social goals, regulation in Israel needs to provide newer and more creative tools tailored to the changing reality. Adjusting the regulations will allow, for example, increased tax – benefits for the establishment of significant philanthropy foundations, while increasing the already recognized annual tax-benefit ceiling in article 46. It will create the ability to donate share stocks and options prior to IPO and fundraising processes, while receiving tax benefits. The adjustment of regulations will also create clear terms and economic incentives for investors to contribute funds to social and environmental projects or other creative solutions – which may not always offer the investor financial return, but which will have a significant social-environmental impact. To give back to society is a useful expression in hi-tech jargon and it should also receive practical expression in the increase of contributions to the social sector alongside personal philanthropy. The call here is aimed at companies that can fully commit to a permanent assistance policy for social purposes as part of the company’s revenues. This is a call for an ongoing effort that changes reality, especially for companies that aren’t satisfied with singular mediated events of employee volunteer work.
At the same time, it is also important to increase awareness among the hi-tech industry and its employees of their ability to change reality for groups in the population by mobilizing for the world of impact.
Most of the population that is benefiting from new capital is characterized as young and innovative, a population whose principles align with values such as sustainability, the environment, equal opportunity and education as key factors to success and more. It is important that we know how to translate these values into funds as well.
The hi-tech industry, the Start-up Nation, is the wonder of Israel in recent decades. Its contribution to the development of the Israeli economy is enormous, but its philanthropic responsibility is also very important – and it is also what we expect. In order to be a start-up nation and not a start-up sector, we must ensure that the entire society enjoys the growth.
The writer is CEO of the Tel Aviv Foundation.