Welfare Nonprofits in Israel: A Comprehensive Overview

Civil society organizations (nonprofits) are playing a growing role in the field of welfare in Israel, and provide services to a variety of population groups, government ministries, and local authorities. In 2016, 43,000 organizations were registered – a particularly high share of organizations per capita.

However, to date, there has been a lack of data on organizations working in the field of welfare, the scope of their activities, their sources of funding, their defining characteristics, and the target populations they aim to reach. A new Taub Center study, conducted in cooperation with the Center for the Study of Civil Society and Philanthropy at the Hebrew University of Jerusalem, sheds light on this issue and maps out the welfare nonprofits in Israel alongside the scope of their revenue and their sources of funding.

The research study – conducted by Shavit Madhala, Dr. Michal Almog-Bar, and Prof. John Gal – reveals that, among the Haredi and Arab Israeli sectors, the share of new organizations is relatively high. Among organizations serving the Arab Israeli population revenues are significantly lower than in organizations serving other sectors, and they only receive a small portion of philanthropic donations.

The study also finds that government support is mostly given to large and longstanding organizations.

Israel’s civil society sector is one of the largest in the world in terms of the number of registered organizations per resident, and in terms of the relative scope of their economic activity. Over the last decade, 1,600 new organizations registered per year, on average, and in 2016 there were 43,000 registered organizations total (although only about 20,000 appear to be active). Organizations dealing with welfare constitute 15% of all civil society organizations in Israel.

The study of Madhala, Almog-Bar, and Gal includes an analysis of active organizations working in the field of welfare between the years of 2013 and 2016 whose annual revenues exceeded NIS 500,000 – a total of 748 organizations.

The research examines characteristics such as sources of revenue, the number of paid staff and volunteers, and target populations. The organizations are classified according to how long they have been operating, the scope of their economic activity, their geographic distribution, and other characteristics. The findings of the study are based on an analysis of the reports organizations submit to the Israeli Corporations Authority, which are available on the “GuideStar Israel” website.

Many organizations are intended for the Haredi society, and few work in the Arab Israeli society

About one-fifth of the welfare organizations included in the study work with the general population, about one-fifth are intended for children and youth, and the remainder focus on target populations such as people with disabilities and the elderly.

7% of the organizations have services designated for the Arab Israeli population, yet their revenues account for only 2% of the total revenue of all the organizations. On the other hand, 23% of the organizations – whose revenues account for 20% of the total revenue of all the organizations – are intended for the Haredi sector.
Distribution of nonprofit organisations by population group

About one-fifth of all organizations are new (have been operating for under 15 years), and among the organizations focusing on the Arab Israeli and Haredi populations, the share of new organizations is relatively large.

In terms of geographical distribution, about 20% of the nonprofits are national organizations operating in five or more locations throughout Israel. About 20% of Arab Israeli organizations operate nationally, compared with 13% of Haredi organizations. Most of the local Arab Israeli organizations operate in the North and in Haifa.

Organizations’ financing comes primarily from the provision of services and from public sources; donations to Arab Israeli organizations are limited

The total revenue of the welfare nonprofit organizations examined in the study amounts to NIS 13.8 billion a year. 23% of that sum goes to organizations working with children and youth, 22% to those focused on the elderly, and 21% to those addressing the general population. The main sources of revenue are the provision of services (39%) and public funding sources (34%). Additional funds come from donations (25%).

The significance of these data is that funds collected by nonprofit organizations from donations (philanthropy) come to 28% of the total public expenditure on welfare services in Israel. The estimated sum of donated funds is NIS 3.45 billion, and this sum increases Israel’s annual expenditure on welfare from NIS 12 billion to NIS 15.45 billion.

Among Arab Israeli organizations, the majority of funding is public (57%) whereas, among the Haredi organizations, funding from donations is prominent (38%). Most of the revenue of more longstanding organizations (operating for more than 15 years) comes from the provision of services and public funding while, among newer organizations, most revenue comes from donations.
Distribution of total revenues of organisations by source

An examination of government funding shows that 85% of funds go to large organizations (with an annual revenue of over NIS 10 million), which make up about one-third of all the organizations. This means that, among large organizations, public funding is the primary source of revenue, while the main source of revenue for small organizations (with an annual revenue of up to NIS 3 million) is donations.

The Taub Center and the Center for the Study of Civil Society and Philanthropy at the Hebrew University of Jerusalem also found that most of the organizations that provide services to working-age adults do not receive any government funding, but most of the organizations dealing with people with disabilities or yeshiva students (84% for each category) receive government support.

Support from the government is also relatively high among organizations that work with the elderly (78%) and with children and youth (79%).

An analysis of philanthropic donations shows that only about 2% of donations go to Arab Israeli organizations, while the share of donations received by Haredi organizations is relatively high – 30%. Donations are also not equally distributed across organizations of different sizes: about half of donations go to the top decile of organizations (the 10% that have the highest revenues from all the organizations examined).

Personnel in organizations is largely reliant on volunteers, but there are also many paid positions

Personnel in the examined organizations stand at 370,000, of which 66% (243,000) are volunteers. Most of the volunteers can be found in nonprofits that focus on families (31%) and adults of working age (17%). Two organizations that have a particularly notable number of volunteers are Chasdei Naomi (200 paid staff and 58,000 volunteers) and WIZO (5,000 paid staff and 40,000 volunteers).

When these two organizations are taken out of the equation, the share of volunteers in nonprofits focusing on families is 12%, and in those focusing on working-age adults, only 1%. A particularly high percentage of paid staff can be found in organizations that care for the elderly (33%).

About 87% of the organizations’ personnel are concentrated in the large organizations, and it seems that among small organizations, the proportion of volunteers is higher. Only 1% of total personnel are either employed or volunteer in Arab Israeli organizations, and 11% in Haredi organizations.

Madhala, Almog-Bar, and Gal explain the study’s findings: “It seems that in the Arab Israeli and Haredi sectors many organizations have been established in the past 20 years to supplement services provided by the State.

The small number of Arab Israeli nonprofits attests to the sector’s great reliance on religious organizations, family support, and informal communal organizing. There is also a significant gap between the revenues of Arab Israeli organizations – which account for only 2% of the revenue of the studied organizations – and the share of revenue going to Haredi organizations (20%) or other Jewish organizations.”

The researchers add that “the findings indicate the importance of philanthropy as a significant source of funding for welfare services in Israel, and philanthropy must also be developed within Arab Israeli society.” Regarding government funding, they say: “Most of the funding goes to large organizations, whose share out of all welfare organizations stands at only 33%, and it is clear that the distribution of government funds is not equal.”

The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.

The Center for the Study of Civil Society and Philanthropy in Israel aims to enhance existing knowledge in the fields of civil society, social engagement, volunteering, philanthropy, and cross-sector partnerships in Israel. The Center engages in efforts to develop and promote basic and applied research on the activities of civil society, social engagement, and philanthropy, their roles, and their contribution to Israeli society. The research findings serve as a basis for expanding the Center’s activities in developing study and enrichment programs on civil society, social engagement, and philanthropy.

For details, or to arrange an interview, please contact Anat Sella-Koren, Director of Marketing, Communications and Government Relations at the Taub Center for Social Policy Studies in Israel: 050-690-9749.