Today, as a prosperous hi-tech nation, can Israel truly justify asking for millions of dollars in charity from Jews abroad, especially when Israelis themselves give so little?
By SHLOMO MAITALRoman Abramovich, said to be the wealthiest Israeli citizen, and Chelsea Women's Manager Emaa Hayes at the Western Wall (photo credit: SHAHAR AZRAN/ CHELSEA F.C)
“Repentance, prayer and charity avert the severity of the decree.”These words are from one of the most moving parts of the High Holy Days prayer book, the beautiful U’netane Tokef prayer.The New Year 5780 has spurred me to think about whether I and my fellow Israelis truly do follow the precept of giving generously to charity.I deeply regret my answer is, no, we do not. Collectively we fall very short of fulfilling this core Jewish value. We do, however, pursue vigorously another old Jewish custom – schnorr, a pejorative Yiddish word for seeking charity, originating with a German word for ‘sponger’ or ‘freeloader.’This includes our government, which on July 19, 2018, initiated the Basic Law: Israel as the Nation-State of the Jewish People, passed by 62-55 in the Knesset, with two abstentions. If Israel is indeed a Jewish state, as this Basic Law declares, then it should be a global leader in tzedaka – in charitable giving, especially when Israel is now a wealthy country, ranking 21st in GDP per capita, out of more than 200 countries. But we are very far from it.When it was first established, Israel was very poor and struggled to absorb millions of immigrants. Today, as a prosperous hi-tech nation, can Israel truly justify asking for millions of dollars in charity from Jews abroad, especially when Israelis themselves give so little?Consider this. In the period since the end of World War II, Israel is the largest recipient of US foreign assistance, totaling over $135 billion, most of it military. And it will remain so: a memorandum signed on September 14, 2016, gives Israel $38 billion over the coming decade.We are told that this US aid serves American strategic interests. I wonder, though, whether part of it could be sent instead, say, to failed Central American states, to prop up their economies and stem the flow of migrants. I know there are those who will regard this suggestion as bordering on treason.To understand better why Israelis don’t give more, I spoke with Dr. Aharon Mor, former senior Finance Ministry economist who has assembled a working group to establish a National Council on Philanthropy.According to the Central Bureau of Statistics, contributions in 2018 to Israeli NGO’s from Israel’s private sector rose by 7%, more than double the rate of GDP growth, and totaled NIS 11.3 billion ($3.2 billion). But at the same time, contributions from abroad exceeded this sum, totaling NIS 12.8 billion ($3.6 billion). How does Israel rank in terms of the sums Israeli individuals, families and companies give to philanthropy? Why do you believe Israelis contribute so little?“Charitable giving is low. In GDP percentage terms, Israel’s giving is only one-third that of US charitable giving. Half of Israel’s public companies do not contribute at all. Startups contribute to society very little.I can see two reasons for low contributions. First, Israelis believe that they give enough. They give three years of their lives while serving in the army, and then more while serving in the reserves, and they pay high taxes.“Second, the typical Israeli is a taker and not a giver, believing that giving makes him a fryer, a sucker in Hebrew slang, and by no means does he or she want to feel like a fryer. As a result, there is little public support for giving, and no support for giving in the media. On the contrary, the public and the media relate to big donors as a problem, and not as a solution. Also, Israeli leadership does not lead by example in giving.”What are the basic Israeli tax laws that offer incentives to donate to charity (e.g. allowing taxpayers to deduct philanthropic contributions from taxes)? How do these laws compare with those in other countries?“Israeli tax law enables individuals a deduction from their tax payments of 35% of their charitable donations, and for corporations, a deduction of 23%. The deduction is from their actual tax payments and not from their total taxable income, as in the US for example. And the Israeli system is progressive, favoring low income donors, while the US system is regressive, favoring high income donors. The Israeli system is regarded as a fairer system.”So given that Israeli tax law is very liberal regarding philanthropy, why don’t more ordinary Israelis take advantage of the tax benefits? Of the total potential amount that could be deducted from taxes, how much is really used? And why does the actual amount fall so short of the potential?“Less than 20% of the total potential value of charitable donations is used to take advantage of the tax benefits. In order to be entitled to the tax benefits from charitable giving, donors need to file an annual report with the tax authorities, and they are reluctant to do so.”I understand that employees could contribute to charity and reduce their taxes, if employers agreed to process the deduction. But many employers choose not to. Why? And what can be done?“The option of allowing donor tax benefits to employees in their monthly salary is available for most employers. However, employers do not choose to do so either because they are not aware of that option, or because they are reluctant to encourage their employees to donate as the employers themselves do not ‘lead by example’ in giving.“One of the biggest employers is the Israeli government. The Israel Tax Authority is planning to computerize the process of obtaining tax benefits for donations, which will allow them to extend these tax benefits directly to the donors without the need of donors of submitting a special tax report.”You have proposed the establishment of a National Council for Philanthropy. Please outline your proposal and show how this could help boost “give!” instead of “schnorr.”“There is an urgent need to upgrade Israeli charitable giving for important economic and social issues, and this upgrade will result in a better quality of life. Charitable giving enhances leading by example, compassion, helping the needy, and as a result creates an essential feeling of community, and all these improve the quality of life.“A major tool for achieving this is to establish the National Council on Philanthropy headed by Israel’s president that will keep ‘giving’ on the public agenda and enhance upgrading it. We propose to adopt the successful system existing for hundreds of years in the Jewish Diaspora, where the Jewish community raises funds for its needs, led by the heads of the community.”ISRAEL WAS once a very poor country. In 1948, per capita GDP (Gross Domestic Product) was about $1,500. Foreign philanthropy was crucial and justified.Today, Israel is among the world’s wealthiest nations, ranked among the top 10 countries in the number of millionaires relative to population size. Moreover, it has 17 billionaires. Why, then, should Israel schnorr? Why can’t we ourselves give much more to charity? Why should Israel be an anomaly – a rich country that receives handouts?Many Jews abroad are well off. They love Israel and freely donate to improve Israel’s well-being. A well-oiled machine run by professionals exists to maximize these donations.But I believe even wealthy Diaspora communities should keep more of their money at home – a thought many Israelis will find shocking.Boston, for instance, is a community I know well. It has a superb system of Jewish day schools. Partly as a result, a majority of intermarried couples in Boston raise their children as Jews. Few other cities can say this.Day schools are very expensive and becoming even more so. Why should not more US communities build Boston-like schools? Perhaps Israelis could contribute both money and teachers to this campaign. It is definitely in Israel’s strategic interest that American Jewry remains Jewish.Six years ago, Hebrew University Prof. Hillel Schmid told Haaretz journalist Lior Dattel: “Israel could boost its legitimacy in the world by being a bit more generous. We see ourselves as global citizens, and want to be considered part of the family of nations and enlist the support of countries around the world, but Israel has no apparatus that encourages donating money overseas. It’s something that doesn’t even occur to the average Israeli.”Little has changed since then. Instead, the ultra-Orthodox parties in the coalition government have deeply offended Conservative and Reform Jews abroad. Send us your money, is the message, even though you are not really Jewish.I want to emphasize that I am not belittling the massive contributions to Israel of benevolent foreign donors. They have changed the face of my country. Just a few examples: Perrier magnate Gustave Leven’s Rashi Foundation, the Rochschild’s Yad Hanadiv, Charles Bronfman’s Keren Karev, Lily and Edmund Safra’s Children’s Hospital, Angelica Berrie’s Nanotechnology Institute at Technion, Mort Mandel’s Leadership Institute, Eddie and Jules Trump (no relation to the US president) and their educational foundation, Home Depot magnate Bernard Marcus’s Israel Democracy Institute, and many, many others. At my place of work, Technion-Israel Institute of Technology, virtually all of the buildings on campus were funded by foreign donations. All this is worthy – and in my view, shames us Israelis who fail to respond in kind.The U’netane Tokef prayer ends: The origin of man is dust, his end is dust. He earns his bread by exertion and is like a broken shard, like dry grass, a withered flower, like a passing shadow and a vanishing cloud, like a breeze that blows away and dust that scatters, like a dream that flies away.As we do our annual ethical audit and seek inscription in the Book of Life, charity deserves a major boost, alongside prayer and repentance. Perhaps post-election is an ideal time for Israel to rethink its philanthropy and expand it dramatically.Let’s face it. We are rich enough to give far more than we receive. If our lives are indeed ephemeral, like blown dust and a passing shadow, they are given meaning by giving to others. It’s worth a try.The writer heads the Zvi Griliches Research Data Center at S. Neaman Institute, Technion and blogs at www.timnovate.wordpress.comHow to get Rich people to giveIn the past decade, Israeli millionaires have flourished. Today Israel ranks in the top 10 countries in the world in millionaires per capita. According to Sophie Shulman, reporting for the business daily Calcalist, personal wealth in Israel rose by 45% in the past decade, mostly held by the very rich: “The rise in the number of heavyweight millionaires – those with at least $30 million in their account – is faster than the US, UK, and nearly all of Western Europe, and is second only to that of Ireland... The latest report by Credit Suisse, published in late 2016, outlined 105,000 multi-millionaires in Israel, but took into account real estate investments and other assets besides cash. That same report listed 18 Israeli billionaires, 25 Israelis worth between $500 million and $1 billion, and 277 people worth between $100 million and $500 million.”Readers may recall my friend Arie Ruttenberg’s trenchant explanation of “the great money mystery” (The Report, June 10). In our recent conversations, Ruttenberg addressed “the great philanthropy mystery” – why millionaires donate relatively little to charity and how to overcome this. Here is his plan: “Take the more than 100,000 Israelis who are millionaires. They hold most of the country’s wealth. Why don’t they give more to charity in their lifetimes? They fear they will need the money and they want to bequeath it to their descendants.Here is my plan. Create a Sovereign Fund, let’s call it the Forever Fund. Norway, Abu Dhabi, China, Kuwait and Saudi Arabia all have them. Ask the wealthy to deposit half their wealth in it. If they need the money while they are alive, donors can at any time withdraw the principal. Donors receive massive public recognition for their generous contributions. Professional investors guide the Fund’s investments, and the interest on the Fund’s assets go to projects that significantly improve the well-being of the non-wealthy. When donors die, future generations of their heirs get 1% of the contributed principal annually, forever. The advantage? Heirs of the wealthy tend to squander their inheritance; the Forever Fund ensures this will not happen. And meantime, Israel gets large amounts of wealth that serve its social needs.”
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