As a charitable foundation committed to creating and supporting the nonprofit ecosystem in Israel, we have witnessed the impact of Israel's high-tech boom on philanthropy over the past two decades. Israel boasts the largest concentration of start-ups outside of Silicon Valley and the good news is that an increasing amount of the incredible wealth created here is being allocated to philanthropy. For instance, the sale of the navigation app Waze to Google generated $1,500,000 for nonprofits in Israel through a venture fund that allows Israeli start-ups to donate stock options to charity.
As a result, Israel has finally moved away from its days of inordinate dependence on foreign philanthropy. As much as half of all the donations to Israeli causes (around $4 billion annually) are now made by Israelis. On the other hand, the steady stream of foreign donations to Israel keeps flowing. Even now, as a developed and flourishing start-up nation, Israel still brings in an average of $1.5-2 billion in US charitable donations every year. In an average year, 38% of all money donated by Jewish individuals in the US goes towards Israeli causes. In periods of crisis, such as the 2014 Israel-Gaza conflict, these figures are exponentially higher.
Likewise in the UK, Jewish giving to Israel remains strong, particularly amongst the religious Jews. An incredible 93% of British Jews annually give something to charity, compared to just 57% of the total UK population. The lion share of British donations goes to Jewish charities including Israeli causes, with 83% of British Jews who identify as religious prioritizing Jewish or Israeli charities.
Despite these impressive numbers, however, many local mission-based organizations in Israel are struggling to stay afloat. They are unable to pay for office space, hire the staff they need and offer their services despite the increasing dependence on local charities to close the gaps in the country's socio-economic safety nets caused by public sector retreat. As a result, many local nonprofits lack the capacity to meet immediate needs, leaving the communities they support in the cold (sometimes literally).
Why is so little of the money donated by Israeli and foreign philanthropists finding its way to the local community-based organizations that address complex issues like homelessness, education, and family services?
The disconnect between philanthropists and local nonprofits
One of the problems is that most local nonprofits do not understand the approach to philanthropy embodied by Israel’s new high-tech donors. These new philanthropists apply the language and principles of high-tech and venture capital to their philanthropic activities. They view philanthropy as an investment and want their beneficiaries to demonstrate the impact of their investment by applying sophisticated metrics to assess the success of the programs. Local nonprofits, on the other hands, often communicate about the fundamentals of their work in a moral language that entrepreneurs consider ‘vague’.
Furthermore, many new philanthropists are simply not aware of local nonprofits and local needs, especially in the peripheral regions of Israel like the Negev and Galilee. The problem is exacerbated by the fact that nonprofit leaders and the new philanthropists move in different social circles, which makes it easy to reduce each other to the stereotypes of the self-involved entrepreneur and the well-meaning but clueless good Samaritan.
When it comes to foreign philanthropy, we also see a significant knowledge gap and disconnect between local nonprofits and their potential overseas donors. Instead of donating directly to Israeli charities, many Diaspora Jews donate to the Jewish Agency or the American Jewish Joint Distribution Committee and large fundraising organizations such as the Jewish National Fund, Friends of the IDF, Magen David Adom, and the Joint Israel. While these foundations do incredible work, they are part of the traditional, ossified Jewish philanthropic bureaucracy that is geared towards funding existing and well-known projects rather than new initiatives that are more nimble and better equipped to deal with the rapidly changing social and religious needs of the Jewish communities in Israel.
Helping fledgling nonprofits take-off with the incubator/accelerator model
So how can Israel’s emerging philanthropic community, the Diaspora philanthropists, and local nonprofits work together in more connected ways to effectively address the socio-economic challenges we face in Israel?
The answer can be found in Israel’s high-tech sector, where incubators and accelerators help start-ups and early-stage companies speed up their growth and success. Based on this model, the Robin Hood Israel foundation developed its own incubator/accelerator for Jewish and Israeli nonprofits to guide nonprofits through the early stages of organizational development and enhance the impact of every donated dollar: HaYoreh (First Rains).
The incubator/accelerator model enables HaYoreh to provide the scale, time, and the professional management needed to magnify the social impact of individual nonprofits, make more effective use of the scarce available resources, and explore new solutions to social problems with an independence that government can never have.
HaYoreh not only acts as a capital provider, providing access to investors and using its own platforms to raise funds from private donors, but is also a fully engaged partner providing advice, management assistance, and a range of other non-cash resources such as organizational and marketing/communications support.
We also create opportunities for local nonprofit leaders and Israel’s new philanthropists to start a dialogue about local issues and potential solutions by providing them with workshops, and other platforms that allow them to connect, exchange information and share best practices. Furthermore, we train our nonprofits in how to use business metrics to provide detailed reports on the impact of their work and ensure philanthropists that they are getting a social return for their investment. This also helps nonprofits feel more comfortable to appeal to foreign donors directly rather than applying to be included in the charity appeals of US-based Jewish federations and foundations.
With over 30,000 registered Israeli charities and a growing number of Jewish philanthropists, incubators/accelerators are the most effective way to provide nonprofits with the support they require to deliver effective and privatized public services and strengthen the Jewish homeland by addressing complex challenges on a local level.
 The Algemeiner, Israeli Charities Profit from Google’s Waze Acquisition, 10 September 2013.