Protecting the Nonprofits from a Reform Fallout

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For nearly three months little else has been discussed and debated throughout the media than the potential threat to democracy by the proposed reforms to Israel’s judicial system. Professionals from just about every academic and corporate school of thought – lawyers, economists, industrialists, investors, real estate and construction – have provided personal insights on what might be expected if the reforms, without modifications or compromises, were to get through the legislative process and be implemented. Not surprisingly, the opinions vary, ranging from utter catastrophe on one hand to greater compliance to the will of the voter on the other. But while an understanding of how the reforms will impact our military, banking, and medical systems, what has thus far been ignored is how the reforms will affect the well-being of that sector devoted to nonprofit activities as well as to the more well-established NGOs. It goes without saying that if the intended reforms will, according to most experts, negatively impact economic growth and investment confidence, institutions and organizations that depend on fundraising campaigns and government grants, too, might face challenging times in the coming months.

Throughout the world, nonprofits are still attempting to recover from the ill effects of the pandemic. In addition to critical management and operational positions still remaining vacant, sources of funding – businesses and corporations, philanthropies, donors in perpetuity – are still recuperating from the losses incurred over a three-year battle against an invisible virus. There has been, thankfully, progress, and many of the indicators used to measure the financial health of nonprofit entities are indeed encouraging. But while there has been reason for optimism locally, the recovery of the Israeli nonprofit sector is in danger of being derailed by the division caused by the planned judicial reforms.

Nonprofits are, for the most part, silent when it comes to advocating for specific public policy, yet they give a voice to those population sectors on whose behalf they rise and distribute funds. In times of turbulence, however, few nonprofits can afford to remain on the sidelines. Insofar as doing nothing leaves their future in the hands of politicians, activists, and protest movements, some nonprofits have found it necessary to argue boldly and assertively in defense of the projects and programs they represent. Exactly how aggressive nonprofits will be is dependent on a number of factors, including the level of dependency on government funding, the quality of experience in political lobbying, and readiness for collaborative networking. These parameters, and others, have significant implications on the level of solvency nonprofits can enjoy in a country that is divided both politically and socially.

Israel has, to be sure, experienced more than its fair share of political turbulence in its 75 years of existence. Warfare, intifada uprisings, and settlement activity have all, one time or another, created havoc with the smooth running of our government and resulted in repeated elections. But while this absence of unity and stability was most certainly disruptive, Israel’s economy continued to grow and our innovative footprint in such areas as medicine, agriculture, and digitalization can be found in just about every continent. Understandably, the nonprofit sector grows in proportion to the rest of the economy; profit and generosity have always enjoyed a mutually beneficial relationship.

That relationship is now threatened by the protests that are being monitored in real time, both domestically and internationally. The judicial reforms are being viewed, incorrectly or not, as the initiative of a far right, ultra hawkish government. And donors have been historically hesitant about contributing to foundations, universities, medical facilities and cultural centers in countries that are ruled by extremists. Particularly where there appears to be a total disregard for the rule of law and authority of the courts.

Unless there will be some significant changes to the judicial reforms now being debated, Israeli institutions that have taken for granted regular donations and support may find themselves in a quandary. Several countries have already pulled funds from local start-ups out of fear that it will not be possible to engage in international economic activities in Israel. It can be safely assumed that the boards of directors of those foundations, corporations, and institutions that have routinely provided funding to Israeli are, too, questioning the security of their donations and whether the funds, sooner or later, will be directed to the advancement of oppression and bigotry.

Changes, too, can be anticipated in how new requests for grants and financial support will be evaluated. Currently, invitations to submit such requests concentrate, for the most part, on the nature of the activities the grant will be used for. Potential donors want assurance that there is indeed a need for the money and what improvements can be expected with the additional funds. Israeli requests for assistance may now have to provide additional guarantees that democratic values and human rights are not in any way being violated, and that the benefits to be realized are not contingent on where an individual or institution is positioned on the political spectrum. Those guarantees, of course, will not be easily provided.

Israel’s nonprofit sector is both robust and resilient, and is dedicated to improving the day-to-day well being of all, regardless of race, religion, sexual orientation, and political alliance. The coalition has no immediate plans to alter the ultimate mission of this sector, or to direct contributions elsewhere. Not everybody, unfortunately, has the same perception, and when a senior member of the government recklessly advocates “wiping out” a Palestinian municipality in concert with plans to remove the checks and balances provided by the supreme court, well, donors – both large and small – will undoubtedly wind-up having reservations.

The situation is not yet irreversible. Time, though, is critical. Less extremism on the part of coalition members and some compromises to the proposed judicial reforms will return any confidence that has thus far been eroded. Keep in mind that while our military-industrial complex makes Israel a safe and secure place to live, the nonprofits make Israel a better place to live. They deserve to be protected.