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11-5-20

Jerusalem’s Third Sector in the Shadow of the Coronavirus

Dr. Sarit Bensimhon-Peleg and Netta Porzycki, Jerusalem Institute for Policy Research

Background

NGOs, The third sector organizations in Jerusalem, are an invaluable asset for the entire city. Due to Jerusalem’s unique character and the unusually large size of its third sector, Jerusalem is undoubtedly the capital of Israel’s Third Sector.

The third sector organizations have been hard hit by the Coronavirus crisis, as have other sectors of Israeli society. The blow struck Israel’s entire third sector and specifically Jerusalem’s, but the crisis may be leveraged as an opportunity for the Municipality to support the significant role of the third sector in the city. Steps to reinforce these organizations, and to strengthen relationships and collaborations among third sector organizations in the city as well as cooperation between the Municipality and the organizations, has the potential to transform Jerusalem’s existing social infrastructure into a powerful national social and economic success story.

Full Document – Hebrew

How Did Third Sector Organizations Experience the Coronavirus?

The umbrella organization for Israel’s third sector – Civic Leadership – conducted a survey among the organizations to assess the extent of the damage caused by the Coronavirus crisis and its effects. The survey was conducted during the first two weeks of April 2020, and 310 organizations participated voluntarily, 57 of which are Jerusalem organizations.

The staff of the Jerusalem Institute for Policy Research analyzed and processed the data about the Jerusalem organizations which was collected from the survey. The most worrying element with respect to the damage caused to the organizations by the crisis relates to the forecast concerning their capability to continue to operate, with 41% of the Jerusalem organizations that responded to the survey estimating a medium to high probability that they will not survive the crisis. Many of the organizations state that the financial problem is the one which worries them the most at the current time. It should be noted that the Coronavirus crisis occurred at a time when numerous non-profits and organizations were contending with a pre-existing crisis situation, resulting from the national political paralysis due to the absence of a functioning government for more than a year, and the ensuing lack of an approved government budget.

The full policy paper reviews the importance of Jerusalem’s civil society for the city, and recommends a series of steps to implement to enable the civil society to continue to exist and to improve its position.


Main Recommendations for Maintaining and Strengthening the Third Sector in Jerusalem

 

1.Regulatory Steps to Exit the Crisis

Government Steps

Grant 100% tax credit for every donation to a registered non-profit in 2020 and cancel the payroll tax (a 7.5% tax levied on the salary of all employees at a non-profit) for the year 2020.

Municipal Steps

Reduce or cancel the property tax for the year 2020. Establish a fund to supply assistance grants to deserving third sector organizations.

2. Strengthen the Collaborative Infrastructures between the Municipality and the Third Sector Organizations

Establish a unit at the Jerusalem Municipality whose mandate is to develop civil society, by means of a model similar to that created for Jerusalem’s Young Adult Center which was established at the initiative of the Municipality about a year ago. Such a unit could become a municipal resource for organizations and function as a “one stop shop” for third sector organizations with respect to bureaucracy, open calls, opportunities and grants, while also granting them a tool kit, which would comprise professional training, and workshops teaching how to create a work plan, build an annual budget, raise funds from donors and foundations, and develop public relations and relationships with the media. A similar model exists at the London Municipality.

3. Boost the Capacity to Develop Self-Generated Income

Non-profit organizations in Israel are permitted to earmark up to 25% of their income as profit. A few programs exist which guide non-profits in the process of creating and identifying sources for self-generated income, for example The Mahalach Foundation. The establishment of a similar program in Jerusalem could contribute much to the future resilience of third sector organizations in the city. It could be operated by the Municipality in conjunction with philanthropic foundations which are already active in Jerusalem. We believe that the most suitable group to establish such a program in Jerusalem is one of the largest foundations active in the city, which has years-long relationships and longstanding familiarity with the civil society in the city and with the third sector organizations which operate there. The model could be an integrative model, with financing from the municipality and execution conducted by the foundation.

 

4. Strengthen the Third Sector Ecosystem in Jerusalem

The tremendous number of civil society organizations suggests that it would be wise to strengthen the relationships among the non-profits in an effort to deepen their professional and social familiarity with one another, to develop a sense of community, and to bolster cooperation among the city organizations. The document proposes steps such as: The establishment of a Jerusalem civil society headquarters and low-fee workspaces; the establishment of designated hubs for social entrepreneurs from the Ultra-Orthodox sector, the Arab sector, and the general population; and the development of supportive frameworks to reinforce the connections among the organizations from diverse sectors of the city.

Full Document – Hebrew