Stay Updated

    22 July

    | 2020 | 12:30

    Roundtable: The Third Sector in Jerusalem

    • Free
    • In Hebrew
    • Invites Only
    • Online
    • Free
    • In Hebrew
    • Invites Only
    • Online
    Roundtable: The Third Sector in Jerusalem

    Following our recently-published research regarding Third-Sector organizations in Jerusalem, The Jerusalem Institute for Policy Research held a round-table meeting to discuss recommendations arising from the research with high-level representatives from the Jerusalem Municipality, local civil society organizations and philanthropic funds.

    The third sector is a source of strength to Jerusalem

    The discussion was chaired by Lior Schillat, Director General of the Jerusalem Institute. In his opening remarks, he noted that in the last few years the Institute had published a series of research papers discussing civil society and the third sector, as well as civil society in East Jerusalem (Hebrew). These were published under the assumption, later shown to be correct, that the third sector is a major economic force in Jerusalem. See the meeting recording and presentation below.

    Third sector – definition

    Dr. Sarit Bensimhon-Peleg presented the research, beginning with a review of the definition of the three sectors of the economy:

    • First sector – the public sector – government and local authorities
    • Second sector – the business sector
    • Third sector – registered non-governmental organizations (NGOs), not including other civil society activities.

    Why is the third sector important?

    The answer to this question is both social and economic. In recent decades, the State has divested itself of many of the services it had provided, entrusting them to the third sector: today, the third sector acts almost as the operational arm of the State, and it is from this sector that social leadership in Israel is emerging.

    In Jerusalem there is one third-sector organization for every 212 residents.

    Other important findings:

    • 25% of Israeli third-sector organizations are located in Jerusalem, and 23% are located in in Tel Aviv.
    • 42,000 third-sector organizations are registered in Israel, 14,000 of which are currently operating under normal management procedures. Of this number, 4,200 organizations operate in the Jerusalem region – 3,000 in Jerusalem itself.
    • The Jerusalem Institute estimates that the joint annual budget of all local NGOs is between 15 to 25 billion NIS, and they are estimated to employ some 100,000 to 200,000 personnel.
    • The research concentrated on the 89% of NGOs in Jerusalem whose annual turnover is less than 10 million NIS. These NGOs deal mainly with education, higher education and religious services.
    • The larger NGOs are important employers in Jerusalem, while the smaller NGOs have yet to fulfil their potential as employers.

    Strengths and weaknesses of the third sector

    • NGOs know how to work with philanthropic funds, but find themselves constantly competing for resources.
    • NGOs do not know how to work with government or how to bid in government-issued tenders.
    • There is a significant lack of coordination between the various NGOs and a lack of adequate infrastructure to enable cooperation.
    • There are significant tensions between NGOs’ independence and their dependence on funding authorities.

    Main recommendations for the development of the third sector in Jerusalem

    Professional skills:

    • Establishing a unit dedicated to the third sector in the Jerusalem Municipality
    • Encouraging development of independent sources of income
    • Establishing an NGO House in Jerusalem

    Strengthening ties between NGOs:

    • Creating “hubs” for social entrepreneurs
    • Cooperating with Community Councils


      • Exemption from municipal tax payment
      • Reducing the Employer’s payroll taxes
      • Clarity regarding VAT exemption for non-profit organizations submitting governmental and municipal bids

    Responses to the Research

    Shai Doron, President, The Jerusalem Foundation

    Shai Doron

    The Jerusalem Foundation is not just a philanthropic actor in Jerusalem’s third sector, but also an active participant.

    While the research document is full of inspiring remarks, a number of points must be clearly stated: the problems facing the third sector, as presented in the beginning of the research – are acute: a lack of efficiency, duplication, competition for resources. We are living in a crisis: already at the beginning of the COVID-19 pandemic, 41% of the NGOs stated that they would find it difficult to survive in their current state. As a philanthropic fund, we hope to be able to invest our funds wisely and rationally. The future ahead is expected to be tough – both for philanthropy and for the NGOs.

    Community Councils have so far played a major role in dealing with the COVID-19 crisis. They have of late functioned extremely well. They have it within their power to lead. They have no choice but to become umbrella organizations for the third sector.

    Another report from the Jerusalem Institute dealt with Civil Society in East Jerusalem (Hebrew). Survey results showed that of 300 NGOs, only 24 replied that they were willing to cooperate with the municipal or national government, while 200 NGOs responded that they were strongly opposed to any such collaboration. We must ask ourselves – how can we overcome the constraints between political issues and daily life? It is important that we do not miss the significant potential here.

    Mr. Moshe Leon, Mayor of Jerusalem

    Moshe Leon, Mayor of Jerusalem

    Responding to the research recommendation to establish an NGO House in Jerusalem, Leon stated that this issue is being examined. He explained that the widespread expansion and building in the vicinity of the city’s entrance, as well as elsewhere, includes public spaces which will be used by the municipality. He expressed his hope that a suitable location for an NGO House could be found there. He also said:

    I am very proud of the municipality regarding its activities in the third-sector field. This is a most important issue in Jerusalem. I have seen this especially during the current COVID-19 pandemic. All NGOs, as well as other organizations, got together and helped us get through this period successfully. I admit that during the second wave we encountered difficulties in ‘energizing’ all of the bodies again. This is both because we are not in a national lockdown, as we were during the first wave, and because each organization has its own ongoing work to do.

    We must issue an urgent wake-up call to all organizations that can assist during the ongoing pandemic.

    Jerusalem is the largest center of third-sector organizations in Israel, with 25% of all Israeli NGOs operating there. Jerusalem is where these organizations have grown, and their work reflects the local spirit and ethos – creativity, voluntary work, values. During these trying times we have seen the activities of these NGOs and realized just how important they are.

    Amir Biram, Director, New Spirit and the Hut Ha’Meshulash

    Amir Biram

    Biram is the Chair of the Board of the Hut Ha’Meshulash (working with at-risk teenagers) and the Chair of the Board of Ruach Hadasha, or New Spirit (offering activities for students and young adults). He is on the board of directors of the Bezalel Academy of Art and Design and the Kemach Foundation (offering career guidance for Haredi men), and a member of the Haredi Institute for Policy Research.

    Biram noted that there is a great variety of NGOs in Jerusalem – including pluralistic, Haredi and Arab organizations. He claimed that NGOs are open to inter sectoral and interdisciplinary cooperation. Biram is not fazed by claims of third-sector duplication. Just as in the business sector, duplication is not always a bad thing: it can sometimes be a sign of competition. However, merging and gaining professionalism are always desirable.

    Biram stated that real estate can affect third-sector activities. One example is that of “Beit Alliance” – this building was made available to New Spirit, which used it to create diverse activities for many young populations in the city. Biram agreed that there is a need to establish an NGO House in the city and sees considerable importance in that endeavour. He believes that the need is not just for the physical facilities that such a House could offer, but that the move would help all NGOs and push the third sector in Jerusalem forward. He added that, if the Mayor were agreeable, he would be willing to take on the task himself and lead the project, locating empty buildings to find the most appropriate location for such a House.

    Strengthening Jerusalem: collaborative action – municipality, civil society and philanthropy

    Anat Zur, Director, The Jerusalem Foundation


    Anat Zur

    Joint action of the public, the private, and the third sector is a holy trinity that allows for the growth of both Israel’s society and economy. Today, relations between the public sector and the third sector are not well regulated – there is either no regulation at all, or too much regulation. Out of an understanding that the third sector is a source capable of powering civil society in the city, appropriate regulation needs to be developed. Leveraging the power of the third sector is dependent on the ability to create a structured connection between the municipality and the third sector, as well as on strengthening ties between the NGOs themselves.

    Zur noted that she sees an advantage in the multitude of NGOs dealing with the same issues as this creates healthy competition. On the other hand, it may also promote a sense of chaos – one both finds NGOs treading on one another’s feet, and a lack of NGOs dealing with certain issues. She claims that if we are to be realistic, just as it is not realistic to expect to be able to merge municipalities, it is unrealistic to break-up and restructure NGOs. But someone has to take charge, and there is a lack of a guiding hand. Some examples are Rashut Ha’Rabim, and the hub for community leaders in social and economic fields. Within this context, Zur called on the municipality to support umbrella organizations and invest resources to help them (drawing on the rationale that strengthening the third sector would be to the municipality’s advantage too, as its operational arm on the ground).

    NGO House

    An NGO House in Jerusalem does not have to operate in the same way as the one in Tel Aviv. Zur views Alliance House as a mini NGO House. The main thing is for it not to be a WeWork of sorts, but something that could facilitate capability-building and the attempt to secure joint-funding and resources. It could be possible to set up an NGO House for NGOs which specialize only in certain areas of activity, as opposed to a general NGO House. However, having a physical building is in any case not in itself sufficient. A manager dealing with content and able to identify all of the needs will be necessary.

    Independent funding sources:

    Some fifty years ago, when the number of NGOs was small, the philanthropic ‘cake’ was very large. Today, however, there are some 3,400 NGOs in Jerusalem, all competing for the same funding. Our goal should therefore be that 70% of an NGO’s funding should come from independent funding or from the social sector, with the remaining 30% coming from donations. Compare this with the current situation, where the goal is merely to reach a level of 30% in independent funding.

    Lirit Serphos, Head of the Inter-Office Cooperation Unit, Prime Minister’s Office

    Serphos opened by stating that the establishment of an Inter-Office Cooperation Unit is in itself proof of the importance the government assigns to strengthening and improving cooperative working.

    The Unit works with various types of organizations, and in light of that, it operates according to different models of cooperation:

    • Some NGOs are actual service providers, especially in social fields.
    • Some NGOs are supported by the State, in accordance with specific criteria.
    • Some joint initiatives operate with 50% fund-matching. Here, the aim is to create partnerships based not only on joint-funding but also on joint planning and management.

    Instability exists not only in the philanthropic world but also in government

    All cooperation models involve some dependency on government, which carries with it a price – the government may be unstable, ministries’ priorities are constantly changing, funding bodies always have a say, and there is no real independence. Another example of third-sector management is in Scandinavia, where the third-sector is completely dependent on the government for budgets. The creation of funding sources in Israel requires NGOs to apply creative thinking: some organizations are of course better at this than others.

    Government roles in promoting the third sector:

    1. Making funding sources accessible – the main sources available to the State are the Estates Fund and the Administrator General’s trust.
    2. Easing bureaucracy: Israeli Corporations Authority is making significant efforts in this area.
    3. Assisting NGOs to work with the Ministry of Finance’s Accountant General Office to survive during the COVID-19 crisis.

    Strengthening connections and ties

    Cooperation is crucial: the last couple of years have seen a change in government – a move towards a joint declaration that decisions should both be made and implemented together with the public, relevant NGOs, and local authorities. The government must not talk only with and to itself – a lively discussion is necessary. The government directs the ministries to operate collaboratively. Interpersonal connections are in fact an asset, although this is far from obvious. Ultimately, much depends on relationships and acquaintances. We have established several new roles that can act as bridges or gates for cooperation – including public participation managers, philanthropy leaders, and cooperation directors. During the COVID-19 crisis, we have convened round-table discussions about resilience in emergency times. In less than 24 hours, six separate round-tables were established, to help deal with people in need of special care. Some of our recommendations have already been implemented. To establish connections requires a place for dialogue, but more importantly, it requires someone who actually convenes the discussions.

    Serphos believes that municipalities have a crucial role to play, and that to strengthen ties between third-sector and municipal bodies, it is also recommended to hold municipal-level round-tables in a model similar to the inter sectoral round-table in the Prime Minister’s Office. She noted that her unit would be happy to share its knowledge and experience.

    Iris Shalgy, Director, Mahalach Fund

    Developing independent income

    Shalgy established the Mahalach Fund with the aim of helping NGOs develop independent income. It is the first fund in Israel that developed a method for generating independent income which also took responsibility for the entire process.

    The Mahalach Fund model

    When developing their model for assisting NGOs, the Mahalach Fund deliberately worked with NGOs of various sizes. The Fund’s aim was to show that their model is successful independent of the organization’s size; it works because of the quality of training received by the organizations. During their first year, they worked with the Sexual Assault Crisis Center (whose annual turnover is 2 million NIS) and with Enosh – The Israeli Mental Health Association (whose annual turnover is 90 million NIS).

    Since then, although over 100 NGOs have enrolled each year to the Mahalach program, the Fund is only able to mentor some 8 NGOs annually. Because of that, they created a more advanced course lasting 37 academic hours (over three months) in which NGOs learn how to generate independent income.

    The COVID-19 pandemic made it unequivocally clear that independent income is not merely “nice-to-have,” but a critical issue. The conclusion is that independent income must lie at the core of organizations’ activities. As 2020 and 2021 are expected to have a calamitous effect on social NGOs, the Mahalach Fund wishes to share its knowledge about independent funding. Shalgy offered to open a course for social organizations in Jerusalem as well as to create a partnership between the Mahalach Fund and the Jerusalem Foundation.

    Lior Finkel-Perl, CEO, Civic Leadership

    Finkel-Perl regarded the discussion focusing on third-sector infrastructure as the most important one. We have only just begun to see the impact of the COVID-19 pandemic on NGOs, and when it comes to the support the third sector will require during 2021, she believes what we are witnessing is only the tip of the iceberg. We must invest many resources in creating infrastructure for the future, in two main directions:

    1. Physical Infrastructure: the NGO House in Tel Aviv is an example of physical infrastructure – a result of inter-sectoral cooperation. The NGO House acts as the nerve center for both NGOs’ activities and their ties to the government. Government representatives have even visited the NGO House several times for lectures and discussions. There is a strong wish to copy this model to create a partnership between all three sectors – the municipality, the third sector and the business sector. Wonderful things can happen in such a partnership: it allows for professional improvement, skill development, and the prevention of duplication.
    2. Building relationships: an infrastructure of inter-sectoral and intra-sectoral relations, creating sustainable discourse mechanisms. We have seen that it is possible to create fast-reacting mechanisms in times of emergency – if efforts are put into this, and if they exist in normal times. NGOs’ CEOs do not generally invest sufficient time on such matters as part of their routine work because it is viewed as simply “nice-to-have.” However, we are here to say that it is actually critical.

    Establishing a third-sector unit in the Jerusalem Municipality

    Ariella Rajuan, Head of the Culture, Society and Sports Administration, Jerusalem Municipality

    The Jerusalem Municipality has been promoting the idea of an NGO House for quite some time now. The original plan was to open such a House near the Prime Minister’s home in Rehavia, which itself was supposed to move elsewhere, but this plan has not yet been implemented.

    According to Rajuan, it is doubtful whether the needs of some 3,000 NGOs can be met in the form of one NGO House. There are so many NGOs! However, Rajuan is all for the establishment of a round table, and believes that the Culture, Society and Sports Administration should play a major role in strengthening ties between NGOs and developing their professional skills and capabilities. Note that Rajuan emphasized that her focus is only on professional support, as she does not believe in strengthening NGOs financially, a move that would result in dependency on the part of the NGOs and might prevent their independence.

    Today, one can point to several existing hubs which are part of the Jerusalem third-sector ecosystem. There is no doubt that more can be done to strengthen the ties. What can be learned from the research? It reinforces our actions in the municipality – what we are already doing and what we plan to do. It also stresses the importance of building an intangible infrastructure for the third sector, aimed at creating connections and collaboration. As for the issue of the role of Community Councils, here too, more can be done, and we will be happy to play a role in this as well.

    Eldad Weil, CEO, Jerusalem’s Young Adults Center

    The third sector is a significant employer in Jerusalem

    Third-sector employees in Jerusalem have a variety of educational backgrounds, including: psychology, Jewish thought, and social work. Graduates in these disciplines find themselves working in various social roles: in NGOs, in the municipality, as teachers or in the public sector. We can see that there is a vacuum, namely an entire sector that has not been properly characterized. The third sector should properly be seen as a significant employer – a total annual budget of 15-25 billion NIS makes it one of the largest employers in Jerusalem.

    Weil offers two potential lines of action:

    1. From the point of view of the organizations – they need to create coalitions, establish an “NGO Association” (similar to the Manufacturers Association), and develop a structured and organized discourse.
    2. From the point of view of the municipality – it needs to establish a department for NGO development, or even a project team under the Society Department. Just imagine that! A unit similar to the Jerusalem Development Authority, focusing on promoting third-sector employees and encouraging them to stay in Jerusalem.

    Weil noted that “there are too many hubs in Jerusalem, and they are empty.” He believes that such hubs should operate at the neighbourhood level – in Community Councils and libraries. Nonetheless, he believes that a solution for the larger employers must be found and that the model should not be that of an NGO House, as it can meet the needs of only a select few NGOs. He believes the model has to answer a wide variety of needs, and promotes a solution similar to the one created in Lod. We need a different idea, trying to think big, and not merely to create an organization only meeting the needs of 5 small NGOs (each with a budget of 1 million NIS). A model with significant impact is needed, together with a track that will facilitate grants and subsidies to those service-providing NGOs who join it.

    Yossi Klar, CEO, New Spirit Jerusalem (Ruach Hadasha)

    Klar sees considerable importance in the creation of hubs for social entrepreneurs and third-sector organizations within the neighbourhoods themselves, and not only in the city center. He believes that these hubs could be operated from within Community Councils, or, alternatively, from independent locations. In his view, hubs do not only supply a place to stay and work, but help bring about cooperation, and encourage the pooling of resources and saving on expenses.

    Klar also noted that the re:street program, operated by New Spirit, pays the city tax for NGOs, and that there should be relief on property tax for such bodies and hubs, so as to help create a growth-engine in the city. He believes the city should strive to promote socially-minded businesses, enabling the civil society to become more of an employer. In itself, this initiative struggles to make ends meet so that supporting it would help create both social and economic value.

    Using the Community Council infrastructure as an anchor for working with third-sector organizations

    Moshik Atik, Jerusalem Regional Manager, Israel’s Association of Community Centers

    Community Councils with high independent income before the COVID-19 crisis have suffered the most

    There are 30 Community Councils in Jerusalem, with an overall budget of 500 million NIS. We have discussed the need for a higher percentage of independent income, but we must realize that during the COVID-19 crisis, Community Councils with high independent income are the ones that were the most badly hit: in the early days of the pandemic, all activity was shut down. The Yuvalim Community Council, which routinely enjoys an independent income which amounts to some 60% of its overall budget, is today struggling to make ends meet. In comparison, Community Councils which make do with an independent income of only 20% have continued to function well even after the pandemic broke out.

    In this context, Atik noted that the approach towards the use of facilities should be based on the work of integrating umbrella organizations and on co-working, especially during the pressing times resulting from the COVID-19 pandemic and its effects. Atik noted that all the hubs mentioned can use Community Council facilities, and that physical space in the Community Councils can be allotted to representatives of the third sector.

    Inter-sectoral work

    The Community Councils promote inter-sectoral work and help create cooperation between communities in Jerusalem. One such example is the ongoing cooperation supported by the Jerusalem Foundation, which has already been taking place for over a year, between the Sur Baher Community Council and the East Talpiot Community Council. This joint activity, entitled “Women in Conversation,” consists of language-learning meetings, between 50 women from Sur Baher (a Palestinian East Jerusalem neighborhood) and 50 women from East Talpiot (a Jewish East Jerusalem neighborhood). The program has improved neighborly relations and lowered much of the tension between the two neighborhoods.

    Atik also sees considerable importance in inter-sectoral round tables – not just at the municipal or national level, but also at the neighbourhood level. In such round-table meetings all civil organizations working within the neighbourhood convene with the Community Council for joint discussions and action. In this context, he mentioned the work done during the early months of COVID-19 in the Neve Yaakov Community Council.

    Eli Ya’acobi, Chairman of Neve Yaakov Community Council

    Ya’acobi continued Atik’s comments, and referred to the fruitful cooperation between NGOs and the local Community Council. This began with the outbreak of the COVID-19 pandemic, at which point he assembled all NGOs for a discussion about goals and task allocation. Ya’acobi said that he also hopes to continue this cooperation in normal times.

    Ya’acobi stated that on the one hand, he believes in the resiliency of civil society and believes there are activities that the municipality cannot undertake by itself, but on the other hand, even though civil society organizations work on the ground and are very familiar with local needs, they require an integrating organization. He views the Community Council as such an umbrella organization, and wishes to empower it in this respect. He called on the municipality to allow Community Councils to employ volunteer coordinators. The result is expected to leverage results, both regarding help on the ground and in allowing the expansion of community initiatives.

    Inbar Bluzer Shalem, Director, Rashut Ha’rabim

    Bluzer Shalem views the third sector as a solution for many of the city’s challenges. From her experience as the director of Beit Rashut Ha’rabim, located within of the Yuvalim Community Council premises, civil society can help Community Councils in solving challenges and problems on the ground.

    Bluzer Shalem believes that NGOs are seeking an environment and partners with whom they share an ideology, and that such an environment enables internal cooperation for everyone’s benefit.