&##9;Israel has a relatively large number of voluntary organizations that are involved in service provision, experimentation, and innovation. In general, these voluntary organizations can be grouped into two main categories: organizations that provide services and organizations that concentrate on policy and legal advocacy. The Voluntary and Non-Profit Sector, established in 1986, is the umbrella organization of voluntary and non-profit organizations in Israel. It has more than 250 member organizations, including almost all of the major voluntary organizations. It serves as the major representative of the sector as a whole in national forums and plays a major role in advocacy and in the promotion of mutual self-help, organizational cooperation and development within the voluntary sector. The voluntary and non-profit sector as a whole is, of course, much larger than the membership of this umbrella organization. In an unpublished 1994 report, Mapping the Third Sector in Israel, which was completed for the Voluntary and Non-Profit Sector in Israel, Professor Benjamin Gidron of Ben Gurion University of the Negev, using 1991 income tax return data, found that there were 8,461 non-profit organizations in Israel.

&##9;Using the definitions and methodologies used in the Johns Hopkins international comparative study of the third sector, Gidron divided these organizations into 21 fields of activity falling into 12 categories: Culture and Recreation; Education and Research; Health; Welfare; Environment; Housing and Development; Citizens' Groups; Foundations; International; Religion; Workers' Unions and Professional Associations; and Memorial Organizations (Gidron, 1994; Salamon, 1994).

&##9;The non-profit sector comprises a substantial portion of the Israeli economy. Prior to the establishment of the state, this sector was largely supported by contributions from abroad (Gidron, et al. 1994). Today, however, these contributions, though still substantial, account for a smaller proportion of all non-profit funding, with government funding providing the largest share (46.9% see table). In 1991, its expenditures equaled more than $7 billion, 11.6% of the Gross Domestic Product. It employed 171,300 persons which constituted 13.3% of the salaried labor force, and it benefited from approximately 20 million hours of volunteer labor (Gidron, 1994).

&##9;The major sources of funding for most organizations in the voluntary/NGO sector are government and local authority contracting. In 1991 almost half of the funding came from these sources (see table Gidron, 1994). Interestingly, the three specific fields of activity within the 12 categories of voluntary organizations identified by Gidron as having the highest annual income -- Primary Health Services and Hospitals; Higher Education; and Elementary, Secondary, Vocational and Other Education -- received among the highest proportions of government funding of those surveyed. To be effective on a long-term basis, it is apparent that an organization must work effectively with the appropriate government agencies. Because the Government (on both the national and the local levels) is one of the major sources of funding for most voluntary organizations, most organizations have extensive contacts with various government agencies and tend to coordinate their policies with those of the Government.

&##9;Private fundraising is also a significant source of funding for local organizations. Gidron found that 12.3% of all non-profit income resulted from this activity: 5.6% of funds are raised within Israel and 6.7% of funds abroad. This is a higher proportion of income than in France or Germany. Thus, of all donated funds, 45% are raised within Israel. In certain categories of non-profit organizations, contributions comprise a much more substantial proportion of organizational income. In religious organizations, for example, 28.4% of all income results from contributions (15.9% from within Israel and 12.5% from abroad), with more than the 24.4% provided by the government. Civic and advocacy organizations receive more than half their income from contributions, 18% from Israeli donations and 32.3% from abroad. In contrast, general welfare organizations, including many with substantial children's services receive only 21.5% of their funding from contributions (11.2% within Israel and 10.3% from abroad).

All non-profit organizations can register with the government as "amutot", or associations, which means that they are established for purposes other than earning profits. This status is not particularly favorable regarding taxes, either for donors or for the "amuta" itself. These associations are in fact required to pay additional taxes to those paid by profit-making companies. Various non-profit organizations as well as the umbrella organization, The Voluntary and Non-Profit Sector in Israel, are lobbying to change this structure. To gain tax exempt status, an organization must be categorized as a "mossad tzibori", literally translated as public organization. This status is, for the most part, granted to organizations that directly provide services. It does not generally apply to advocacy and broader education-oriented organizations.

&##9;As in the United States and Britain, Israel provides tax concessions to donors to non-profit organizations. However, unlike the U.S. and Britain, where tax benefits increase with income, Israel provides tax credit on gifts at a fixed rate, regardless of income. Thus, the overall level of tax advantages are lower, as is the pattern of giving. Recently, tax benefits have been expanded for corporations that make voluntary donations. There are currently lobbying efforts to extend the tax benefits given to individual donors as well. In addition, because Israel's estate taxes after death are not nearly as high as those in the U.S. and England, the role that charitable donations play in limiting the effects of those taxes is not nearly as significant in Israel (Roter, Shamai and Wood, 1985).

&##9;More and more emphasis is being placed today in Israel on the development of private philanthropy. There have been several major initiatives. One is the social development program launched by Minister Shetreet, former Minister of Economic Planning, in cooperation with JDC-Israel, which is mobilizing leading members of the business community to promote private philanthropy for designated projects. A second initiative has been launched by the voluntary non-profit sector in cooperation with JDC-Israel, to establish a united campaign in Israel, which would include automatic payroll deductions through major employers. This program is in the advanced planning stages with a special grant from the United Way International. The Jewish Agency has called for the expansion of the United Jewish Appeal to include the participation of Israelis. Thus, there is a public atmosphere that is conducive to initiatives promoting private philanthropy in Israel.