The global economic crisis is already being strongly felt by NGOs and philanthropic foundations. Major donors, who have lost substantial amounts of money, are in no rush to commit to new contributions. Nobody knows what the future holds, so even those who still have millions in their pockets, prefer to be cautious. Medium and small-scale donors, who were in the past able to contribute, are hesitant about answering the call to give in these times. For those who are not eager, the economic crisis represents an excellent excuse for no longer giving.
Whatever the reasons there is one conclusion: the number of potential contributors has been greatly reduced, and with it the money set aside for philanthropic aims. Consequently, NGOs and philanthropic foundations can expect to feel a substantial fall in the volume of donations, and the first to be hit will be the welfare NGOs assisted by these important donations.
The NGOs and foundations come into the crisis already bruised and battered. For some years Jewish organizations have found it much more difficult than in the past to raise funds for Israel. The new generation in the Diaspora does not remember the fire of the Holocaust and does not appreciate the importance of the establishment of Israel. Giving to Israel can no longer be taken for granted as it was in the past. Those who continue to give, prefer to do so through family foundations that they set up themselves. These foundations, which have managers and clerks, generate a bureaucracy that delays the transfer of funds and reduces them.
The erosion in the value of the dollar until recently also placed a burden on the development of NGOs, which had programs based on a representative rate of NIS4/$ or more, and suddenly found themselves missing 30% of the value of the money that received.
Despite all this, it is possible to see the economic crisis, not only as a breaking point, but also as an opportunity for the future. It is a chance to reduce expenses and make the organization more efficient, to rethink needs and priorities. The economic crisis also shows Israeli NGOs and foundations that they cannot rely only on overseas philanthropists but must also try to work together with Israel's business community for the sake of the country's poor.
This is the time to mobilize the younger generation of donors and find people who care and are prepared to connect themselves to long-term activities, even if they cannot make immediate contributions. It is worthwhile making efforts to connect donors to unique projects that they can identify with over the years. Experience proves that donors to museums, universities and hospitals, as well as to the Jerusalem Foundation, become connected to projects and continue to contribute to them over the years.
The writer is President of the Jerusalem Foundation.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008