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Fundraising for Israel Confronts What's Now the 'New Normal'

October 26, 2011 By:
Robert I. Evans and Avrum D. Lapin
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American donors recognize the unique relationship between the United States and Israel, yet changes are quietly taking place in the philanthropic arena that suggest a downturn in support.

Rarely have we seen such stark changes than in our recent study gauging charitable giving to Israel-based organizations. Donations to certain Israel-focused "American Friends" organizations between 2006 and 2009 saw a substantial decline overall, mirroring giving to U.S. organizations. However, the trend also saw higher peaks and lower troughs than the more measured ups and downs in giving in general in the United States during the same time period.

In a previous study we conducted, published in 2008, we found that giving to Israel-focused entities increased 64 percent from 2001 to 2006. To update that study, our team examined the patterns of charitable giving from 2006 to 2009 to 80 American Friends organizations, including groups such as American Society for Yad Vashem, American Friends of Tel Aviv University, American Red Magen David for Israel and American Committee for Shaare Zedek Medical Center.

The study examined four sectors: arts and culture; education; health; and human services, allowing for direct comparison with domestic U.S.-focused entities.

In 2007 and 2008, giving to American Friends outpaced giving to U.S. causes, with larger increases and smaller decreases, respectively.

However, American Friends giving fell substantially in 2009, largely because of decreased giving to higher education. Giving in other sectors recovered somewhat in 2009, as did U.S. giving overall. Aggregately, giving to the American Friends organizations in our sample decreased 16 percent from 2006 to 2009, though giving to those four sectors overall in the United States only decreased by 1.52 percent.

The high increases in giving in 2007 compared with the decreases in subsequent years lead us to believe that the "great recession" was a major catalyst for the decline, although we can't yet account for the "new normal" that has taken hold in its wake. As the United States economy soured, donors decreased their giving and more carefully considered where their gifts would have the most immediate impact. During this period, the Israeli economy was far more stable and performed better than that of the United States, creating a scenario where donors, particularly major donors, may have shifted their giving temporarily -- some even permanently -- to U.S. causes.

Giving to Israel-focused American Friends organizations remains in the hundreds of millions of dollars, reaching $725 million even at its low point in 2009, a substantial source of foreign support that any country's nonprofit sector would envy. The organizations included in our study represent only a portion of total American charitable giving to Israel, which exceeds $1 billion annually.

Still, we wonder if some of the changes in giving to some organizations may become more permanent. Donors have become much more sophisticated and demanding in terms of measuring impact, the efficient application of charitable dollars, accountability and transparency. Institutions and causes that are not prepared to respond to those new demands will probably not bounce back as quickly-- or perhaps at all -- to pre-recession levels.

Due to the tightness of philanthropic dollars and the mindset and psychology surrounding giving today, compounded by the proliferation of new nonprofits, American Friends organizations face an increasingly competitive fundraising environment. Furthermore, today's American donors tend to be more entrepreneurial and do not automatically prioritize Israeli causes.

Whether the shifts that we witnessed are short term or if they will harden into longer term reality is yet to be seen. We can say with full confidence that if Israel-focused American Friends organizations are not mindful of mindset changes -- and continue operating the way they did 15 and 20 years ago -- they risk losing American philanthropic support to other causes that are.

The "new normal" has required U.S.-based causes to innovate their appeals; so, too, must Israel nonprofits re-position themselves to reap continued support from Americans. New strategies will most likely acknowledge the unique relationship of Americans with Israel but nothing can be taken for granted.

Robert Evans and Avrum Lapin are the principals of The EHL Consulting Group, of Willow Grove, a global fundraising and management consulting firm. For a copy of the full report, email: info@ehlconsulting.com.

 

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