Two recent articles by Stephen Donshik have crystallized why board members need to stay objective…Even with the best of intentions, losing objectivity weakens the board’s ability to accomplish its primary task of governance.
As was mentioned in my previous post, Israel’s OFFLINE Overhaul of its Nonprofit Sector (Guidestar Conference, Part 1), the June 26th Conference Organized by Guidestar Israel tantalized the attendants with many planned improvements within the government offices tasked with overseeing Isael’s nonprofit sector.
Even more monumental, though, are the changes that are taking place online. Here we are seeing not just an upgrade in software, but in approach and analysis whose rippling effect will be felt far beyond Israel’s shores.
The June 26th Conference Organized by Guidestar Israel — a collaborative project of the Justice Department, Registrar of Corporations, Guidestar International, NP Tech, Joint Distribution Committee (JDC), and Yad Hanadiv (a.k.a. The Rothchild Foundation) — was June’s best prediction for “The Tomorrow of Jewish Philanthropy.”
In the global nonprofit sector there is much talk of cooperation and the need to combine forces to increase efficiency and cut costs, yet this synergy is hard to find. Guidestar Israel, in contrast, is actually doing it. Local charities, international organizations, private funds and government resources have all cooperated to bring the Guidestar Israel project into fruition. (And yes, it took over six years for the parties agree and get things off the ground, but we’ll choose not to focus on that for right now.)
Like many conferences, there was the good and the less good, but for those paid attention, there was also the surprising — announcements foretelling actual progress.
After years of rumors, here-say, and unwritten code that outlawed the use of credit cards by Israeli nonprofit organizations, the newest version of the Nihul Takin [Certificate of Proper Management] from Israel’s Rasham Ha’amutot [Registrar of Charities] clearly permits the use of credit cards by Israeli charities…kind of.
Unfortunately, vague unwritten guidelines have now been replaced by confusing and unrealistic written rules. Progress?
So should your amutah [Israeli Charity] use a credit card? As no two charities are the same, that answer is best left to your organization’s board, accountant, and/or lawyer.
What I can do, however, is share the research I have done and practices I have witnessed from countless nonprofits, which will hopefully save your organization precious time.
The Hebrew word amutah, referring to a charity in Israel, is used both correctly and incorrectly to describe just about any nonprofit organization registered in the country. But wait, it get’s more confusing. Not all charities are charities, sometimes they’re companies. And sometimes a charity isn’t tax-exempt while a company might be.
Confused? Don’t worry. In this post I’ll cover the various terms and statuses available to Israeli charities — along with links to government websites — that will help you find the answer to the bottom-line question burning in your mind: Is this organization worthy of my donation?
Guest Post: Recently, within a matter of months, I opened and then proceeded to close a amutah [Hebrew referring to a registered charity in Israel] here in Israel. I wanted to open up a seminary [religious school] and, with the advisement of experts in the field, decided it would be best for the seminary to run under its own administrative body. Unfortunately, we did not come to this understanding until late into the process of developing the seminary, which meant that we were rushed to register the amutah, file in the tax authorities, and open a bank account. I learned many things in this process that perhaps can help others looking to start their own non-profit organizations.
“What do you mean that Israeli charities can be registered as companies?”
That was the question someone asked me last year that that had me thinking to myself, yet again, that charity legal/tax structure is a language onto itself and should require its own Ulpan.
And so, I shall now endeavor to explain the somewhat contradictory concept of a Chevrah LeTo’elet Hatzibur [Public Benefit Company].
Obtaining government funding seems to be every nonprofit’s goal, at least in Israel. I have heard countless lecturers, founders, and foundation representatives preach the Darwinian virtues of incorporating government grants into an Israeli charity’s fundraising strategy; after all, the nonprofit is servicing the Israeli public. It is to the Government’s benefit – if not its outright duty – to ensure that this charity’s program continues to exist
Not bad on paper. In practice, however, these Israeli government grants can sometimes be more trouble than they are worth.
For the purpose of this post, as a banker I would like to restrict my focus on the budgetary challenges associated with these grants. Specifically, the two disadvantages that arise because grant monies are dispersed only after expenses are incurred.