Business for Social Responsibility

June 30, 2009

Maala is the Israel branch of Business for Social Responsibility. Momo Mahadav, the CEO, perhaps in his early 40s, has a warm smile and an intense look piercing through his wireless glasses. His eyes crinkle with each smile or reflection on a new and interesting point. The work of Maala is not directly related to my interests in philanthropy, but an acquaintance from Matan, the United Way equivalent in Israel, suggested that I speak to Momo. In what has become the rule, rather than the exception in Israel, each encounter, whether waiting on the platform for the train, or meeting a new person engaged in some aspect of Israeli community life, leads to the enjoyment of new insights. He indeed had a North Carolina connection, because in his previous position as a leader of an environmental organization in Israel, he had been invited to speak at the American Hebrew Academy in Greensboro.

Because I was not clear what my specific questions for him would be, I responded to the warmth and openness of his introduction to ask about motivations for giving in Israel. I have been curious about what seems to be a compartmentalization of the term tzedakah to use by the Orthodox community, referring not to the larger principles of giving in Jewish culture, but just to the small coins that people give to beggars. Some have told me that they engage in social investment or philanthropy, but not in tzedakah. Momo suggested three motivations. One stems from the sense of solidarity that has characterized Israel from the yishuv into the founding of the state. This belief in a common destiny (even though the likelihood of an agreed upon definition in this disputatious culture is remote) creates a sense of responsibility towards others. We are all in this state-building together. Related to this sense of solidarity is the atmosphere that “we are in the midst of a crisis” all the time, whether it’s a pending election, the results of an election, the immediate threat of a war, or the larger existential threats from Iran and other hostile neighbors. A second motivation flows from the social connectedness of this small country. If everybody does not know everybody else, it is quite likely that they know a friend or a relative of everybody. Indeed, Linda and I have experienced this as we meet people. The president of the largest bank shops at the local market in his or her neighborhood. A shopkeeper in the airport recognizes a CEO racing to a plane and insists that they stop to look at new merchandize in a kiosk. This suggests that giving has a strong personal touch, that it’s not hard to know the faces and the needs of those whose programs one contributes to. With a hearty laugh, Momo referred to the David Brooks column about Israel (April 17), as capturing these dynamics perfectly.

There is an interesting contrast between individual giving in Israel and the U.S. on the one hand and corporate giving in Israel and the U.S. on the other. In the U.S. there are many social and economic motivations for individual giving, including quite favorable tax treatment of contributions, so individual giving in the U.S. is the predominant form of giving (about 75%), dwarfing contributions from foundations (12%), businesses (4%), and bequests (8%) of the over $300 billion in contributions in 2008. In Israel, individual giving, while prevalent, does not make for nearly the same proportion of giving as in the U.S., although the data in Israel are not of reproducible quality. Another impediment to individual giving in Israel is the belief by some that individual wealth is somehow tainted, especially the view that gifts are made to gain influence, not out of altruistic or other philanthropic motives. It is not an uncommon story that Israelis (especially wealthy Israelis involved in international industry and commerce) who live abroad gain an understanding of the individual responsibilities of giving when they are exposed to other Jewish communities. They return to Israel with a commitment to increase their individual philanthropic commitments, the impediments notwithstanding.
The corporate picture contrasts with the individual one. Corporate philanthropy in Israel constitutes a sizable fraction of the donations here, both in terms of shekels and volunteer time. Corporate leaders view their companies as part of the state-building process, so this is another way to contribute through projects like Zionism2000, Matan, or the more general interest in corporate social responsibility as reflected in the success of Maala. While successful in meeting the demands of a global market economy, the fundamental U.S. value of companies as owned by private investors, reflecting the needs and interests of those investors, seems to be less pronounced in Israel. In addition, when the president of Teva Pharmaceuticals or Bank Hapoalim is known by everybody and everybody in Israel, as we know, is ready and willing to offer their personal advice in the shopping mall, the social pressures for coming to practice philanthropy are more intense. It seems to be more than marketing a good name for a company or product; it is being a good citizen.

Maala was started with grants from several foundations in the 1990s, but after five years, the main funder insisted that Maala become self-sustaining. Appropriately, Maala recognized that if its corporate members saw value in the services of Maala, they should be willing to pay for them. Now, 85% of Maala’s budget comes from corporate membership fees. This membership fee has the added benefit of enhancing the value of Maala to its supporters, because in an economic sense they own it. This is not to say that the company “owners” divert Maala from its mission and goals with regard to business responsibility. Instead, they look more frequently to it for consultation and the development of their business social responsibility programs.

Maala’s funding model serves as an introduction to the important question of the role of foreign (mainly North American) funding for Israeli non-profit organizations. There are two major components to this issue. One component involves both the desire and need of Jews from abroad to feel connected to and supportive of Israel. The second component is the more specific model(s) that link financial resource development to the impact of non-profit organizations. These two components or interests may not directly conflict, but they do not exactly coincide either. In short, very many (or probably even too many) Israeli non-profits are dependent on funds from abroad. If the local Israelis do not see value in these organizations, their effectiveness is likely to be limited. It is easy to accept contributions from abroad, without considering the effects that they have on the local legitimacy of these organizations. In the extreme this dependence is patronizing. As Momo suggested, it is hard to make a moral justification for creating and implementing a program in one country (Israel) with funds from another country (U.S.), when the residents of Israel are not supporting that program.