Background
The COVID-19 crisis has led to a unique partnership between the Israeli government and leading social NGOs in Israel, and to the establishment of an NIS 53 million emergency grant foundation. The foundation was designed to help various social NGOs that are not entitled to government assistance through the main support instrument provided by the government “Grant for Businesses for Support during the COVID-19 Crisis” (third installment). This initiative was implemented in professional partnership with JDC-Elka (hereafter, Elka).
The funds were allocated in two phases. In the first, 536 NGOs submitted a request; 236 were found eligible and received the grant. Due to the low response rates, the Myers-JDC-Brookdale Institute surveyed NGOs that did not submit a grant request, to find out why.
After drawing lessons from the first phase and modifying the eligibility requirements, a second phase was launched. In this phase as well, the extent of requests was lower than expected: 420 NGOs requested a grant, and 185 were found eligible. At this point, Elka contacted the research team at the Myers-JDC-Brookdale Institute to reexamine possible reasons.
Objective
The study was designed to examine the patterns whereby Israeli social NGOs turn to sources of support following the COVID-19 crisis, and in particular, the underutilization of the Government-Philanthropy Fund.
Method
The study was conducted among 5,684 NGOs active in the Israeli social sphere. The design combined quantitative and qualitative methods. The research instruments were:
- Preliminary in-depth interviews for constructing the survey. Interviews were held with the Elka project representative and with three NGO directors to understand the decision-making process in seeking financial assistance.
- Online survey, designed to chart a broad overview of the patterns whereby Israeli NGOs turn for help following COVID-19. The patterns included: request for donations; seeking government grants (Tax Authority grant, employer grant, and a grant from the Government-Philanthropy Fund); and seeking loans. The survey was completed by 376 NGOs, a representative sample of the research population after weighing the sample according to the NGOs’ annual turnovers.
- In-depth interviews with five NGO directors in order to gain a better grasp of the decision-making process in seeking assistance from various sources, and a better refined understanding of the reasons found in the survey for the low rate of seeking help from the Government-Philanthropy Fund.
Findings
- 81% of social NGOs reported requiring additional financial assistance due to loss of revenue and increased expenses.
- The increased expenses were due to social problems exacerbated due to COVID-19, leading to increased consumption of services provided by the NGOs; investment of resources in adjusting the NGOs procedures and activities to the post-COVID reality; intensified activities to provide for the increased needs of service recipients.
- The NGOs turned to several sources of assistance: 70% sought donations, 48% sought grants, and only 16% sought loans. A third (35%) of the NGOs that sought donations turned to three sources or more.
- The relatively low rate of grant seeking was due to lack of awareness of the grants offered; failure to meet the eligibility requirements; the complexity of the submission process and effort required; and the need for professional help in submitting the requests.
- Only 27% of NGOs applied to the Government-Philanthropy Fund for help. Of those that did not, 46% had not heard about the grant and 41% assumed they would not meet the eligibility requirements. The two main requirements the NGOs did not meet, were (1) significant loss of income (25% or more) due to the crisis – 44% of NGOs did not experience such a significant loss; and (2) ineligibility to a grant from the Tax Authority – 42% of NGOs were eligible.
Recommendations
Given that the State of Israel relies on the third sector in providing multiple social services, and in view of the fact that many NGOs have been affected by the COVID-19 crisis, there is great importance in providing government support for NGOs through grants, and avoiding reliance on donations. Accordingly, we recommend the following:
- Streamline the granting mechanism by simplifying the request submission process and making it more accessible: The management and supervision of the mechanism should be entrusted with an organization specializing in the third sector, such as Elka, the Jewish Agency for Israel or Civic Leadership. We also recommend creating a simple and efficient system for distributing the grants in real time; offering a streamlined procedure to NGOs that have met appropriate standards of conduct over time; providing assistance in preparing the required documentation; and simplifying the process of substantiating the need for financial assistance.
- Set criteria adapted to the third sector that reflect the types of damages caused to NGOs, including their need to intensify service provision, increase expenses and avoid furloughing employees, as well as criteria based on NGO characteristics: size, area of activity and target population (such as NGOs working with high-risk populations). In addition, offer universal grants such as grants that will enable them to continue operating in periods of low ongoing revenues; grants to help reorganize during an emergency (such as purchasing technologies); and grants to retain employees, the main asset of the third sector.
- Strengthen government relations with the third sector. Despite the fact that the government maintains contacts with the third sector, they appear to be ineffective, leading the government to design grants unsuitable to its mode of operation, to the extent of the damage it has sustained, and to the problems with disseminating the information about grants to begin with. Emphasis should therefore be placed on strengthening the relationship between the sectors based on continuous dialogue and not only in emergencies and on deepening mutual acquaintance, to act in accordance with the third sector’s characteristics and unique needs, for the benefit of Israeli society. It is also essential to communicate with all stakeholders using several mechanisms. For example, by strengthening and fine-tuning the emergency collaboration between the public and third sector; by improving the government’s ability to contact NGOs, including such that do not maintain regular communication with it; by piloting the grant allocation upon preparing for a future allocation, to see how the process is received in the field, whether the terms are relevant, whether the conceptualization is appropriate, and whether accessibility is adequate; and by starting a dedicated crisis fund, modeled after the Fire Damage Fund to be immediately activated in an emergency.
For MJB’s publications on the COVID-19 pandemic in English, press here.
For MJB’s publications on the COVID-19 pandemic in Hebrew, press here.