Erosion of Donations

 Crisis in the dollar also effects non-governmental welfare organizations

 Hundreds of non-profit social welfare organizations fear that the continuing erosion of the value of the dollar as well as a reduction of donations from abroad because of the current financial crisis in the United States will force them to dismiss employees and curtail their education, welfare and health services. This affects organizations whose funding comes from abroad who have lost some 20% of their income because of the erosion in the value of the dollar.

 "There has not been a crisis like this since the expansion of the civil social system in the past few years," notes Professor Ben Gidron of Ben Gurion University, director of the Center for Study of the Third Sector. According to his estimate, Israel receives donations of $1.5 billion annually for its non-profits, universities and hospitals. Erosion of 20% translates into a significant loss of more than NIS one billion.

 This can affect thousands of jobs. "Services will be reduced," according to Eliezer Yaari, director of the New Israel Fund which is funded by contributions from the United States for Israel's non-government sector. Shatil, the Fund's executive branch, has already started to curtail its spending, Yaari says. Yad Sarah predicts that it will have to reduce its spending on equipment as well as on vehicles for transport of the disabled because of the loss of millions of shekels.

The reduction in social services is liable to take place at a time when Israelis are in dire need of aid, if a local recession takes place. The reduction of services will be especially significant, since the State has been increasingly dependant on social welfare organizations and donations. According to Yaari, funds that contribute to Israeli non-profits have decided that they can not offer compensation for the erosion of the value of the dollar - for among other reasons they, too, have been hit by the decline in the stock market. "You can not tell a donor that he has to give you another 20% because of the decline in the value of the dollar," says Nachman Shai, senior vice president of UJC and director general of UJC Israel whose donations go to the Jewish Agency and the Joint.

YEDID recently wrote to Prime Minister Ehud Olmert and Treasurer Roni Bar-On requesting emergency aid for organizations supported by dollar contributions - similar to the "security umbrella" of NIS 500 million that has been promised to industry because of the erosion of the dollar.