Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

29 Kislev 5764 - December 24, 2003 | Mordecai Plaut, director Published Weekly









Produced and housed by
Shema Yisrael Torah Network
Shema Yisrael Torah Network











The Salary Scandal at Israeli Non-Government Organizations
by Betzalel Kahn

At the State of Israel's non-government organizations (NGOs) anything goes. From party fundraising for political parties to running building committees and public institutions, they have total freedom of activity. Although there is an NGO Registrar responsible for oversight, he cannot tell an NGO what goals to work towards nor what to do with the funds entering its coffers.

It seems perfectly simple. One goes to the registrar, lists the name of the NGO (amuta) and its objective, pays a nominal fee and then the money starts coming in. The NGO just has to declare its goals (in terms of public affairs, not economic or politic goals) and it is off and running.

An NGO must have seven members, including a chairman and an internal comptroller. Every year a financial report must be submitted, describing the organization's activities. Some NGOs even earn large sums every year but unlike companies, profits are not divided among investors or shareholders but directed toward the goals for which the NGO was set up. In some cases the organization may be eligible for government funding to promote its activities if it meets certain criteria and if the NGO Registrar certifies it is properly managed.

The oversight that exists for public companies and government companies is almost nonexistent in the case of NGOs. Nobody knows exactly where the money goes. Some say the NGOs can be used for money-laundering. Also NGO directors can receive exorbitant salaries, sometimes tens of thousands of shekels per month or more.

Recently the NGO Registrar's report was released. Twenty thousand NGOs are registered in Israel, of which 13,000 are active. Many public organizations such as hospitals and educational institutions operate under NGOs. In order to skirt supervision over the salary of ranking officials, directors of the NGOs receive enormous salaries that could sustain many families.


The State of Israel funds private and public NGOs in the amount of about NIS 4 billion per year. Not all of the funds transferred to the NGOs reach their destination according to the director's declared intentions. There is no disclosure policy to allow government ministries to supervise what takes place at the NGOs.

There is one piece of information the NGO Registrar can find out about and which the directors are even required to report: the salaries of ranking officials, generally at NGOs that receive enormous budgets from the state. For example, according to a report in Ma'ariv that included parts of the Interior Ministry's report on the NGOs, one of the officials of the NGO that operates Shaarei Tzedek Hospital receives a monthly salary of NIS 130,000 ($30,000). The hospital director receives the same amount. In total the top five officials are paid NIS 6.2 million ($1.4 million) per year.

Another NGO where the top officials are living it up with astronomical salaries is Neshei Amit (Amit Women's Organization), which runs a network of religious schools in various parts of the country. Neshei Amit receives NIS 20 million ($9 million) annually in state funding. And where does this money go to? Twelve percent of it goes to pay the salaries of the top five officials, who together receive NIS 2.4 million ($550,000). The network of schools suffers from deficits and from cuts in worker salaries while its top five executives receive an average monthly salary of NIS 40,000 ($9,100) and its highest paid executive receives NIS 62,000 ($14,000) per month.

Likewise the Alyn Orthopedic Hospital for Handicapped Children in Jerusalem grants an a monthly salary of NIS 73,000 ($16,700) to one of its top-ranking administrators.

One of the better-known organizations in the Israeli establishment is the Israeli Institute for Democracy, which preaches the cause of lawful and democratic conduct in government institutions. One would assume the organization's executives would do the job voluntarily. In fact the Institute, which does not receive government funding but as a unique institute does receive tax benefits, pays its president a sum of NIS 118,000 ($27,000) per month.

No chareidi NGOs appear on the list of organizations with enormous top-end salaries. Chareidi organizations set up NGOs for the sake of education and chesed, utilizing every cent received to further these aims. Meanwhile secular and national-religious bodies take full advantage of the funds funneled in to reward their top officials. At some NGOs half of the money they spend goes to the salaries of the top executives.

Welfare NGOs such as Babayit, MATAV and even the disabled IDF veterans' association pay their top-ranking officials monthly salaries of over NIS 45,000 ($10,300). Sports teams also pay high salaries. At an NGO that runs a team in Tel Aviv the highest-paid figure receives NIS 145,000 ($33,000) per month. In total its top five officials receive more than NIS 5 million annually. At another team from Herzliya the highest- paid figure receives NIS 1.4 million per year.

Secular educational institutions are similar. At Beit Berl College, for instance, the top-paid administrator receives NIS 581,000 ($133,000) per year, while the next five best- paid administrators receive a total of NIS 2.37 million ($615,000) per year. A similar institution, the Kibbutzim Seminary, pays as much as NIS 583,000 ($133,000) per year and the top five administrators receive of total of NIS 2.21 million ($505,000). At WIZO the top-paid administrator receives NIS 750,000 monthly and the next five in line are paid a total of NIS 2.64 million ($600,000) annually. NGOs that run cultural institutions, such as the New Israeli Opera, also dole out generous salaries. The Opera, which receives an annual budget of NIS 17 million ($3.9 million), pays as much as NIS 55,000 ($12,600) per month.

National-religious institutions also appear in the report on the list of extremely high salaries. One of the hesder yeshivas pays NIS 450,000 ($103,000) per year to its highest-paid figure and its top five salary recipients earn a total of NIS 2 million ($460,000) annually. At the Emuna Women organization, the top salary comes to NIS 715,000 ($163,000) and the top five executives receive a total of NIS 2.5 million ($570,000).

Voluntary organizations also pay big salaries. The Association for the War Against Cancer pays its director NIS 350,000 ($80,000) annually. AKIM paid its top salaried executive NIS 29,000 ($6,600) per month.


Little can be done to counter these excesses. According to the law the state cannot interfere in these organizations' affairs or determine the salary of the NGOs directors and top executives. This is a legal matter that raises numerous problems. The only avenue that remains is to publicize the names of the executives who earn exorbitant salaries to inform people who donate money to these organizations how their money is being spent.

According to the Registrar's office some NGOs engage in public fundraising in addition to the enormous budgets they receive from the government and pay generous salaries. In 2002 the director of Pitchon Peh, for example, received an annual salary of NIS 250,000 ($57,000). More than half of the donations to the organization go to the salaries of its top five executives.

For the last five years NGOs have only received state funding if they have a "proper management" certificate from the NGO Registrar. But the law does not allow the Registrar to investigate who makes donations and certainly not how much each donator gave.

So far the government has not managed to clamp down on top- ranking salaries although a committee was set up two years ago to investigate the matter and even recommended amending the law that restricts the wages for top NGO figures. Minister Meir Shetreet, who called for a draft of the report that has been prepared but is not yet finished, claims the findings in the inquiry were astounding. At all of the NGOs the salaries of the top three figures were checked and in several cases more than 50 percent of the total budget went toward paying these salaries. "It cannot be that the state budgets funds to NGOs and at some of them the majority goes to their directors' pay," says Shetreet, who notes there are NGOs that do not receive any money from the state but pay high salaries.

On the other hand NGOs enjoy tax exemptions. In an interview with Ma'ariv Minister Shetreet said, "We must create a limit on the salary level of NGO directors. The system has to be changed from the foundations. Especially during these difficult times of painful budget cuts, it is difficult to accept the report's findings on NGO directors who are living at the public's expense."


Yet there are also some who defend the enormous salaries of many directors at various organizations. Take, for example, 120 NGOs in the State of Israel that deal in welfare and aid money for poor families and individuals. The directors of these NGOs do what the government was supposed to do. "You cannot get talented/capable directors at minimum wage," says Sarah Zilberstein, who serves as director-general or the umbrella organization for voluntary associations and the non- profit organizations.

She also says companies set up especially for this purpose charge/collect money from the public for NGOs. These companies receive percentages for collecting donations; an entire industry has emerged that brings in hundreds of millions of shekels annually--all at the expense of the public, which contributes and contributes to these NGOs without always knowing where there money goes. Generally this kind of fundraising is conducted through telemarketing.

Every few days the phone rings with a call from one organization or another asking for contributions. Typically the caller represents a telemarketing company seeking donations for NGOs, which pay for every shekel they bring in.

Although at chareidi NGOs -- typically Torah, chesed or educational institutions -- mega-salaries are rare (and not found in the report at all) and they are constantly facing budget deficits, when they request funds rightfully theirs by law some enemies of religion invariably leap up to gripe about funding to chareidim. Yet when the state budgets NIS 4 billion ($900 million) annually to NGOs (the vast majority of which are not chareidi), and up to half the organization's budget may be spent on exorbitant salaries for its top- ranking figures, not a word is said. Except for a few scant lines in the newspaper about scandalous salaries, nobody pays much attention.

It appears the religious alienation fostered by the media and the Israeli establishment is not about to change--not before important Torah, chesed and educational institutions collapse under their financial burdens, while sports, dubious cultural organizations and theaters will continue to thrive off tremendous funding and sky-high salaries.


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