How Israel profits from the nonprofits

Civil society organizations can influence the public agenda just as much as the media. Some leading figures within the establishment here would prefer that they disappear.

An important organization in Israel turned to the public and the media last week with a call for assistance. “Help us, we have no money”, the group said, explaining that they need financial assistance if they are to continue operating (the sums requested were relatively small). There are a number of other stories about similar important organizations whose influence is no smaller, even if few Israelis are familiar with their work, or even know that they exist.

The group of people making the public appeal for help last week were members of the editorial staff at the Ha’ayin Hashvi’it (The Seventh Eye) website, the long-standing media affairs magazine that used to appear in print but in recent years has only appeared online. It provides a critique of the Israeli media, a daily review of print and television journalism; a look at what the site’s writers see as the reality of the media scene. They disclose distortions and conflicts of interest, and report when newspapers choose not to report on a subject of public interest, or do report on something that serves the interests of a media outlet’s owners but don’t really reflect reality.

Unlike other media outlets in Israel, The Seventh Eye has always operated as part of a nonprofit organization. It had been published through the Israel Democracy Institute, an organization funded through donations – mostly from a wealthy American-Jewish donor, Bernard Marcus, one of the founders of retailer Home Depot. As befits an entity operating out of a democracy institute and which seeks to critique and analyze the Israeli media, the editors and writers at The Seventh Eye have generally been given free rein in recent years, and have written about matters few people were aware of.


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Many are aware of the ties between the Israeli free daily Israel Hayom, founded by casino magnate Sheldon Adelson, and the family of Prime Minister Benjamin Netanyahu. Until recently, though, few were familiar with the interests of the Mozes family of the Yedioth Ahronoth media group. The Seventh Eye deserves credit for disclosing them, day after day, through its painstaking work. Since media outlets have a set of mutual interests and a prevailing balance of power, the small group of writers at The Seventh Eye have been the ones to disclose how the media machine works. Now, however, the Israel Democracy Institute has decided to cease its funding for Seventh Eye, and it’s not certain that only budgetary considerations were involved.

In Israel, as in any other democratic country, the constellation of powers controlling the purse strings are limited in number. And all of them – the politicians, the civil servants and the regulatory agencies, the judicial system and the business sector, in which the influence of the financial firms looms large – have their own interests. And finally, there is the media: newspapers, television news companies, independent websites and even social media.

In recent years, and particularly since the 2011 social justice protests, nearly every Israeli has come to appreciate the importance of the press. Without it, politicians would be constrained by forces that include coalition agreements, party institutions and the desire to avoid angering the electorate. And the business sector needs the support of the media – or at least the absence of opposition from the press – if it is to operate. It is the media that dictates the room for maneuver that politicians and businesspeople have. The media also decides what is acceptable and what isn’t, even if it was acceptable in the past.

We’ve seen this innumerable times over the past three years. At one point, bankers had no problem sitting behind closed doors with business tycoons and writing off massive debt, without losing control of their banks. But since Bank Leumi’s attempt in 2013 to write off the debt of Nochi Dankner, the controlling shareholder at the time of the IDB group, it’s just not done anymore.

At one time, institutional investors didn’t have to think twice before agreeing to forgo a portion of a bond debt repayment. Now, though, they are almost obliged to go to court to wrest control of the company from the debtor. At one time, regulatory agency officials could cut a deal with politicians and business tycoons, but now such acts get major public scrutiny.

And then there was this recent example. At one time, there was nothing preventing a former high-ranking official from working as a lobbyist for a bank or business. But last week, following media coverage, former President Shimon Peres backtracked from working to further the interests of Bank Hapoalim, and now such a move will no longer be so easy.

The public frequently learns about ties between government officials and the business community via the media, but the media doesn’t always work efficiently. The press has its own interests and limitations, and the system by which information is transmitted to the public is broken and distorted. There are newspapers that are directly controlled by business tycoons and reflect their views. And there are firms – the companies that produce television news, for example – where ratings are king and they prefer to cover triflings that easily attract viewers, rather than stories that require a bit more of the viewers’ concentration.

There are media outlets that seek to amass power themselves with regard to the political and business establishments – power that they later convert into cash in a variety of ways, not all of which are elegant. The press is generally economically weak and dependent on others for its survival. As a result, the press alone cannot disclose everything the public needs to know and cannot pressure the democratic system to change what needs to be fixed.

The role of civil society

Civil society, in the form of nonprofits, is there to fill this vacuum, complementing the work of the press in covering the establishment and the status quo that serves the few, the powerful and the well-connected. The Seventh Eye has been reporting information that the mainstream press can’t. A group such as Israel is Dear to Us (“Yisrael Yekara Lanu”), which is involved in efforts to lower the cost of living, can disseminate its demands to the media as well as to government officials regarding monopolies, food prices, housing market distortions and instances in which the financial sector is hurting members of the public. The Movement for Quality Government raises instances in which the political and regulatory system is not functioning properly. The group had a key role in transforming understandings regarding the need to reduce the concentration of economic power in the country into legislation.

And these groups are not alone. There are a number of other players, including a group of Knesset members, mostly from the opposition – for example, Meretz leader Zehava Galon – working as nonprofits do and mounting a challenge to the ties between government and the business sector.

There are those, even within the press, who have decided that these players are marginal. There are those who would say the establishment simply ignores them and that the public is actually unaware they exist. That would be a big mistake, however. As in other democracies, nonprofits and nonprofit think tanks are a central pillar of Israeli democracy, and their influence on politicians and regulatory agencies is great, sometimes influencing policy changes no less than the media.

Business tycoons will say they support the nonprofit sector, contributing 15 billion shekels ($3.8 billion) a year to Israeli nonprofit organizations. About 90 percent of such funding apparently comes from contributors abroad, although Israeli corporate and individual donors contribute substantial amounts, too. Israeli banks, for example, can present a list of the beneficiaries of their support. But that’s just part of the picture, and not the interesting part.

After they came to understand the power of civil society groups, businesses with the control and the money sought to tame some of the groups – through the use of money, of course. They began funding nonprofits, but generally only those engaged in direct service to members of the public: hospitals, children in distress and education, for example. They donate to human needs – which is undoubtedly of importance – but not to organizations dedicated to changing the system and status quo. They would prefer to see that second group of nonprofits disappear.

That’s why entities such as Israel is Dear to Us, the Movement for Quality Government and The Seventh Eye have such trouble recruiting donors, even though they generally operate on a shoestring. These three groups put together could function on the equivalent of the salary of one bank CEO. But organizations that are antiestablishment by definition will have trouble raising funds from the establishment itself. On the other hand, the vast majority of major funding in Israel is close to, or connected to, the establishment. And that’s why an organization such as The Seventh Eye is trying to raise funding from the masses.

The fact is that as soon as The Seventh Eye began to criticize Yedioth Ahronoth, the Israel Democracy Institute decided that budgetary constraints required the end of its funding for the website. The Movement for Quality Government almost collapsed once it joined the fight against the tycoons and concentration of economic power in Israel, losing several major donors. And Israel is Dear to Us is one of the most hated by the major monopolies.

In the past, it was relatively easy for the establishment to tame antiestablishment organizations – buying them off with donations, for example, crippling them financially or delegitimizing them. Since the 2011 social justice protests, however, civil society organizations have been able to exert major influence on government, business and the public as a whole, and complement the work of the media. Now, however, they are coming under attack as attempts are made by powerful interests to tame them and rein them in. That must not happen.

(Source: Ha’aretz)