In recent years, quite a few Israelis have accrued considerable capital, and many would like to give back to society according to their personal views and priorities. The problem is that the world of NGOs is not well-known or accessible enough to most of us, and also requires time and effort that are not always readily available. As a rule, the newer the capital, the less well-developed the strategic giving culture. However, making an impact is not a matter of age and there is no real reason to wait. An innovative model, which is gaining impressive traction around the world and recently arrived in Israel, creates a smart path to making philanthropic giving a part of life.
Keshet was launched based on the Donor-Advised Fund (DAF) model, which is well-known in North America and Europe. “The idea was to expand Israel’s philanthropic resources and to instill a culture of giving, and not necessarily in the ways in which we are accustomed of thinking,” says Keshet’s CEO, Maya Natan Mozer. “We used to think of giving as something that is done at a certain age, at a certain status and at a certain level of wealth. Today, the world understands that this is just a part of everyday life. These days, people amass capital at an increasingly younger age, and as long as it’s possible, there is no reason to wait in order to contribute to something in which one believes. There is also no reason to wait until one can give very large amounts – a more modest start can lead gradually to a tradition of giving. The model we imported to Israel offers new financial tools for smart strategic giving.”
Keshet is a non-profit public benefit company and has special approval from the Israel Tax Authority for Section 46A donation tax credits. This means that those who open a giving account at Keshet are eligible to receive full tax benefits (35% of the total donation). The chief advantage of this model is the ability to separate between the date the money is transferred from the donor to its actual use as a donation to charitable organizations in Israel. Why is this a good thing? Because our financial behavior is cyclical. If we had a good year, or we suddenly receive a large amount of money as a result of an exit or inheritance, that is the best time to make a donation to a cause we believe in. However, it isn’t always clear in that tax year exactly where we would like our contributions to be directed. The DAF model is flexible and enables us to “take our time”: to give now (and take advantage of the tax benefits) and decide later to which causes we will allocate the funds.
What do you mean by “later”? Donations of up to NIS 100,000 must be distributed within one year. For larger amounts, the fund is for five years, and above NIS 1 million you can keep giving for life. And that is not all: Keshet can invest the donors’ funds if they wish (currently through IBI and Peilim investment houses). In this way, until the money is allocated to the selected NGO, it continues to grow. The yield is added to the amount accrued in each donation account.
Prominent figures from the world of finance serve on Keshet’s investment committee, such as its Chair, Dror Nagel; Dorit Selinger, the former Head of the Capital Market, Insurance and Savings Authority; and Alon Gafner.
Another significant advantage offered by this model is the range of donation possibilities: Keshet accepts various assets, including appreciated stocks, cash, real estate and even works of art.
Philanthropic consulting services
In addition to the donor portal, which offers unique technology developed to manage giving in an easy and accessible manner, Keshet provides holistic philanthropic services whether you are a private donor, a corporation, a group of partners, or even a family fund. Keshet’s due diligence processes allow donors to feel secure about the organizations they plan to give to, and know that their charitable donation will reach the right NGO in a timely manner (incremental operating fees amount to no more than 1% of the managed account). Furthermore, Keshet offers strategic guidance to donors who are new to philanthropic giving, including mapping fields of interest, helping to identify relevant NGOs, and transferring the funds.
Elie Wurtman, one of the first donors to open a giving account, believes that Keshet is a national asset for Israeli society. Wurtman is the founder and managing partner of the PICO venture capital fund, and he deeply believes in educating children to be entrepreneurs in science and technology. “Keshet removes the difficulties from the giving equation and connects entrepreneurs and change agents from all sectors to a growing source of funds, from which they can contribute and make a long-term impact on Israeli society,” he asserts.
Meir Adest, one of the founders of SolarEdge, and his wife Abbi also praise the model: “From the moment we opened an account, our philanthropy became more comfortable. We put resources aside [at Keshet] for contributing to society and now we have time to consult and deliberate, and we can quietly reach decisions about which organizations to donate to. Keshet’s professional team assists and supports us, and the due diligence process is well-organized, so we feel safer donating large amounts.”
It appears that the public was thirsty for this type of model: Keshet was established in 2019 with four donors and NIS 18 million, finished 2020 with 21 donors and NIS 60 million, and as of today has received NIS 180 million from 90 donors. Over 60% of the donors are investors and entrepreneurs and more than 30% are people working in business, real estate, law, finance and the arts. To date, Keshet has made grants of more than NIS 45 million to over 400 registered NGOs in Israel – definitely not a trivial matter, certainly not during a pandemic that severely struck the third sector.
“Keshet’s establishment is an important milestone for Israeli giving, and I believe that it will precipitate an enormous change in Israeli philanthropy,” concludes Adv. Maya Liquornik, Keshet’s Chairperson and one of its founders. “The ability to time your donation and create a giving schedule, combined with the opportunity to donate a variety of assets and choose long-term fund management will bring about a significant jump in the resources available to society and the creation of an active and involved philanthropic community.”
Partnered with Keshet