For Some, It Pays Very Well to Work in Israel’s Non-profit Sector

A survey of the top 90 earners by Guidestar shows many managers earning between 1 million and 1.8 million shekels in 2013.

Olivier Fitoussi

The concept of “non-profit sector,” or the “third sector” in Hebrew, is confusing. Under the law, any company whose mission is defined as benefiting the public is considered part of the third sector – it doesn’t distinguish between non-profits serving the poor, for instance, or those performing services that the government itself is supposed to do like operate hospitals, schools and universities.Under the law, a soccer team is considered a company that benefits the public and so its managers appear in the official list of top salary earners in the third sector, even though the business they run is purely commercial. But so do managers for the kind of organization most people think of when they think of the third sector – Elem, the organization that deals with youth at risk; Akim, which helps the mentally handicapped; or the Israeli Cancer Association.

As a result the list of the 90 top salary earnings in the third sector looks very much like one from the business sector; sometimes compensation looks even more generous than it does in business. That’s what emerges from figures from Guidestar Israel, which collects data on the country’s non-profit sector.

For instance, the executive director of the Avi Chai Foundation, which was set up in 1984 by the American billionaire Zalman Bernstein with the goal to “create and disseminate Jewish culture to the general public,” earned a gross salary last year of 1.16 million shekels ($290,000), according to the foundation’s annual report. Moreover, the director’s salary rises every year; in 2010 it was 100,000 shekels less.

Avi Chai, which quickly became one of the most important addresses for other organizations seeking financial assistance, mainly in education, also paid a generous salary to an unidentified “other director” who received 1.16 million shekels in 2013. Over the previous four years the other director’s salary rose 130,000 shekels.

Two other Avi Chai managers also found their way into the top 90 list – one who grossed 858,000 shekels and another who made 780,000 shekels before taxes.

But Avi Chai’s salaries are exceeded by Yad Hanadiv, a foundation funded entirely by the Rothschild family to finance projects in education. The foundation’s executive director, Ariel Weiss, had a gross salary of 1.37 million shekels, the highest among Israel’s foundations. Weiss’ salary rose 409,000 from 2012 but fell from 1.8 million shekels in 2012.

Yad Hanadiv has several other managers in the top-90 list, among them an assistant director who earned 890,000 shekels in 2013 and another who earned 602,000.

Yad Hanadiv defended its compensation levels by stressing that all its funding was private.

“We are a private family foundation that continues [the tradition] of Rothschild family contributions to Israel for 130 years,” the foundation said in a statement. “The foundation makes its donations and funds it operation costs only through the private resources of the Rothschild family. It doesn’t raise money or rely on public funds or receive any government assistance. The foundation doesn’t ask for nor does it receive any tax benefits.”

That is not the case, though, with Joint Israel, which does get government assistance for its education and social welfare activities. Nevertheless, its director, Arnon Mantver, had a gross salary of about 1.1 million shekels, down 100,000 shekels from 2012. One other director received 1 million shekels in 2013.

The Rashi Foundation, founded by Gustave Leven to fund education and welfare projects for the disadvantaged, paid its director 769,000 shekels in 2013, down from 777,000 the year before.

Compensation at foundations, however, are modest compared to what hospital administrators earn. The highest paid in the sector is Jonathan Halevi, executive director of Jerusalem’s Shaare Zedek Medical Center, who enjoyed a gross salary of 2.28 million shekels in 2013, an increase of 300,000 from the year before. Five other Shaare Zedek administrators were also on the list of 90 top salary earners in the third sector, earning 2.23 million, 1.7 million, 1.6 million and 1.4 million shekels in 2013.

Hospitals connected with health service funds are technically non-profit institutions even though many of the services they provide are run commercially. Assaf Harofeh Medical Center, near Tel Aviv, has two “employees,” as Guidestar calls them, earning 1.4 million shekels before taxes. A third earned 1.06 million in 2013 and two others made the top-90 list.

The foundation connected to Sheba Medical Center paid its best-compensated employee 1.19 million shekels, while the research foundation belonging to Ichilov Hospital paid a top salary of 1.12 million.

Medical centers are operations with thousands of staff and huge budgets, but organizations engaged in social welfare also paid unusually large salaries, according to Guidestar data.

Reuth, which provides rehabilitation services as well as care for the elderly, paid one manager – who was apparently not its executive director – 971,000 shekels in 2013, a figure that was 1.2 million the year before. Babait, which provide home-help services for the elderly, paid its director just 340,000 in 2013, but in each of the two years before he received 850,000.

Nefesh B’Nefesh, which bring new immigrants from the United States and other countries to Israel, paid its director 600,000 shekels in 2013, down by a third from his 2012 salary before taxes.

In education, a small college, the Rehovot-based Peres Academic Center, paid the handsomest salaries – 1.8 million shekels to its president. Uriel Reichman, president of the Herzilya Interdisciplinary Center, earned 1.1 million shekels before taxes while three senior lecturers each received more than 800,000.

Arye Carmon, who heads the Israel Democracy Institute think tank until announcing this month that he was stepping down this year, earned 1.44 million shekels in 2013. His vice president for research, Mordechai Kremnitzer, made 988,000 before taxes and another, top official, Yedidya Stern, earned 602,000.

IDI recent attracted attention after it said it was shutting down its Ha’ayin Hashvi’it (Seventh Eye) online media review as part of a 5 million-shekel reduction in the institute’s overall budget. In response, IDI said, “The institute has lately been undergoing a process of refocusing in which it is cutting several research budgets and in others expanding and strengthening them. As such there will be cuts in salaries and personnel.”