Israel's Failure to Pass State Budget Is Endangering Nonprofits

In prolonged standoff over passing the 2020 budget, ministries are putting off government allocations

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Benny Gantz (L) and Benjamin Netanyahu during a visit to a Home Front Command base, September 2020.
Benny Gantz (L) and Benjamin Netanyahu during a visit to a Home Front Command base, September 2020.Credit: Tomer Appelbaum

Weeks after the Knesset approved an extra 11 billion shekels ($3.3 billion) in spending for 2020, money intended for nonprofits has yet to be delivered as the government stalls the passing of a state budget and many organizations may not survive into next year.

Shani Oren, of the Civic Leadership, an umbrella organization that helps nonprofits liaise with the government, attributed the problem to the absence of the 2020 budget.

The government has been in a prolonged standoff over passing the budget, which means that ministries are receiving funds on a month-to-month basis from the treasury accountant general, based on last year’s budget.

“When ministries get their allocations they need to use it to cover their most critical obligations for the month – for salaries, supplies and urgent payments,” he said. “Nonprofits right now are at the bottom of the heap. We’re neither the public sector nor the private sector.”

In fact, the budget allocated this year for supporting nonprofits was only about 70% of what they got in 2019. So when the Knesset Finance Committee voted to approve the 11 billion shekel supplement, a group of lawmakers led by Hila Shay Vazan (Kahol Lavan) won treasury support to top up the figure to 100%.

Even though the Finance Ministry approved the increase in principal, Shay Vazan agreed with Oren that the ministries were not allocating the extra funds. The shortfall comes to about 1 billion shekels.

Asked about the delay, ministry officials denied it was because nonprofits were a low priority; they attributed the problem to the second lockdown in September and October, when the nonprofits in many cases suspended operations. Now that the lockdown is over, the money should start flowing quickly, they said. A treasury official added that it was not usual for allocations to be made as the year draws to a close.

Oren said that similar delays occurred in 2019 but this year, with the coronavirus still weighing on the economy, many non-profits may be forced to shut down.

“In 2019 organizations has donations or income from clients – today that doesn’t exist,” she said. “The ministries have an interest in delaying allocations and putting off their obligations till next year, but a lot of organizations won’t survive to use the money next year.”

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