Resolution of Yair Lapid’s “The Real Crisis” of nonprofits in Israel

In the 28.11.2008 issue of “7 Days”, the Saturday supplement of Yediot Aharonot, Yair Lapid wrote about “The Real Crisis”.  It is about the financial crisis facing several nonprofits, which live on donations from well to do people, and which perform various services in behalf of people at need. Eventually, this financial crisis could adversely affect several vulnerable people.

The crisis is due to the drying up of the donations due to the financial/economic crisis happening now. Yair Lapid’s conclusion is that the Government should provide for those services rather than relying upon nonprofits.

I would like to offer another solution to the problem.

At times of economic depression, traditional economic doctrine calls upon governments to pump money into the economy.  Usually this is done by make work projects, infrastructure investments, etc.

I suggest that in addition to the above measures, the Government hand out stimulus money also to the above nonprofits, in proportion to the amount they got from donations in previous years.  Only nonprofits, which meet the criteria for proper management practices, would qualify for this.

My reasoning is that such monetary infusion will help keep employed people with special skills, so eloquently listed by Yair Lapid.  Also, since it can be assumed that people vet on nonprofits before making donations, the Government money will be almost well-spent as the monies of the private donors during previous years.

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