JFN-Israel is making history.

For the first time ever, Israeli philanthropists – and overseas funders operating in Israel - can open donor-advised funds, enabling them to set aside money for future charitable giving without having to start a private foundation.

Through Keshet — a new nonprofit public benefit corporation we established together earlier this year with our friends at the Institute for Law and Philanthropy at Tel Aviv University, and Committed to Give — Israelis can now access the tax benefits and expert services long enjoyed by the hundreds of thousands of Americans with donor-advised funds. We’re confident this will revolutionize philanthropy in Israel.

Read Maya's article about Keshet in the Times of Israel.

Overseas foundations that allocate money in Israel are also eligible to open donor-advised accounts through Keshet, saving them the expense and hassle of operating an office in Israel. Some the largest Jewish foundations in the United States — including Baltimore’s Harry and Jeanette Weinberg Foundation and the Russell Berrie Foundation in New Jersey — have already opened such accounts

The Keshet model is similar to the American system of donor-advised funds, but, aware of the concern that some American donor-advised funds (DAFs) sit dormant, allocating little of their overall holdings to charitable organizations, we took steps to create a new model in which donor-advised funds are incentivized to allocate their holdings.

Keshet donor-advised funds differ from American donor-advised ones in two ways:

1) American DAFs have no payout requirement, meaning that much of the money in these funds sits idle rather than going to charity, but the Israeli DAFs managed by Keshet have payout requirements that vary depending on the size of the DAF. Accounts of up to 100,000 Israeli NIS (approximately $30,000) must allocate all the money within one year; accounts from 101,000 to 1 million NIS must allocate all the money within five years; accounts of 1,000,001 NIS must pay out at least 5 percent of the total account each year.

2) While some American DAF managers (such as Fidelity) are for-profit, with a revenue model based on maximizing management fees, Keshet is a public benefit corporation whose mission is to promote giving. Keshet’s management fees are intended only to cover administrative costs, and are not meant to be a revenue source. Any profits generated will be donated.

We are confident that Keshet-DAF will grow Israel’s community of philanthropists.

Currently, Israelis donate just 1 percent of their disposable income on average, compared to Americans who donate 2 percent. (See the Committed to Give/Institute for Law and Philanthropy study comparing Israeli giving to Giving USA data.) And while approximately 120,000 Israelis have available assets of at least $1 million, fewer than 1 percent of them donate at least $30,000 annually to nonprofit organizations.

Soon after we started JFN-Israel in 2008, we realized that the two biggest factors discouraging giving in Israel were inadequate tax incentives and the lack of a donor-advised fund infrastructure. Keshet-DAF eliminates these obstacles and will greatly complement JFN-Israel’s work to both foster communications among funders and encourage funders to be more strategic.

We’re so thrilled that Israeli donors can now enjoy the same conveniences afforded by American donors, and are pleased that Keshet has been designed in such a way to encourage more Israelis to invest more money in the social sector.

You can learn more about Keshet-DAF on its website and by watching the videos below.