So how many nonprofits are there in Israel exactly and are they regulated in any way?
According to the register for non-profit organizations (Amutot) in Israel, there are more than 45,000 registered nonprofits, not including trusts, and companies for the benefit of the public which fall under different categories. There are different opinions regarding the number of active organizations varying from 12,000 to 25,000 organizations.
Nonprofits in Israel are active in a very wide variety of fields: education, health, the arts, advocacy, children and youth at risk, legal services, animal rescue, religion, and many, many more.
All nonprofits in Israel, by law, must be registered with the Registrar of Corporations. This office is part of the Ministry of Justice. In addition, nonprofits are now being required by more and more funding sources to have in their possession an annual certification that they are following the requirements for “proper management” (nihul takin). Information regarding the status of individual non-profits is available on the registrar’s website http://www.justice.gov.il/MOJHeb/RashamAmutot/AmutotViewApp.htm, although the information is available only in Hebrew at this time.
Furthermore, nonprofits who wish to apply for government funding have to follow additional regulations; e.g., their overhead expenses are limited to a certain percentage of their overall budget.
As a result of government and donor demand for increased oversight, the Registrar now examines the files of all nonprofits and not just those who have requested certification of proper management. If improprieties are found, the registrar has a number of options including, demanding rehabilitation plans, closing organizations and fining them.
In order for nonprofit organizations in Israel to be recognized as being eligible for tax deductible donations by Israelis, organizations must undergo a rigorous process which includes more than 25 different steps and endless certifications and reports. Organizations need to meet a multitude of requirements in terms of their expenses and income. Once all of the paperwork has been collected, it must pass the scrutiny of the Tax Authority. The final step is approval by the Finance Committee of the Knesset.
According to the Israeli Tax Authorities as of February 2009 there are over 17,000 bodies registered with them as public institutions of which just over 4,000 are eligible for tax deductible donations, not including not including trusts, and companies for the benefit of the public.