Poverty in Israel: The divide deepens between the haves and have-nots

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In a shimmering luxury hotel overlooking the Mediterranean Sea, Israel’s banking and financial elite mingled over cocktails recently with foreign investors as they watched Donald Trump on a live telecast praise the strength of the Israeli market.

Across the street from the David InterContinental, meanwhile, more than 1,000 people protested the country’s premier business conference, chanting “welfare before wealth.”

Welcome to 21st century Israel in microcosm.

Once idealized as a socialist paradise, the Jewish state is increasingly becoming a country of two classes — those who have soared in the increasingly capitalist economy and those who have stumbled in its wake.

Despite its much-mythologized egalitarian image, Israel has always experienced economic gaps. But now the divide between haves and have-nots has grown to alarming proportions. If economic policies and other factors have spawned a privileged class, they also have produced a deeply entrenched underclass populated by the elderly, Holocaust survivors, Arabs, immigrants, ultra-Orthodox Jews, single parents — even two-income families.

One of the many faces representing this underclass is R, a poverty-stricken, 43-year-old mother of four.

At a Tel Aviv-area hospital, she weeps in the corridor as her children are being treated.

“Things are very hard for people like us; there is no life, no holidays, no Shabbat,” said R, who lives in the Tel Aviv suburb of Holon, about five miles from the hotel hosting the business conference.

Like others interviewed for this series, R was so ashamed of her plight that she asked that her real name not be used. Her apartment was repossessed recently by the bank, and now she faces eviction from another one because she cannot pay the rent.

R stopped working full time as a government clerk when two of her children became chronically ill. She and her family now live mostly off her husband’s monthly salary of $760 as a moving company employee. Government child allowances and her occasional work cleaning the staircases of apartment buildings bring the family’s monthly income up to about $1,010, officially putting the family among Israel’s 20 percent of households living below the poverty line.

Poverty rates in Israel reached a new peak in 2005, although they leveled off in 2006, according to statistics by the National Insurance Institute, the Israeli equivalent of the U.S. Social Security Administration. According to institute findings, one of every four Israelis — 1.6 million people — lives below the poverty line.

Thirty-five percent of children are living in poverty, leaving Israel with this unhappy distinction: It ranks among Western countries with the greatest percentage of poor children, according to the Insurance Institute.

“Children who grow up in poverty are more than likely to live in poverty as adults,” said John Gal, an economist at Hebrew University. “They won’t have the capacity, human capital and capabilities to be able to get out of poverty, to be mobile in society.”

Chana Eliyahu, 35, grew up in a family living in poverty, and now as an unemployed single mother of a 2-year-old girl, she has become part of that cycle.

She lives off of $640 a month in welfare and child subsidy payments and has trouble finding full-time work because she suffers from anxiety attacks.

Eliyahu lives on the second floor of an apartment building in one of Tel Aviv’s roughest neighborhoods, one populated by drug dealers and prostitutes. To reach her small apartment, one has to pass brothels and climb a staircase reeking of urine and rotting garbage.

Her daughter, Hila, is her inspiration to find a better life outside the walls of an apartment where she fights off rats and cockroaches and tries to ignore the peeling paint.

“My dream for her is to live in a normal place,” said Eliyahu after collecting a week’s supply of dry goods and diapers from Food for the Disadvantaged, a relief group. “She’ll go to a school where there are no drugs or violence and will go to extracurricular activities. We’ll do her homework together. She’s so smart.”

The Rich Get Richer

Meanwhile, about a mile away from Eliyahu’s apartment at the Israel Business Conference, Israeli Prime Minister Ehud Olmert boasts that the nation’s economy is in top form.

As evidence that at least one sector is thriving, consider that the number of Israeli millionaires per capita is twice the world average, according to the 2005 World Wealth Report. Approximately 7,400 Israelis are worth at least $1 million, the report said, including 84 who have at least $30 million.

The total liquid assets of Israel’s upper echelon grew by 25 percent to $30 billion between 2004 and 2005, according to the report. Those designated by the report as the nine richest Israelis made their fortunes in everything from diamonds to real estate to communications to entertainment.

During his December speech at the David InterContinental, however, Olmert also acknowledged the roughly one-third of Israeli children living in poverty and announced $143 million in government funding for a new program that aims to help children at risk.

Although the general standard of living in Israel has risen in recent years, the lower socioeconomic classes have seen their situation plummet, largely due to massive cuts in government social spending that began in 2002. The budget cuts reflect an ideological and policy trend that is reordering the country’s class structure, according to Uri Ram, a sociologist at Ben-Gurion University of the Negev, and the author of the upcoming book, “The Globalization of Israel: McWorld in Tel Aviv, Jihad in Jerusalem.”

Even the Labor Party, which typically is associated with generous social welfare spending, said Ram, has gone back on its founding values to become a part “of this process of transforming Israel from a welfare society into this kind of free-market, corporate-dominated society.”

French immigrant Gilles Darmon saw immediate evidence of that socioeconomic transformation when he arrived in Israel in 1994, and it shocked him.

What we need: Philanthropreneurship

When American Jewish leaders hear I’m consulting in Canada, they often comment that Canadian Jewry is years behind American Jewry.
After several years of intensively
working with the Toronto Jewish community, I’m not so sure. In fact, I see them as being ahead of us.

Since 2001 I have been intimately involved with UJA-Federation of Toronto as the marketing partner in an infrastructure campaign that is raising nearly $300 million over a seven-year period. The federation has raised more than half the amount while doubling what it raises in its annual campaign during the same period.

As Toronto Jews re-envision their community, they’re rebuilding it in three geographical areas of what is referred to as the Greater Toronto Area: the vibrant, gentrified downtown area, in the north of the city where the major Jewish population is; and in the far northern region where young Jewish couples are moving.

Throughout this project the federation is partnering with community institutions, acting not in a traditional allocations capacity but as the actual fund-raising arm — identifying mega-donors, cultivating them and ultimately making the request.

They’re acting as collaborative partners in an imaginative planning process as well. They’re building and rebuilding JCCs at state-of-the-art levels with floors of stores — the Birthright Israel store, the Mount Sinai hospital storefront, the Second Cup coffee chain and possibly commercial establishments such as the Gap and others.

In the same spirit, they’re also building and rebuilding day schools, Hillels, museums, theaters, a Holocaust center, the federation building, open spaces and celebration centers. They’re bringing in the best architects, space planners, program professionals, educators and thinkers — creative and Jewish minds.

The Vaughan campus, now called the Joseph and Wolf Lebovic Campus for the brothers who made a $25 million naming gift, is described by the architect as having been designed in the spirit of the great Jewish area of Vilna and as an integral part of the community where the city streets traverse the center, filled with inspirational and spiritual design, plazas, nature and public spaces.

Through the physical building and rebuilding of their community, Toronto Jews in essence are building and rebuilding the community’s soul, setting a model for Jewish communities throughout the world.

We have a lot to learn from our Canadian brothers and sisters, particularly those of us living in Los Angeles. It’s time Toronto’s tale was told.

Spending a week per month there, I’m learning that to American eyes, Canada can be very deceptive. It looks and smells like America, but scratch the surface and our northern neighbor is a million miles away. It’s a very different place and culture.

How Canadian Jews see themselves as Canadians is very different than how we American Jews see ourselves as Americans. Active American Jews are in a constant struggle between two very rich senses of identity — our national identity as Americans and our communal, religious and Zionist identity as Jews.

Active Canadian Jews, I have observed, live with a completely different dynamic. They’re proud of their Canadian citizenship, but don’t have a deep sense of Canadian national identity. Their national identity is ebulliently Jewish, belonging to the Jewish nation. Their Jewish communal work leads them on a much different path.

It’s only partly against this backdrop that UJA-Federation of Toronto is pulling off what no American federation is.

Two other critical parts have laid the groundwork for this campaign, which I believe are the more influential factors.

First, unlike America’s highly mobile society, Toronto’s Jewish leaders are deeply committed to maintaining family continuity in the same city. They want their children and grandchildren to remain Jewish and in Toronto. How to do it is a constant discussion that arises in many meetings.

As a result, these leaders recognize that they must build a community of the future, creating the type of institutions that will be seen as mainstream and world-class, inspiring the imagination, enthusiasm and pride of a new generation of Jews who are sophisticated and worldly.

The second, and by far more important, factor is their leadership.

They realize that in order to achieve their dreams, they cannot just maintain a community but must work to envision one — in a big way. This has led these leaders to create big ideas and take huge risks to claim an unprecedented return. As they often say, the alternative is to shrivel and lose.

As a marketer I’ve seen that vision, big ideas and risk are everything when leading a community organization such as a federation.

From the start of this project, the executive director of the Toronto federation, Ted Sokolsky, risked professional safety, going out on a limb to articulate a bold vision, create big ideas and inspire allies among professional and laypeople, and ultimately to motivate Toronto’s wealthy Jews — those both deeply and peripherally involved in the federation — to donate generously of their own funds, ranging from $5 million to $25 million.

That’s what demographer Gary Tobin describes when he talks about how federations need to move from the annual campaign business into the philanthropy business. Watching the success of Toronto, I would call this “philanthropreneurship.”

Philanthropreneurship means identifying needs, setting a bold, risky vision, then creating big ideas to be funded in order to carry out the vision.

In philanthropreneurship, the funders are viewed as investors and treated like partners. The return has to be quantifiable.

Federations needs philanthropreneurship, and Toronto is a prime example. So are the initial foundations that created the vision and funded the ideas of Birthright Israel.

The Bill and Melinda Gates Foundation is a model of philanthropreneurship. So is Warren Buffet. Hopefully, so will be the foundation of Sheldon Adelson.

What has been the trajectory of philanthropreneurship in Toronto?
In the past 20 years, Toronto grew from a Jewish community of 80,000 to nearly 200,000 due to an influx of English-speaking Jews leaving Francophone Quebec, and immigration from the former Soviet Union, South Africa, Israel and English-speaking countries around the world.

Toronto also has attracted families from across Canada who are seeking a Jewish community of size, breadth, depth and multiple alternatives.

Memo to Oscar: Just Say ‘No’ to Swag


The contrast was just too much. On one channel, I watched as tens of thousands of people struggled to survive the devastating impact of the tsunami that left more than 250,000 dead and countless others injured and homeless, and on another channel, presenters at last month’s Golden Globe Awards leaving the ceremonies with their “travel-themed” gift baskets worth $37,890 each.

The Golden Globes took place exactly three weeks after the tsunami struck Southeast Asia, creating the largest natural disaster in our lifetime. The gifts, which were contained in a custom wicker ottoman, included:

• An Australian wine adventure package with first-class Qantas airfare and accommodations at Rosemount Estate, where guests will create their own wine (value $16,000).

• A sitting with portrait photographer Judy Host ($5,000).

• Ehrlooms diamond pendant ($2,700).

• Sports Club L.A. six-month bicoastal membership ($2,250)

• Brite Smile teeth whitening ($1,100).

• Missoni shawl ($900).

• Chopard watch ($865)

• Janet Lee luxury pet carrier ($400).

This tradition continued at this year’s Grammys, where each presenter and performer received a $35,000 basket.

Gift baskets have become a cottage industry. They are a part of every major Hollywood event. I have never understood this concept. These people are already blessed with so much. They are pampered and catered to at every turn. Why do they need these extravagant presents? Why do people who need it the least receive the most?

The companies that donate the goodies for the baskets do so because they see it as a great advertisement and endorsement for their products.

Where will it stop?

In 2002, the Academy Awards baskets were worth $20,000 — each. In 2004, they were estimated at $100,000 each and contained more than 50 items, including a seven-day cruise to the Mediterranean or Caribbean and a 43-inch, high-definition Samsung TV, coupled with one year of Voom HD satellite service. The baskets were given to approximately 100 presenters, performers and other select individuals.

The perks actually begin as soon as the Oscar nominations are announced. For example, Estee Lauder gave each of this year’s 20 nominees in the acting categories a Michael Kors leather bag filled with such goodies as: Manolo Blahnik sandals, a personalized Loro Piana cashmere blanket, Baccarat crystal and La Grande Dame Veuve Clicquot champagne. They were also invited to a private spa in the penthouse of the Regent Beverly Wilshire (value $15,000).

Victoria’s Secret gifted the five best-actress nominees with a pair of black lace panties that have a little something extra — a removable 7.2-carat diamond and pink sapphire brooch. The lingerie comes in a pink leather clutch, with another sapphire-and-diamond piece, a detachable four-leaf clover ($15,000).

The full contents of this year’s Academy Awards basket is being kept under wraps until this Sunday’s show. However, a few gifts have been revealed: a red leather case filled with Shu Uemura cosmetics, including mink eyelashes; and Kay Unger cashmere pajamas. It’s amazing to realize that just one basket could probably pay for a child’s four-year college education.

I would love to see one of the award shows step forward and set a precedent by discontinuing the gift basket extravaganza and instead, have the various companies honor the presenters by making monetary donations to their favorite charitable causes.

Because of the magnitude of the tsunami disaster, it would have been most appropriate to not distribute any baskets at the Golden Globes, Grammys or Oscars this year. However, because these groups decided to proceed, it would have great meaning if each recipient would make a matching monetary donation equivalent to the value of their basket to tsunami relief or another charity of their choice.

Another option would be for them to sign the basket, and then put it up for online auction, with the proceeds going to tsunami relief or another favorite charity. It would be wonderful to see these ideas become an ongoing tradition at all award shows, whenever gift baskets are distributed. (Kudos to the presenters at the Critics’ Choice Awards for auctioning their baskets to aid tsunami charities.)

Celebrities have tremendous influence in our culture. Turning gift baskets into charitable contributions is an opportunity to be a role model and teach everyone, especially our children, about gratitude and the importance of helping others.

One organization is already a shining example of these lessons: Clothes Off Our Back. which was conceived by a group of actors, including “Malcolm in the Middle” star Jane Kaczmarek; her husband, Bradley Whitford of “The West Wing”; and his co-star, Janel Moloney. The project encourages celebrities to donate the gowns, tuxedos and accessories that they wear at award shows to an online auction (www.clothesoffourback.org). They have given $350,000 to various children’s charities in the past three years.

They raised $130,000 following the Golden Globes in support of the UNICEF Tsunami Fund. The highest bid was $31,000 for “Desperate Housewives” star Teri Hatcher’s gown. Their Grammy auction, which is taking place online until March 1, includes dresses donated by such celebrities as Beyonce.

They will continue their fundraising efforts with the Oscars. Kaczmarek described the group’s purpose so eloquently: “The idea behind the auction is all about what you can do to give back.”

It is a sentiment all of us can take to heart, especially at this time. As Maurice Sendak once said, “There must be more to life than having everything.”

Gloria Baran develops social action and community service programs for children, including a variety of tzedakah projects for Camp Ramah.