Democratic societies are composed of three types of organizations, often grouped together into sectors, each driven by a different dynamic: The public sector consists of governmental organizations (national and local), funded by taxes to provide services that could not be supplied privately. The business sector consists of for-profit organizations that produce and market commodities and services. Non-profit organizations (NPOs) or non-governmental organizations (NGOs) - separate from the market economy and independent of the state - form the Third sector linking the public and private domains to families and individuals.

Despite the economic growth and importance of the Third Sector, research and data about it have remained sparse. The crucial need to overcome this lack of knowledge, in order to base policies pertaining to the Third Sector on reliable facts, rather than on ideology or mere impressions, led to the establishment in 1997 of the Israel Center for Third Sector Research at Ben-Gurion University of the Negev.

Investigation of Israel’s Third Sector has entailed not only research about service-delivery organizations but also study of associational patterns relevant to the workings of Israeli democracy and the development of its civic life.



 The Israeli Third Sector

In Israel, the Third Sector performs two primary roles. In its larger role, funded primarily by the state and operating as part of the Welfare State system, Third Sector organizations replace or complement public services in such areas as health, education, immigrant absorption, social welfare and culture.

In its second role, voluntary, civil society organizations provide a framework for individuals to join together to address community needs, pursue their collective interests, participate in building society and effect social change. This aspect of collective life is a major building bloc of Israel’s democratic life.
There are currently over 34,000 registered Third Sector organizations in Israel, about half of which are active. Most of these are “Amutot” (non-profit associations), many of them provide services. However, the number of funding organizations (foundations) and advocacy groups is growing. An average of 1,500 new organizations on the average register annually.

Israel’s Third Sector constitutes roughly 12% of the country’s GDP and employs about a tenth of the nation’s workforce. In the Hopkins Project’s comparisons among 22 countries, Israel ranked fourth (behind Holland, Ireland and Belgium) in the relative size of its Third Sector within the larger economy.
Israel’s Third Sector emphasizes classic welfare services, with 84% of the Sector’s economic activity in the fields of health, education and welfare. Public funding is the Third Sector’s main revenue source (55%), and more than a quarter of Israeli Third Sector organizations received government support in 2001.


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