The resurgence of high-tech exits in Israel has rightfully brought the question of taxation back to center stage. In recent years, more companies have chosen to incorporate in the United States, driven by regulatory and tax considerations. When significant wealth is generated, the state is expected to benefit from its share of funding for security, education, health, and infrastructure. This is a fundamental principle of the social contract. Yet precisely at this juncture, a conceptual error often occurs, blurring the essential distinction among the tools of civic responsibility.
The argument that "it is better to simply pay taxes" is often presented as a definitive moral stance, or conversely, as an assumption that renders any discussion on philanthropy redundant. Simultaneously, there is a perception that a tax-deductible donation makes the state a partner in decision-making, thereby requiring an alignment between public priorities and the donor's will. Both assumptions miss the point. They treat taxes and philanthropy as if they were the same mechanism, whereas, in reality, they are entirely different tools with distinct purposes, paces, and capabilities.
Taxation is a broad, uniform, and central instrument. It is designed to ensure formal equality, functional continuity, and the funding of massive national systems. Its advantage lies in its ability to generate stability; yet, for this very reason, it struggles to react swiftly to changing situations, identify hyper-local needs, or accompany complex, long-term social processes. This is not a systemic failure but rather a structure designed for stability rather than innovation.
Philanthropy, on the other hand, is not a substitute for the state but a complementary mechanism. Its advantage lies not in the scale of its resources but in flexibility, focus, and a willingness to take calculated risks. It enables the development of solutions to problems not yet ripe for public policy, the testing of new models, and the support of processes that do not align with annual budget cycles. Mental rehabilitation, community building, restoring trust, and closing gaps are not "projects" with a clear end date; they are human processes that require persistence, listening, and continuous learning.
The events of October 7 illustrated this sharply. Within days, a massive wave of giving emerged- fast, generous, and at times, chaotic. The urge to help was immediate and understandable, but reality proved that in moments of emergency, a distinction is required: between an initial reaction and the construction of a sustained response. At Keshet, we observed firsthand how donations made in response to urgency later required replanning, adaptation to changing needs, and the realization that community rehabilitation, trauma treatment, and strengthening civil resilience do not end when the headlines fade. The ability to hold resources over time, to separate the moment of decision from the moment of execution, and to act from a systemic rather than a reactive perspective, is what distinguishes good giving from stable impact.
Here, one of the central challenges of our time becomes clear: Wealth is created in a moment, but social impact is built over time. An exit is a point-in-time event; social resilience is a cumulative process. Unplanned giving may produce immediate relief, but it does not always allow organizations to go deep, examine the effectiveness of their actions, or build a stable infrastructure for the long term. True responsibility is measured not only by the amount on the check but by the ability to accompany a process even when results are not immediate.
Therefore, modern philanthropy is not a question of generosity, but of management. Just as business capital is managed carefully, separating decision-making from implementation, social capital requires planning, timing, and discretion. The ability to separate the timing of donations from the distribution of grants is not merely a financial technique; it is a mindset that acknowledges that social needs change and that deep impact is built in stages, not in one-off gestures.
At a time when Israel is facing continuous rehabilitation and budgetary uncertainty, this distinction becomes critical. The question is not who is more responsible, the state or civil society, but how each tool operates in its proper place. When taxes fund systems and philanthropy strengthens processes, when the state ensures continuity, and giving allows for depth, economic success ceases to be just a number in a report and becomes a wisely managed social resource.
Smart philanthropy is not just distribution, but the creation of infrastructure and lasting impact. It requires distinction, planning, and institutional maturity, just as wealth management requires wisdom and responsibility.
The writer is the CEO and Founder of Keshet – The Donor Advised Fund of Israel.
