Despite our impressive ‘Start-Up Nation,’ across the rest of Israel net incomes are disproportionately low in comparison to the cost of living. Today, some 460,000 families—roughly 20% of the population—lives under the poverty line, many of them working families All this is part of reason why Israel still consistently figures at the bottom of the OECD’s list of income inequality.
In this economy, a small business can offer those at the lower end of the socioeconomic ladder a critical platform to achieve financial independence: Given the right guidance, there is no limit to what an aspiring business owner can achieve. In this regard, small business development represents—for the 92% of Israelis who have been left behind by Israel’s ‘High-Tech miracle’—the clearest and most viable path to financial independence.
On the macro level these businesses infuse the economy with growth—because they transform some of the lowest wage earners in the market into spenders, increase discretionary income, and reduce the strain on the social welfare system. Do this enough times, and it amounts to some impressive numbers. Every 60,000 ILS a small businesses makes each year (5,000 ILS per month being our minimum criteria for ‘basic business viability’) ends up saving an additional 60,000 in social welfare spending. Every 1,000 we assist represent an annual infusion of 120 M ILS to the economy.
But it is the social ROI that is perhaps most important. Small businesses empower families and communities. Increased prosperity transforms the environments—and opportunities—in which children grow up. In addition to increased spending in local communities, small business also inspire by example. It is for this reason that the Ministry for the Development of the Periphery has recognized us as a strategic partner for 3 years now.
Our experience with countless individuals and families from this demographic has convinced us that this is a sector of the population who have simply not been afforded– as a result of geography, background and/or minority status—the same opportunities as their better-off counterparts. Many have the ambition and the will to escape the cycle of poverty. We can bring them together. All they need are the tools.
By providing full-service, free business development assistance to low-wage families across the country’s social and geographic periphery, we can bring more and more women and families from the lowest economic strata to reach financial independence. We believe that entrepreneurship is a bridge that can transcend the social and political divide to reach the thousands of Israeli families—Jewish and Arab, secular and ultra-Orthodox, new immigrant and veteran—who share this need. As far as we’re concerned, they are Israel’s real Start-Up nation: a substantial—and highly strategic—segment of the population who could be transformed into a significant lever for the economy. For us, this is the real Tikkun Olam.
Through our project with Matanel, we were able to bring 64 Jewish and Arab women together to grow micro-businesses of their own. Today, 65% of those businesses have reached basic viability (a minimum monthly income of 5,000 ILS). (Compare this to the average rate of small business closures each year: an estimated 8 out of every 10.) Our participants have also reported that the encounter with women from the other side changed their lives. These women are just a few of the 3,357 we have assisted since we started —and in the process, bringing thousands of women from different communities together. (This past year, we finally broke the ‘1,000 business barrier,’ with 1,006 businesses launched.) We estimate that these 3,357 will represent a total infusion of the equivalent of 402.8 M ILS in 2020 alone—not to mention the thousands of lives of children and communities that have been transformed as a result.
Central to that success has been our partnerships. Yozmot Atid works with over 200 organizations and agencies across the country, from local welfare departments across Israel to the dozens of NGOs who refer candidates to us. This group also includes the financial institutions (notably Bank Leumi, Bank HaPoalim and Tarya, an online crowd-funded micro-loan platform) who enable us to provide low-interest, guarantor-free loans to the entrepreneurs we work with to help them finance costly start-up expenses; as well as the scores of leading companies and institutions (from Coca Cola to Ernst & Young) who regularly refer business professionals to us as volunteers. Of these, we work most closely with the Ministry for the Development of the Periphery with whom we embarked on a ‘joint initiative’ in 2017. As a result of these, Yozmot Atid is able to work in some 60 localities around the country. (In 2019 alone, we opened 37 business courses in 17 localities around the country.)
As an organization that can draw from an extensive store of best practices from the business world (not least because of our founder) we aim to bring the most effective business practices to our operations—ones that will enable us to improve the cost-effectiveness of our programming so that we can successfully scale our activities. Today, our small staff operates programs around the country in all sectors of the society—reaching hundreds of entrepreneurs a year. We would not have been able to do this without our dedicated team—or the 400 (and growing) business professionals from around the country who give of their time and expertise to mentor aspiring entrepreneurs whom we refer to them. (In 2019 alone we added 139 new professional volunteers to our corps.) All this brings us closer to our dream of further scaling our program across Israel—and replicating our model abroad.
In 2019, Yozmot Atid was awarded the JDC-Zussman Prize for most outstanding NGO in the category of ‘Improving the Quality of Life for People in Economic Distress’ and the prestigious “Tav Midot” award.
Our success in bringing substantial numbers of low-income earners in Israel to business viability and financial independence through programming that brings different populations together has brought with it a number of concomitant questions: How can Yozmot Atid allow for ongoing replication of its program in Israel? Can its service package be adapted to other countries—specifically developing countries? Over the coming years, we plan to take the methodology that have developed and extend it further—both across Israel and the global community.
1) Replicating the Model throughout Israel:
Together with local partners, Yozmot Atid will begin developing modular components of its program to be taken up by a wide variety of local partners—from municipalities to women’s organizations and other community-based NGOs.
2) Extending the Model to the Developing World…
Over the course of 2018, Yozmot Atid began to share its work model with local partners in Nepal and in Tanzania, conducting two pilot projects—one, for 40 women in cooperation with Israeli-Nepalese NGO Tevel-Nyayik Sansar, the second for a full cohort of 50 in cooperation with H.O.P.E Tanzania. Each pilot included a mapping/recruitment, business training, and micro-lending. Overall, both pilot projects have proven successful with nearly all participants having succeeded in substantially increasing their monthly net-incomes, with participants reporting they acquired meaningful new business management skills. Our partners in both countries are eager to continue working with us to reach additional cohorts of women while expanding the support package to program graduates. Over 2020-21, we plan to scale up our international activity by expanding our programs in Nepal and Tanzania—with preliminary checks now underway into a pilot in Zambia—as we continue to adapt our model to the needs of developing DAC economies.
3) … As Well as to Developed Countries with Substantial Inequality Ratios:
All this, as new opportunities are emerging. Following a visit by Nissim to Detroit, Yael met with Michigan Governor Gretchen Whitmer accompanied by her staff who came to learn about the Yozmot Atid model with an interest in replicating it in Michigan, where the racial divide is particularly high. It is possible that a U.S.-based pilot of Yozmot Atid may launch in 2020 as well.
We are very heartened by these developments as they both reinforce the need that we always believed existed in the field—and the suitability and adaptability of the model we are developing to successfully address that need. More than that, it represents something bigger: If Israel’s renown in High-Tech has brought it international acclaim as a ‘start-up nation,’ it is our hope that our work with this larger start-up nation may ultimately see our country placed at the top of international lists—in the export of economic opportunity, sustainable development and economic independence in line with UN 2030 SDG goals. In short: A true ‘Tikkun Olam.’
“I know the Start-Up Nation very well,” says Nissim Bar-El, founder and chair of Yozmot Atid—and renowned founder, CEO and chair of cyber-security pioneer Comsec. “As a veteran of the Israeli Start-Up industry, I witnessed the emergence of two, wholly parallel ‘Israel’s: The first was a high-tech giant. The second was a country of significant poverty and income inequality that was gradually making its way to the bottom of the OECD’s list.” As a co-founder and active member of umbrella relief agency Latet for over 20 years, Nissim personally distributed food-packages to low-income Israeli families in severe distress in the country’s periphery. After years of this, concerned that the impact of this work was minimal, he decided to conduct an impact study. “We found that what we were doing was in many ways the antithesis to a lasting Tikkun Olam. Families needed more than just a food-package. What they needed was a ticket to real financial independence—tools to escape economic hardship for themselves and for their children. There were so many people with the ambition and the abilities to take this step. As an entrepreneur and businessman of many years, I realized that micro-entrepreneurship was the way to a true Tikkun Olam.”
Driven by a mission of replicating the start-up nation onto the world of micro-enterprise, Nissim worked to develop a pilot initiative in business entrepreneurship that could serve as a model for all of Israel. He soon enlisted Yael Ovadia a senior business consultant with extensive management experience in companies ranging from Dr. Fischer to Maccabi Health and Materna, to lead this new pilot through Latet. Yael jumped at the opportunity, working as a volunteer. “At that time, I was in charge of setting up entrepreneurship workshops for a group of ultra-Orthodox women in Ashdod,” says Yael. “The end of that course was a defining moment for me: I could see how this program had simply changed the lives of these women and their families—and in the process had totally transformed their family’s financial situation. It was huge. I didn’t think twice about joining Nissim; and it’s proved to be a life-changing experience.”
Bolstered by a wide-ranging study that brought Nissim to visit entrepreneurship programs across three continents, the program that Nissim and Yael eventually developed through this pilot is today provided free of charge to 1,000 aspiring entrepreneurs a year, thanks to a complex of scores of partnerships with businesses and government—and a growing corps of hundreds of professional business volunteers. “This is a life mission for me,” says Nissim, who has since devoted much of his time and substantial resources to serve as chair of Yozmot Atid at 100% capacity (on a purely voluntary basis). For her part, Yael left her high-paying consultancy to work in the nonprofit they founded, where today she serves as CEO. Together, they today bring their substantial business expertise to ensure a lasting social impact.