Break the cycle of poverty for the sake of our kids

The outsourcing of social services must include a mandate for measuring social value.

By ELI COHEN JANUARY 13, 2025 02:48

ELI COHEN, CEO of Pitchon Lev. The organization provides a voice to those plagued by poverty, representing them through advocacy and promoting legislative change, says the writer. (photo credit: Yaniv Kader)

For 76 years, Israel has grappled with the challenge of poverty. Not only has the state failed to halt or reduce this pervasive issue, but each year brings alarming increases in poverty rates, with new populations slipping below the poverty line, and an ever-growing list of challenges.

It’s true that emergencies and wars complicate the battle against poverty, but they are not the root cause of its expansion. Instead, the real culprit lies in Israel’s longstanding paradigm – a way of operating that lacks measurement, budgets, and defined goals.

Ask any CEO of a self-respecting company, and they’ll tell you that no project is launched without these fundamental elements. Yet in Israel, for 76 years, actions have been taken without measuring outcomes, allocating proper budgets, or setting clear objectives.

This approach has countless examples, all leading to the same outcome. Take, for instance, the issue of government procurement for social services. The State of Israel provides social services to underprivileged populations, with 80% of these services outsourced to private suppliers at a cost of billions of shekels annually.

This model, introduced in the 1990s for reasons of efficiency and cost savings, has increasingly raised concerns about ineffectiveness, poor service quality, and – most critically – harm to the very populations these services are meant to help. The root problem is the state’s failure to set measurable goals, leaving no benchmarks for success.

At risk youth (credit: PIXABAY)

As a result, the entire field suffers from inadequate oversight and a lack of standardization. And when there’s no clear destination, there’s no reason to expect progress.

But the lack of clear goals isn’t the only systemic issue in Israel’s fight against poverty. The allocated budget – or lack thereof – poses another major obstacle. Poverty in Israel has many faces, with one of its most significant aspects rooted in education.

Cycle of poverty

Youth at risk, when inadequately supported in informal educational settings, are at high risk of perpetuating the cycle of poverty into the next generation. Despite widespread recognition of the importance of breaking the intergenerational poverty cycle, year after year, the Israeli government slashes funding for programs targeting at-risk children and youth, leaving dozens of NGOs to scramble for a few million shekels annually.

This is the status quo in normal times – imagine the situation during a war, when tens of thousands of children and teenagers are suddenly added to the at-risk population.

Adding to the lack of budget and goals is the absence of reliable data and measurement, which should be the starting point for any initiative or project. How can the state address poverty when one government ministry calculates the number of impoverished citizens as X, while another ministry uses figure Y?

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How does the state define food insecurity when the Health Ministry employs one methodology while the Agriculture Ministry uses a completely different metric? And what about the calculations used by the National Insurance Institute or the Welfare Ministry? How can the state realistically aim to lift families out of poverty when it doesn’t even know how many people it needs to assist – or how?

To break the cycle of poverty in Israel, and to do so effectively, the state must shift its paradigm and abandon the “touch-and-go” approach in favor of a system where every initiative is subject to oversight. A historic opportunity lies ahead: as the Knesset debates the National Authority for Combating Poverty bill, currently between its first and second readings, a new framework could take shape.

With a fixed percentage of the national budget allocated to the authority, Israel could finally establish a system for clear impact measurement, goal-setting, accountability, and – above all – results. This initiative could bring an unprecedented bipartisan consensus and the long-awaited change after 75 years of stagnation.

Additionally, the outsourcing of social services must include a mandate for measuring social value. This would enable the state not only to calculate the costs of intervention but also to assess its impact on reducing social disparities, improving quality of life, and strengthening social resilience.

These steps would allow all stakeholders in Israel to address poverty with a professional eye, rather than relying on emotional appeals. They would transform the mindset of public sector leaders, enabling them to proudly report how many people were lifted out of poverty through a project rather than how many were added to the ranks of those needing assistance. Above all, these steps could achieve the unimaginable – bringing real, tangible progress in reducing poverty in Israel.

How? It’s not a matter of what needs to be done but rather how: measurement, budgets, and goals.

The writer is CEO of Pitchon-Lev.