Institute Initiative Wins Presidential Honor

        President Weizman meets a
        KIEDF-financed Ethiopian entrepreneur.
        (Click to enlarge)
        On July 17, 1996, president Ezer Weizman of Israel honored the Koret Israel Economic Development Funds (KIEDF) in a ceremony at his official residence, Beit Hanassi. KIEDF received presidential recognition for having financed the creation of more than 200 small businesses, largely by Russian immigrants in the Negev. As of July 30, 1996, KIEDF had provided $1,781,417 of loan guarantees, which have facilitated a total financing of $10,568,000 and the cration of 313 new jobs.

        How and why did this presidential honor come about?

        In 1988, the Institute for Advanced Strategic and Political Studies launched its program of economic policy research with the publication of Toward Growth: A Blueprint for Economic Rebirth in Israel, followed by its distinguished series of Policy Studies, the annual Scorecard on the Israeli Economy, and its informative Quarterly Report. In 1990, Alvin Rabushka, director of economic research, and President Robert Loewenberg began to explore ways in which philanthropic assistance could be invested in private sector initiatives to stimulate economic development and job creation that would provide some of the thousands of new Russian immigrants pouring into Israel with an opportunity to earn their own keep, rather than depend on the government for handouts. In our view, putting philanthropic dollars to work creating private enterprises was an integral component of the Institute's vision of moving Israel one step closer to the goal of economic reform and self-sufficiency.

        Loewenberg and Rabushka first broached their idea of a philanthropic "investment bank" with leaders of the Zionist Organization of America during their annual meeting in Jerusalem in 1990.
        Dr. Michael Reiner, Koret Israel representative,
        presents Certificate of Appreciation to President
        Ezer Weizman.
        (Click to enlarge)
        Next, they explained the idea to the New York United States. The two made little progress. Most Jewish leaders feared the wrath of the UJA and the Jewish Community Federation establishments, which resisted all efforts to reallocate current charitable dollars under their control away from traditional consumption-based programs. On more than one occasion, we were shown the door.

        Enter Tad Taube

        In 1992, Ellis Alden, a friend of the Hoover Institution, invited Alvin Rabushka to a breakfast with Tad Taube, president of the San Francisco-based Koret Foundation. Rabushka explained the purposes and programs of IASPS, and Koret subsequently made a small initial grant to the Institute, followed thereafter with a more substantial endorsement of the Institute's programs. Taube was a rare breed of Jewish leader who shared the Institute's view on the importance of promoting free market reforms in Israel.

        On January 11, 1993, Rabushka first proposed to the Koret Foundation that it take the lead in creating a "venture capital banking institution" to seek out Russian immigrants who show the potential for entrepreneurship and provide start-up loans on the basis of commercially viable proposals. The Foundation gave Rabushka the go-ahead to put together a concrete plan.

        KIEDF was an institutional cration of IASPS.

        With assistance from Dr. Michael Reiner, Koret's Israel representative, Rabushka recruited Carl H. Kaplan, a fresh immigrant from New York's business community and a former Young Jewish Leadership cabinet member, to work up the financial details and assume managerial responsibility for the day-to-day implementation of the project. Carl, in turn, organized a cooperative agreement with Lesley Rubenstein, managing director of the Initiative Center of the Negev, and with the Business Development and Special Project Division of Bank Otzar Hachayal in Beershva.

        Institute Certificate of Appreciation
        to President Weizman from Robert J.
        Loewenberg, Chairman, KIEDF Board
        of Directors in Israel.
        (Click to enlarge)
        Institute Initiative

        In June 1993, Rabushka formally submitted his plan, the "Koret Negev Initiative", to the Koret Foundation. Concurrently, a non-profit organization (amutah), the Koret-Israel Negev Development Fund, later renamed Koret Israel Economic Development Funds, was lawfully incorporated in Israel. Robert Loewenberg, president of IASPS, was elected chairman. Other founding signatories of the amutah included Rabushka, Kaplan, Reiner, David Yerushalmi (chairman of the board of trustees of IASPS), Yuli Koshorovsky, and a prominent Beersheva businessman. On June 23, 1993, the Koret Foundation approved a three-year, $1,000,000 grant for KIEDF loan activities.

        Make no mistake about it: KIEDF was an institutional creation of IASPS in the form of a specific policy instrument developed by Loewenberg and Rabushka to build free-market institutions in Israel.

        The Koret Foundation next took the lead in establishing the American Friends of the Koret Israel Economic Development Funds (AFKIEDF). Funding partners included the Jewish Federation of the North Shore (Boston area) and the three Jewish federations in the San Francisco Bay Area. Tad Taube was selected president of AFKIEDF and a prominent group of board members and a distinguished advisory committee was assembled.

        The success of KIEDF formally recognized by President Ezer Weizman, is the story of the Institute: to craft good ideas, to persuade important individuals and organizations in the Jewish community in the United States and Israel of their merit, and to oversee the implementation of a specific policy instrument that supports economic liberty and growth in Israel. Congratulations are in order to all those involved.

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