Anyone who donates to a nonprofit in Israel almost always hears the same question: "Do you have 46?" Behind that number stands one of the most important tools in the world of social action: a tax benefit that returns part of the donation to the donor and encourages people and businesses to support public institutions.
In this guide we have gathered what you need to know about Section 46, both for donors who want to know how much they will get back and for social entrepreneurs who are raising money for a venture and hear this question at every meeting.
What is Section 46?
Section 46 of the Income Tax Ordinance states that anyone who donated money to a public institution approved by the Israel Tax Authority is entitled to a tax credit against their income tax. Put simply: part of the donation comes back to the donor, through a reduction in the tax they pay.
The approval is granted to the institution itself, usually a nonprofit or a public benefit company, after the Israel Tax Authority has reviewed its activity. It is granted for a defined period and renewed from time to time, so a nonprofit that was approved a few years ago is not necessarily approved today.
It is worth knowing the difference between a credit and a deduction. A deduction reduces the income on which the tax is calculated. A credit reduces the tax itself, directly. Section 46 gives a credit, so every donor who pays tax gets back the same percentage, regardless of their tax bracket.
How much money comes back to the donor?
- Individuals, including the self-employed and businesses that are not limited companies: a tax credit of 35% of the donation amount.
- Limited companies (Ltd.): a credit at the corporate tax rate, which currently stands at 23%.
For example, a person who donated NIS 1,000 will receive a credit of NIS 350, so the donation actually cost them NIS 650. A company that donated NIS 10,000 will receive a credit of NIS 2,300.
Is there a minimum amount? And a ceiling?
Yes, both. To receive a credit, your total approved donations in the tax year must exceed a minimum amount, which stands at NIS 207 for the years 2024 through 2026. The amount is counted across all your approved donations in the year together, so several small donations to different institutions can pass the threshold together.
The ceiling is 30% of the donor's taxable income, or a fixed annual ceiling of NIS 10,354,816 in 2026, whichever is lower. Anyone who donated more than the ceiling does not lose out: the balance can be carried forward to the next three tax years.
The amounts are updated every year, so before a large donation it is worth checking the current figure on the Israel Tax Authority website.
A full example: what the calculation looks like
Let's say Dana, a salaried employee, made three small donations during the year: NIS 80, NIS 70 and NIS 100, to three different approved institutions. Each donation on its own is below the minimum amount, but together they reach NIS 250 and pass the threshold. Dana will receive a credit of 35% on the full amount, that is NIS 87.5.
Now a larger example. Yossi, whose annual taxable income is NIS 120,000, donated NIS 40,000. His ceiling is 30% of his income, that is NIS 36,000. On that amount he will receive a credit of NIS 12,600 this year, and he can carry the remaining NIS 4,000 forward to the following years.
How do you check that a nonprofit is approved under Section 46?
Not every registered nonprofit holds a Section 46 approval. The safe way to check is on the Israel Tax Authority website, through the "Donation Approval" service on gov.il. You search by the institution's name or number and see whether it has an approval and until which year it is valid.
Another sign is the receipt. A receipt for a tax-deductible donation states that the institution is approved under Section 46. If there is no such approval, the donation can still be very important, but it will not earn a tax benefit.
How do you actually receive the credit?
Employees and pensioners
The Israel Tax Authority has moved to online reporting. Public institutions report the donations they received, and these appear in the donor's personal area on the Israel Tax Authority website. From there, there are two ways to receive the credit during the year itself:
- Through your employer: if your employer's payroll software is connected to the "Israel Donations" (Trumot Israel) system, you authorize them in your personal area to receive the information, and the credit appears directly on your payslip. The employer sees only the cumulative amount, with no breakdown of the institutions.
- Through online tax coordination (te'um mas) on the Israel Tax Authority website. Once the institution has already reported the donation, there is no need to attach receipts.
The self-employed
The self-employed receive the credit as part of their annual tax return. It is taken into account in the final assessment, and is not deducted from advance payments during the year.
Forgot to claim it? You have six years
Anyone who donated and did not receive a credit can file a tax refund request after the end of the tax year, going back up to six years. That is why it is worth keeping your receipts, even if they seem unnecessary right now.
How do you know the receipt is valid?
Most receipts today are digital. For such a receipt to be recognized, the nonprofit must issue it with software that the Israel Tax Authority has approved for issuing receipts. If in doubt, you can ask the nonprofit for the number of the company that issues its receipts, and check it on the Israel Tax Authority website.
A digital receipt that you submit manually must include the words "computerized document" and the donor's details. And for large donations, especially by check, the Israel Tax Authority may also ask for bank statements, so it is worth keeping them.
Why think about this before the end of the year?
The credit is calculated by tax year, from January to December. A donation made on December 31 counts toward that year, and a donation made one day later counts toward the next year. That is why many donors, and especially businesses, concentrate their donations toward the end of the year, when they already know what their annual income is and what their ceiling is.
Those who receive the credit through their employer will benefit from it sooner if they arrange it during the year. And those who only get around to donating in December can still receive the full credit, through a tax refund or the annual return, once the year has closed.
This is relevant to nonprofits and ventures too: the period before the end of the year is the natural time to reach out to donors, remind them that the donation is tax-deductible and explain how much it will actually cost them.
What does not qualify for the credit?
The credit is given for monetary donations only. Volunteer hours, work or professional services given free of charge, however important, do not qualify for a credit under Section 46.
And as for spouses: when one of them donates, the credit can be given to either of them, and they choose who will use it. This is useful when one spouse has a higher taxable income.
And what does this mean for a new social venture?
This is where the challenge begins for many social entrepreneurs. A Section 46 approval is granted to a public institution that is already operating, and the road from founding a nonprofit to receiving the approval takes time. During that period a new venture struggles to raise money, because many donors, and especially businesses and foundations, prefer to donate when there is a tax benefit.
Alumot was built precisely for this gap. The entrepreneur establishes the venture inside Alumot and receives a full organizational, financial and legal framework with no need to found a nonprofit. Donations to the venture are tax-deductible in Israel under Section 46, in the US through PEF and in other countries through JGIVE.
We want to be precise here: Alumot is not a conduit for passing on donations and does not lend out its Section 46 approval. Every venture is part of the nonprofit's activity and is run as a closed budget unit. Donations are received and managed within Alumot, under supervision and oversight, and the funds are used solely for the approved social purpose.
Frequently asked questions
How much do you get back on a donation of NIS 500?
A person who donated NIS 500 to an approved institution will receive a credit of 35%, that is NIS 175, provided that their total approved donations that year exceeded the minimum amount.
Can you get a credit for a donation from a few years ago?
Yes. You can file a tax refund request going back up to six years, with the receipts attached.
Does someone who does not pay tax get a credit?
The credit reduces tax that the donor owes, so someone with no taxable income will not benefit from it. The credit applies to all taxable income and not only to salary, so income from interest or capital gains can count too.
Is a donation through a crowdfunding site tax-deductible?
It depends on who receives the money. When the campaign is connected directly to an institution that holds a Section 46 approval, and the institution issues a receipt in its own name, the donation is tax-deductible. When the money goes to a private individual or to a body that is not approved, it is not. Before donating, it is worth checking whose name the receipt will be issued in.
Is a donation to a venture operating within Alumot tax-deductible?
Yes. A donation to a venture at Alumot is a donation to Alumot, and it is tax-deductible under Section 46. You can get to know all the ventures and choose whom to support.
Have an idea for a social venture and don't want to get stuck in bureaucracy? Tell us about your venture.
The information in this guide is general information, updated for 2026, and does not replace personal tax advice.