Haredi Private Kindergartens Face Financial Crisis Despite Holding Hundreds of Millions in Assets

The Israeli government is set to approve funding for private kindergartens in the Haredi education sector on Sunday, aiming to prevent the dismissal of hundreds of veteran kindergarten teachers. However, behind the urgent appeals from Haredi lawmakers and kindergarten networks lies a complex financial reality. These private kindergarten networks, operated by nonprofit organizations, reportedly hold liquid assets and real estate valued at hundreds of millions of shekels, yet have failed to comply with prior agreements with the state regarding full reporting of teachers' working hours, a condition for receiving additional budget allocations.

Haredi Members of Knesset, including Moshe Gafni and Aryeh Deri, have highlighted the risk of mass layoffs without increased funding tied to the "New Horizon" reform, which adjusts pay based on seniority. Around 150 kindergarten teachers from the Agudat Yisrael kindergarten network sent an urgent letter warning of imminent job losses after decades of service. Kindergarten network managers also stressed that without the reform and salary supplements, they cannot sustain operations.

The Ministry of Finance claims that only about 30% of kindergarten teachers’ working hours have been reported, attributing delays to the nonprofits’ fear of exposing financial irregularities. Conversely, the Haredi organizations blame the Ministry of Education for slow processing of reports, which may prevent timely completion before the new school year.

Data compiled by the Israel Free Association, which promotes transparency in Haredi education, reveals that major kindergarten networks have posted annual profits and hold substantial liquid assets: Agudat Yisrael’s kindergarten network reported a 6.8 million shekel profit and 45.7 million shekels in liquid assets; Beit Yaakov network reported 5.2 million shekels profit and 140 million shekels in liquid assets plus approximately 100 million shekels in real estate; and Maayan Hachinuch Hatorani network reported 5.2 million shekels profit and 48 million shekels in liquid assets.

The Finance Ministry warns that the upcoming government funding plan might inadvertently reward nonprofits that have not fulfilled reporting commitments over those that have cooperated. The Haredi organizations argue that the kindergarten operations themselves are financially unprofitable and that profits come from other activities such as after-school programs, necessitating state subsidies to sustain kindergarten services.