As of late 1988, Israel had a number of so-called "nongovernment public sector" organizations, also known as "national institutions." For all practical purposes, they constituted an integral part of the government system, performing functions that were vital to the fulfillment of Zionist aspirations and to the maintenance of Israeli society. Political parties competed for leadership and patronage within them. During the Mandate period, these organizations served as the British administration's officially recognized governing bodies for the Jewish community in Palestine. The Jewish Agency Executive, for instance, was recognized by the governments of Britain, the United States, and other states and international organizations, including the United Nations (UN). In the process of their work, the organizations acquired considerable experience in self-rule, not to mention jealously guarded bureaucratic prerogatives.

These bodies engaged in fund-raising in the Diaspora (see Glossary), operated social welfare services, and were involved in education and cultural work. They operated enterprises, including housing companies organized immigration and promoted Zionist work. After Israel achieved independence, many of these services were taken over by the state, but others remained under the control of these well-entrenched organizations. They came to function side by side with the government, and their activities often overlapped, especially in the field of social welfare services. Until the early 1970s, these organizations were almost completely dominated by Israeli governments later, the organized representatives of Diaspora Jewry began to function more independently.

Data as of December 1988