Posted on: February 28, 2010 Posted by: Mitchell Plitnick Comments: 9

In the wake of the public row over the attack on the New Israel Fund, many supporters of Israeli civil society are stopping to catch their breath. The support NIF received was quite impressive and speaks very well about the deep and abiding care that Jews and our friends the world over have for the best ideals among Israelis as expressed by a stunning array of groups that seek to improve conditions both in Israel and over the Green line.

But while people recover from that episode, a far more dangerous threat has emerged, this time not coming from an ultra-nationalist private group like Im Tirtzu but from the Knesset itself.

Thousands marched last December in Tel Aviv in Israel's first human rights march

A bill that has passed its preliminary first reading in the Knesset, with the Orwellian name “Bill for the Duty of Disclosure for Someone Supported by a Foreign Political Entity,”purports to close “loopholes” regarding transparency of funding for Israeli non-profit entities.

In practice, the bill selectively targets a wide array of progressive groups and would seriously impact their ability to fund their activities or even to engage in them. Any state programs funded by “foreign political entities” would not be included in the bill’s restrictions; nor would right-wing groups which are universally funded by private money.

Before I explain how this would come about, we should first understand some background about non-profit organizations in Israel. The field there is very different than what most of us are used to.

In the United States, there exists a broad network of foundations and philanthropies, encouraged through tax examptions by the government, to fund various social causes of all sorts. In Europe, government funds are dispersed through various agencies that act much like foundations in the States.

But Israel has none of this; not surprising as Israel was born with the help of support from outside funding sources from the earliest days of the Yishuv through the creation of the state and up to the present day. Thus, Israeli organizations that pursue advocacy, social services and other forms of activism depend on funding from overseas. The government itself gets help from other countries to pursue various projects, as does Israel’s education sector, Israeli settlers in the West Bank and East Jerusalem and a wide variety of Jewish religious and cultural projects throughout the country.

Israeli NGOs in particular depend heavily on European Union funding. This has never been a secret. When such groups as NGO Monitor want to smear progressive Israeli groups by insinuating that such foreign funding dictates their actions, they need only look at groups’ web sites and annual reports to find the list of donors.

That’s problem one with the new Knesset bill: its stated purpose is blatantly redundant. Israeli NGOs already are required to report their funding sources and they do quite rigorously; it is worth noting that in all this firestorm, no activist group or Knesset member has accused any Israeli NGO of failing to live up to its legal disclosure requirement.

The redundancy isn’t just unnecessary, it will greatly increase the administrative burden on Israeli NGOs. Anyone who has ever worked for a non-profit knows the strain that reporting requirements place on organizations’ resources. Increasing that without any need cannot be understood as anything other than an attempt to diminish NGOs’ ability to do the work for which they exist.

The second problem with the bill is the definition of political activity. It includes any attempt to influence public

LGBT Pride in Israel

opinion, well beyond lobbying or any similar effort. It would thus mean that any group, whether working on human rights, women’s rights, services for the poor, or any other piece of social change would be labelled “political.” If this was the US, it would mean that any such group would lose its tax-exempt status, and in fact, it means the same in Israel.

The result of that broad definition is two-fold. One, by labelling social change groups, despite their being completely non-partisan and outside of the electoral process, as political, it will undermine their support and their self-portrayal as standing for specific principles on specific issues. This is a way of attacking their credibility. The whole point of categorizing such groups as outside of the political process is to differentiate between social change activites and partisan politics. This is the very backbone of a vibrant democracy and removing this distinction is a direct attack on the democratic processes and internal debates that define democracies, however flawed or strong they may be, throughout the world.

The second result is that such groups would, indeed, lose their tax-exempt status in Israel. This might mean a serious drop in funding, as many foreign entities, governmental and private, have regulations against making donations to social change groups that can be taxed. That is added to the obvious cost to those groups of having to pay taxes they have not been forced to pay before. Thus, even private funding might be affected, but in a way that only hits groups on the progressive side of the agenda—settlers who receive massive funding from groups in the US would not be affected, for instance.

Another major problem is the definition in this bill of transparency. The bill requires that every single public document, media appearance, mass e-mail, or meeting include disclosure of all funding from “foreign political entities.” Imagine for a moment a spokesperson from a battered women’s organization in Tel Aviv that receives EU funding having to take 10 seconds out of a 30-second sound-byte they get on the radio to make this disclosure. E-mail messages sent by an Israeli environemental group will be discussed in some circles not in terms of the merits of their message, but in terms of who is funding them.

And the authors of this bill are not kidding around about its enforcement. The bill provides for personal liability for staff, board members and simple members of a group, with penalties that can include up to a year in jail.

If this bill is enacted, Israeli NGOs will face a choice: either lose their tax-exempt status and take on very onerous disclosure and administrative burdensas well as a major increase in the cost of their operations or refuse to take money from what is now, and perforce must be under the Israeli system, one of its main sources of funding. In either case, the viability of Israeli NGOs in the future is in serious jeopardy if this bill becomes law.

Veteran observers of Israeli politics may take this lightly; after all, many frightening (as well as many progressive) bills are proposed in the Knesset and even pass a first reading but never come close to becoming law.

This bill, however, is very different. First, it comes while Israeli anxiety over the Goldstone report is still very high, and despite the fact that Im Tirtzu has been completely discredited, the headlines it made are still fresh in people’s minds—as is the animosity toward the Israeli peace and human rights groups who are, ostensibly, this bill’s primary targets. The discussion of it has centered around such groups and most Israelis are not considering the notion that environmental and social change movements that have nothing to do with Israel’s conflicts will also be deeply affected.

More importantly, bills that have been more for show than anything else in the past have come from a partisan section of the Knesset. This bill is being proposed by MKs from parties both in the current government and in the opposition. The bill’s proponents include members from the three biggest parties in the Knesset, Likud, Kadima and Yisrael Beiteinu.

While an earlier bill targeting the New Israel Fund was defeated by both rigorous lobbying efforts from Israel civil society and a broad section of Knesset members (including notable Likud figures) who saw it as an attack on free speech, that does not assure the defeat of this bill.

The transparency bill is much more cleverly crafted in the public eye. It is a wolf of an attack on Israeli democracy in the sheep’s clothing of the very reasonable and standard requirement of transparency in non-profit reporting. It has generated only some attention in Israel and very little outside of it thus far.

This has to change. If Israel remains on this course of attacking its own civil society structures, just how can anyone reaosnably argue that it is a democracy? This is, to be sure, a fight that must be led in Israel, but anyone who cares about Israel’s future as a democracy, no matter their other political views, should be concerned about this.

9 People reacted on this

  1. Where are you getting the idea that advocacy NGOs would lose their tax-exempt status in Israel? I didn’t see that in the bill.

  2. Ami,
    The bill requires that the groups it is targeting as recipients of the specific support the bill discusses would register as political entities with the political parties’ registrar. Defining such groups as political, which they would be because the bill defines “political” as any group seeking to influence public opinion, means they lose their tax-exempt status.

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