The Central Fund for Israel–which lists its office at the same address as Marcus Fabrics on 6th Avenue in New York– is a 501(c)3. That means contributions are 50 percent tax deductible. The Central Fund gives a lot of its money to educational institutions in the Jewish settlements in the Occupied Territories.
The spirit of federal law is very clear: charitable organizations won't discriminate on a racial basis. Two questions the government asks about educational organizations: "Does the organization have a racially nondiscriminatory policy toward students by statement in its charter….?
"Does the organization discriminate by race in any way…?"
Well, in 2004 the Central Fund sent $106,936 to an anti-Arab Israeli group that deals with Yeshivas, Mishmeret Yesha "Guardians of Yesha." Here's a nice rundown of the grantee from an article in the Jerusalem Post:
[Moshe] Hager-Lau [a rabbi and colonel who chairs "Premilitary Religious Academies" in the West Bank] asked Mishmeret Yesha , an organization
that has trained more than 100 rapid response teams throughout , to help train the yeshiva students.
Israel Danziger, head of operations at Mishmeret Yesha, said he had been asked by Hager-Lau to put together a general plan for educational institutions that would improve their preparedness to deal with terrorist infiltrations.
Danziger said the plan included an early-warning system;
drills that would teach every settlement resident where to go in case
of an attack; coordinating and practicing communications between
emergency organizations and residents; and conducting periodic mock
However, one of Mishmeret Yesha's central security demands is a no-Arab policy.
"We don't want to have anything to do with any
organization that employs Arabs," said Danziger. "There is no sense in
training a rapid response team in a settlement or an institution where
you have a bunch of Arabs walking around gathering information."