‘Settlements in Palestine’ reports U.S. charities violate tax laws

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Shilo settlement
Shiloh settlement in the West Bank. (Photo: Sameer Bazbaz)

Settlements in Palestine, a research and advocacy settlement watchdog, published a Report on Financial Support of the Israeli Settlement Enterprise By United States Non-Profit Foundations and Organizations During 2009, exposing tax fraud committed by U.S. foundations and U.S. tax-exempt charities, through grants made to settler organizations. The report reveals a total of $274 million was funneled from U.S. organizations to settlements from 2002-2009, compared to $600 million dollars the Israeli government spends each year in supporting the settlements:

From 2002 through 2009 (the last year complete returns are available), 183 non-profit organizations (129 private foundations, 54 corporations) in the United States raised and spent approximately $274,000,000 in direct support of the Israeli settlement enterprise.

Tax-fraud committed by U.S. tax-exempt charities is not news. Mondoweiss has been following the story for years. Activist groups such as Adalah NY have called into question groups such as the Hebron Fund, citing U.S. tax law, and international law. And, in June 2010, the New York Times (co-authored by Ethan Bronner) highlighted U.S. tax-exempt charities donating to settlements, where the NYT, wrote:

A New York Times examination of public records in the United States and Israel identified at least 40 American groups that have collected more than $200 million in tax-deductible gifts for Jewish settlement in the West Bank and East Jerusalem over the last decade. The money goes mostly to schools, synagogues, recreation centers and the like, legitimate expenditures under the tax law. But it has also paid for more legally questionable commodities: housing as well as guard dogs, bulletproof vests, rifle scopes and vehicles to secure outposts deep in occupied areas.

Settlements in Palestine’s report uncovers a more extensive list of U.S. foundations and charities that violate tax code, and uncovers six for-profit organizations that received approximately $400,000 in 2009. These organizations — American Friends of Bet El, American Friends of the College of Judea and Samaria, American Friends of Yeshiva Shavei Hebron, American Friends of Shiloh, American Friends of Ulpana Ofra, and American Friends of Yeshivat Hesder Shiloh — either had their IRS tax exempt status revoked, or never filed for it in the first place, yet still receive grants that are only for 501c3s. In one example, American Friends of Shiloh never filed for IRS tax-exempt status, received $1,080 in funds from the L & L Foundation, in Lawrence, NY.

The report also investigates funding allocated through American charities to radical right-wing organizations:

As an example, Yeshivat Nir Kiryat Arba, headed by Rabbi Dov Lior, who promotes killing non-Jews, has received an average of over $370,000 each year since 2001 through the American Friends of Yeshiva High School of Kiryat Arba and the Friends of Yeshivat Nir Kiryat Arba. In prior years, the Amy and James Haber Foundation and the Irving Moskowitz Foundation were among the funders of the yeshiva, but neither foundation listed the two non- profit organizations supporting the yeshiva as a recipient in 2009.

Investigating specific foundations’ IRS 990s, the report noted the Irving Moskowitz foundation had substantial errors in their tax filings, which indicated the charity launders money to settlements through practices such as property purchases.

The report concludes funding from these tax-exempt, or for-profit charities, provides material support to the “matrix of Israeli legislation, government financial assistance, and administrative procedures that is altering Jerusalem’s ethnic composition and separating Palestinians in Jerusalem from the rest of the occupied Palestinian territory, and Palestinians in the rest of the West Bank from their cultural and business center in Jerusalem.” With total U.S. charity gifts per year ranging from $20 to $50 million from 2002-2009, U.S. funds provide a substantial portion of the maintenance and continuation the development of settlements in the West Bank.

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This is an interesting tact to pursue – go after them for tax fraud. It worked for Al Capone…

We do well to remember that some Muslim charities were closed down in the USa and their principal officers sent to jail for long terms NOT for giving money to HAMAS but to supporting hospitals and so forth which other groups (perhaps Red Cross) also supported but which the IRS characterized as “fronts” for HAMAS. Government never “went after” the other charities, only the Muslim ones. So why should the government reasonably be expected to… Read more »

the settlements are illegal, funding them should be illegal too. pabelmont’s point stands and if this was muslim and not jewish intransigence would be going to jail.

BTW, 501(c)(3)’s are not just “tax exempt,” they are “tax deductible.” The difference is important. It means that when Irving Moskowitz makes a contribution, you and I and all American taxpayers are effectively boosting his contribution by another 35%.

(We have a CPA on this forum. Maybe Richard can explain to everyone just how this works. I’m sure he’s as indignant as anybody about this abuse of power.)