The Israeli public, media, government and Knesset (legislature) are conducting an intense debate on massive foreign government funding for highly political non-governmental organizations (NGOs). Important concerns about the manipulation of Israeli democracy by foreign governments through NGO funding, and on the influence of these groups, triggered this debate. 

The media coverage of these issues, both in Israel and outside, is often distorted and confused. Basic questions about NGOs, NGO funding, and proposed Knesset legislation, need to be addressed.

NGO Monitor has been researching these issues since 2002, including details of foreign (mainly European) government funding. The unique NGO funding policies as applied by European governments to Israel, the lack of transparency in their implementation, and the contrast between public declarations and actions, are central to this analysis.

These FAQs address the core questions and present the basic facts, to promote a more informed and substantive discussion on these complex issues.

What is an NGO?
In theory, non-governmental organizations (NGOs) are autonomous, non-profit and politically unaffiliated groups that claim to promote an agenda based on universal moral values, such as human rights, democracy, the environment, etc. NGOs can contribute to civil society and democracy by using their soft power to challenge governments and promote social interests, but they themselves are not necessarily democratic institutions. NGOs lack a system of checks and balances, and their powerful officials generally only provide accountability to their funders and activist members, and not to the citizens or societies whose lives are directly impacted by their activities.

Can an NGO receive sizable portions of its budget from governments and still qualify as a “non-governmental” organization?
No. As noted above, NGOs are meant to represent civil society, not the interests of foreign governments. Israeli NGOs that receive foreign government funding benefit from the misleading image of being “non-governmental,” non-political, and based in “civil society.” The government funders also use this framework to justify their use of NGOs as a policy instrument, and on a scale which is unique to Israel.

How many NGOs funded by foreign governments operate in Israel?
While the level of European and other foreign government funding for Israeli political advocacy NGOs is very large, it is impossible to provide a comprehensive accounting because, for many years, this funding was mostly done in secret. In addition, many Israeli non-profits, in violation of Israeli law, do not submit annual reports to the Registrar of Non-Profits (Rasham Amutot). However, as more information becomes available, particularly after the NGO Transparency Law (February 2011), additional and verifiable information will become available.

As of November 2011, NGO Monitor’s research reports list 23 Israeli political advocacy NGOs funded by foreign governments, all of which actively oppose, in varying degrees, the policies of the democratically elected government of Israel. A number of powerful groups receive more than 70% of their annual donations from foreign governments. (See Appendix 1)

How do these NGOs contribute to political campaigning and advocacy outside of Israel?
Although most of the foreign government funding is formally designated for “educating the Israeli public” and “changing public opinion” (both in violation of the norms on non-interference in other democracies), these Israeli NGOs are very active externally, in the delegitmization and political warfare against Israel. This campaign was crystallized at the 2001 UN World Conference Against Racism in Durban, South Africa, where 1,500 NGOs adopted a document and plan of action calling for the “total isolation of Israel.” To achieve this goal, NGOs frequently label Israel an “apartheid” state, make false allegations of “war crimes,” promote anti-Israel BDS (boycotts, divestment, and sanctions), and bring lawfare cases against Israeli officials, among other tactics.

Israeli NGOs have consistently participated in these campaigns, including in the course of European and UN lobbying. Many participated centrally in the discredited Goldstone Report process.  The Goldstone Report on the Gaza War – created by and used for pressing delegitimization – was comprised largely of false and unverifiable NGO accusations. As part of their political campaigns, Israeli NGOs provided numerous allegations that lacked credibility, including many issues unrelated to the fighting in Gaza; were featured prominently in the final Goldstone Report; ignored thousands of Hamas rocket attacks, every one of which is a war crime; lobbied their European government patrons to adopt the report’s biased recommendations; and actively opposed efforts in the U.S. Congress to oppose the Goldstone Report.

In addition, many of these Israeli NGOs, (including B’tselem, Adalah, Physicians for Human Rights-Israel, Public Committee Against Torture in Israel) have lobbyists in foreign capitals, who seek additional funding and promote the private political agendas of the NGOs. The use of government funding for such lobbying is incompatible with good governance principles.

Why do foreign governments provide so much money to Israeli political advocacy NGOs?
European and other governments use direct funding for Israeli NGOs in order to promote their own views and interests, regardless and often in opposition to the policies of the democratically elected representatives of the Israeli public. The NGOs that receive such funding promote opposition policies on highly complex and sensitive issues such as Jerusalem, the future of the West Bank, responses to terror in Gaza, and other core issues which are central to the lives of Israeli citizens. As opposed to presenting their views in public via standard diplomatic practices, foreign governments manipulate Israeli democracy through massive funding of an ideologically narrow spectrum of the Israeli political map.

European Union officials and recipient NGOs often claim that the EU-Israel Association Agreement mandates funding for human rights NGOs, and that the Israeli government has agreed in advance to it. This is a gross misrepresentation of the treaty, which focuses on fostering economic cooperation and political dialogue between the parties on a symmetrical basis. Nothing in this agreement legitimizes secret processes that provide funding for opposition groups with no democratic accountability.   Moreover, such funding, without consultation with the Israeli government could be interpreted as a violation of this agreement.

Which governments are primarily involved?
The major government funders to Israeli NGOs are the European Union and individual European states including Sweden, Norway, Denmark, the United Kingdom, Ireland, the Netherlands, Switzerland, Spain Finland, Belgium, and France.

Most of these governments fund Israeli NGOs both via multiple frameworks, including national ministries of foreign affairs and through EU-membership.

Additionally, many governments outsource foreign aid – including support for NGOs – to local and international humanitarian organizations that distribute funds within Israel. This means that Israeli NGOs often receive both direct and indirect funding from a given government. For example, funding from ICCO (Netherlands), Oxfam Novib (Netherlands), Diakonia (Sweden), DanChurchAid (Denmark), and Trocaire (Ireland) – to list a few – originates with foreign governments. 

Is it true that much of this European government funding for political NGOs in Israel is not transparent, in violation of basic democratic norms? 
Yes. While some governments, notably the UK, have increased transparency, and others provide substantive responses to NGO Monitor research requests, most of the decisions in this area violate transparency norms. There is little information on how funding decisions are made, and who makes them; project evaluations (if they exist) are not made public, and often the amounts and other details are tightly held secrets, and if released, are in a highly confusing and incoherent format. The lack of parliamentary oversight in most countries and the EU adds to the consequences of the secrecy.

Within Israel, many NGOs do not submit the requisite annual reports to the Registrar of Non-Profits (Rasham Amutot). This situation has persisted for years due to lax enforcement and limited consequences for violators.

In other instances, the funding decisions are secretly made by unknown individuals chosen by embassies in Tel Aviv, representative offices in Ramallah and other regional frameworks, using processes that are hidden from top officials and ministerial oversight.

Due to this secrecy, conflicts of interest and other violations of due process cannot be prevented or exposed.

How much money is involved?
Due to a lack of transparency on the part of European funders and Israeli NGOs, and major indirect funding via aid organizations, no accurate number is available. We know that over 27 million NIS annually is provided to Israeli political advocacy NGOs by foreign governments. (Additional foreign government funding goes to Palestinian and international NGOs active in delegitimization campaigns.)

Are these NGOs accurate in claiming Israeli human rights and legal violations?
Detailed analyses of claims made regarding the Second Lebanon War (2006), the Gaza conflict (2008-2009), and many other examples show that the NGO reports are often false, unverifiable, and biased. Similarly, NGOs distort and misrepresent international law in order to advance their activism against Israeli policies. As in the alleged “Jenin massacre” in 2002, or regarding Gaza civilian casualties, the facts are not known until after the NGO misinformation has already set the media and political agenda.

What is the NGO “halo effect”?
Statements made by self-proclaimed human rights NGOs are routinely accepted at face value by journalists, diplomats, academics, UN representatives, etc. Instead of viewing these political advocacy organizations as such, important audiences often perceive these NGOs to be morally objective arbiters. This “halo effect” provides immunity from scrutiny and criticism, and greatly increases NGO power.

Is the role of NGOs funded by foreign governments in Israel unique?
Both the amount of money given to NGOs and the quantity of these types of NGOs is not found elsewhere. Only Israel has dozens of NGOs operating under a façade of human rights whose credibility and impact are artificially amplified by massive foreign funding. There are no other cases where sovereign, democratic countries manipulate the internal political affairs and promote opposition policies in another sovereign, democratic country in this manner and to this extent. 

What can be done to offset the artificial influence of foreign-government funded NGOs in Israel and their role in political warfare?
Transparency and informed public debate, both in Europe and Israel, are vital. It is entirely appropriate for democratically elected representatives to introduce legislation that seeks to address this problematic funding. Committees debate the legislation, amendments are offered, and rigorous debates takes place – all reflecting a vibrant democratic system.

The ideas of financial transparency and the public’s right to know are tenets of any democracy, and keys to ending this artificial influence. Legislation requiring transparency, and consistent high-level diplomatic engagement with foreign governments regarding their NGO funding, are central.

To address the root of the problem, European governments must enforce transparency, facilitate informed public debate, and hold themselves accountable for their NGO funding.

On the proposed Knesset legislation

What do the proposed bills say?
Two different bills have been proposed and approved for further consideration by the Ministerial Legislative Committee: 

1. Proposed Bill for the amendment of the Income Tax Order (Taxation of public institutions that receive donations from a Foreign State Entity), 2011 (Fania Kirshenbaum – Israel Beiteinu): This bill sets a 45% taxation rate on income from foreign government donations. According to the text, groups that receive funding from the State of Israel will not be subject to this.

2. Proposed bill The “Amutot Law” [Non Profit Society] (Amendment – Banning Support by a Foreign State Entity), 2011 (Ofir Akunis and Tzipy Hotovely – Likud): Limits donations to “political non-profit societies” from governments and international bodies, such as the United Nations or the European Union, to 20,000 NIS annually.

For complete translations, see Appendix 2.

What does “political non-profit societies” mean?
This is the most problematic phrase in the proposed bill, as an objective definition is elusive and the body or individuals who are supposed to make the determination are not identified.

During the democratic process surrounding the NGO Transparency Law, this phrase was removed from the draft legislation.

Has Israel already banned all government funding for political NGOs?
No. The proposed bills are in the earliest stages of the legislative process. As demonstrated by the NGO Transparency Law and many other examples, a bill can change dramatically from its initial introduction until it finally becomes Israeli law, if in fact it does.

Moving forward, (1) the bill will be brought to the Knesset plenary for a preliminary reading. From there, (2) it is sent to the Constitution Law and Justice Committee, where it is debated and revised. Revisions are made in consultation with experts from the Ministry of Justice and the Attorney General’s office.

If the bill is not abandoned by the committee, (3) the bill is brought to the Knesset plenary for a first reading. It is then (4) returned to the committee for further revision. (5) The bill is brought back to the plenary for a second and third reading (sometimes on the same day).

Once a bill is approved and signed into the law, any individual or NGO can petition the High Court of Justice if he or she perceives that the law infringes on any rights or is contradictory to any of Israel’s Basic Laws. 

NGOs and officials of European governments involved in funding them have campaigned against all regulation proposals, condemning them as “anti-democratic” or “fascist.” Are these descriptions accurate? 
Multiple proposals that relate to Israeli NGOs and/or delegitimization campaigns have been discussed in the Knesset over the past three years, although most of them have not proceeded beyond the initial stages. Some have contained problematic components, and have been discarded through democratic processes, while others have focused on central democratic principles such as transparency.

Unfortunately, NGO officials who fear that they will lose their political power and influence have labeled all critics “McCarthyites,” and all attempts to increase transparency regarding their funding and activities as “anti-democratic.”

By blurring the lines between valuable contributions to democracy and truly problematic bills, and greatly over-exaggerating the faults in those proposals, NGOs muddy a very important public conversation taking place.

Experience has shown that, as in most liberal democracies, the robust Israeli legislative process serves as a corrective mechanism, ensuring a proper balance of democratic values and societal concerns.


Appendix 1: Foreign Government Funding for Israeli Political NGOs 2009/2010, partial list

This table was prepared using the latest publicly available documents, which were retrieved from Guidestar.org.il, the Israeli Registrar of Non-Profits, or on the NGO’s website.

Due to a lack of transparency in and discrepancies between reports by governments and NGOs, this table is incomplete and the numbers are approximate.

In some instances, the amount of government funding cannot be determined because the NGO does not file the necessary reports with the Israeli Registrar of Non-Profits.

NGO Direct government funding Indirect government funding Total government donations (in NIS) Percentage of total donations
Adalah EU; Switzerland; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via Oxfam Novib) Non-transparent  
Association for Civil Rights in Israel (ACRI) Germany; Spain; EU; Netherlands; Norway; UK; Netherlands; joint funds from Denmark, Sweden, Netherlands, Switzerland Sweden (via Diakonia); Netherlands (via Kerk in Actie) 1,480,469 (in 2009) 53%
Agenda EU   Non-transparent  
Alternative Information Center (AIC)   Sweden (via Diakonia); Netherlands (via ICCO); UK (via Christian Aid); Catalan (via Sodepau); Spanish (via Mundubat); Belgium (via Solidarite Socialiste) 1,701,935 (2009) 76.8%
Bimkom UK; Spain; Ireland; EU; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via Oxfam Novib) 1,305,675 (2009) 44.3%
Breaking the Silence Spain; EU; UK; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via ICCO); Sweden (via Diakonia); Ireland (via Trocaire); Denmark (via Dan Church Aid); UK (via Christian Aid) 1,983,472 (2010) 76.3%
B’Tselem Switzerland; Denmark; EU; Netherlands; Norway; Spain; UK; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via ICCO; Oxfam Novib); Sweden (via Diakonia); Denmark (via Dan Church Aid); Ireland (via Tocaire); UK (via Christian Aid); Germany (via EED) 5,388,869 (2009) 62%
Coalition of Women for Peace Switzerland; Netherlands; Germany Germany (via Rosa Luxemburg Stiftung); Netherlands (via ICCO) Non-transparent  
Galilee Society EU   381,920 (2009) 25.1%
Gisha Ireland; Netherlands; Norway, UK; EU; joint funds from Denmark, Sweden, Netherlands, Switzerland Ireland (via Trocaire) 1,430,747 (2010) 47.3%
HaMoked Canada; Spain; EU; Finland; France; Norway; Netherlands; joint funds from Denmark, Sweden, Netherlands, Switzerland Germany (via E.E.D.); Netherlands (via Oxfam Novib); Sweden (via Diakonia); Ireland (via Trocaire) 4,359,792 (2009) 65%
Ir Amim EU; Norway; Sweden; UK; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via Oxfam Novib) 2,771,001 (2009) 73.9%
Israeli Committee Against House Demolitions (ICAHD) Spain; EU; joint funds from Denmark, Sweden, Netherlands, Switzerland     Non-transparent
Ma’an Forum EU, USA   Non-transparent  
Machsom Watch EU   Non-transparent  
Mossawa EU Germany (via Friedrich Ebert Stiftung; Heinrich B?ll Stiftung); Sweden (via Diakonia); Netherlands (via Kerk in Actie) Non-transparent  
New Israel Fund (NIF) – Shatil Belgium; EU   Non-transparent  
Public Committee Against Torture in Israel (PCATI) Netherlands; Norway; Spain; Finland; joint funds from Denmark, Sweden, Netherlands, Switzerland Netherlands (via ICCO; Cordaid) 670,503 (2010) 28.3%
Physicians for Human Rights- Israel (PHR-I) Spain; France; Netherlands; EU; Japan; joint funds from Denmark, Sweden, Netherlands, Switzerland Sweden (via Diakonia); UK (via Christian Aid); Germany (via EED; Medico International); Switzerland (via Medico Schweiz) 2,590,000 (2010) 53%
Rabbis for Human Rights Spain; EU; joint funds from Denmark, Sweden, Netherlands, Switzerland   212,860 (2009) 6%
Sikkuy EU   97,775 (2009) 5.6%
Women Against Violence EU   Non-transparent  

Yesh Din
Belgium; EU; Norway; Netherlands; Ireland; UK; Germany; joint funds Netherlands (via Oxfam Novib) 3,132,088 (2009) 72.4%

Appendix 2: Translation of proposed bills (translations by NGO Monitor)

Proposed bill The “Amutot Law” [Non Profit Society] (Amendment – Banning Support by a Foreign State Entity), 2011
Unofficial Translation

Amendment to article 36a 1. In “Amutot Law”- (Law of Associations-ed)- 1980, in article 36a
    (1)    In subparagraph (a), the definition "Foreign State Entity " shall be followed by
    ""A Non Profit Political Society" - a non profit Society [Amuta] whose goals include an attempt to impact the State of Israel's political and security agenda, or one that, holds activities of political nature within the society’s frameworks;";
    (2)    Subparagraph (a) shall be followed by:
    “(a1) a political non profit society will not receive annually a donation that exceeds 20,000 NIS from a foreign state entity.”;
    (3)    In subparagraph (b1), after “ non profit society” will come “that is not a political non profit society”.

Explanation

This proposed bill is meant to ban non-profit societies in Israel from receiving donations from governments and international bodies such as the United Nations or the European Union.  In light of the inflammatory activities of many organizations that operate under the guise of “human rights organizations” and intend to impact the political discourse, nature, and policy of the State of Israel.
It is intolerable that the State of Israel should freely and publicly allow foreign states to intervene in its domestic affairs. This amendment does not intend to harm social or other associations, it is meant to prevent foreign states from intervening in Israeli politics by means of supporting non profit associations of a political nature, and to put an end to the intervention of foreign elements in determining the future and nature of the State of Israel and those who reside in it.

Proposed Bill for the amendment of the Income Tax Order (Taxation of public institutions that receive donations from a Foreign State Entity), 2011
Unofficial Translation

Amendment to Article 3 1. In Article 3 of the Income Tax Order (hereinafter - the Order), Subsection (10) shall be followed by:
    "(11) Income of a public institution, except a supported institution, which is a donation from a foreign state entity, will be subject to a 45% taxation rate;" in this subparagraph –
    “a supported body” – as defined in the” Budget Foundation Law 1985;”
    “Foreign  state entity” – as defined in Article 36a of the Amutot Law [Law of Non Profit Societies – ed.], 1980.”
    Amendment to Article 9    2.    In Article 9(2) of the Order, subparagraph (a), the words  "a group of people  in whose control those who operate the business" shall be followed by "except for an income that is a donation from a foreign body, as stated in Section 3,".

Explanation

In Israel, organizations operate that have made it their objective to condemn the State of Israel in the eyes of the world and to hound IDF officers and soldiers while harming their reputation. These organizations, which often refer to themselves as “human rights organizations,” are funded by states and other vague sources whose sole intention is to harm and alter Israel's political discourse from within.

As part of these organizations activities, we may refer to the major contribution they made to the findings of the Goldstone report, a report issued by the UN that criticized the IDF conduct during Operation Cast Lead; taking part in the filing of indictments against senior Israeli officials and army officers around the world; attempts to brand IDF soldiers as war criminals, encouraging refusal to military service, and calling for economic and political boycotts against the State of Israel.

Some of the data freely available on the funding of these organizations reveals that they are funded by governments or Governmental authorities of the EU – Britain, Switzerland, Norway, Spain, Germany, and Ireland.

These are foreign states that intervene in Israel’s domestic political discourse in order to delegitimize the IDF's activities and soldiers. Foreign money pays for the activities of Israeli organizations against the IDF.

This bill seeks to deny these organizations the right given to them in Israel to receive a tax exemption, and setting a 45% taxation rate on their income from donations. It is also suggested that organizations that receive funding from the State of Israel not be subject to this bill, so as to preserve the tax exemptions provided for organizations working to advance Israeli society in areas such as welfare and education.