In mid-October of this year, Israel’s Registrar of Charities issued “10 Golden Rules for Donors” (Hebrew).  While the document is meant as a guideline for  individuals, it holds immense value for the Israel’s charities, as well.

Here’s why:

Governments equate the tax-deductible rebate on donations to a donation by the government (via the tax authority) to the nonprofit sector as a whole.  In essence, the government views itself as a donor.  Israeli Charities, or amutot, can be sure that Israel’s Rasham Ha’amutot (Registrar of Charities), as an extension of the government, will be heeding its own advice when it vets charities for compliance.

Below are The 10 Golden Rules (in English) and its implications for nonprofits operating in Israel.  

THE 10 GOLDEN RULES FOR DONORS

1) Check the status of the amutah

“Visit the Rasham‘s site (Hebrew) to see if the charity actually exists and it’s current status (current, erased, or in the process of involvement).”

Charities:

The above site lists the charity’s name, status, registered address, and status of Nihul Takin for current and upcoming year. The site also allows people to search by name.

So…

Check the page from time to time to ensure that what appears is accurate; what you see, the donors see.  This is otherwise known as Reputation Management 101.  (More about this in rule #3.)

Additionally, it is advisable to test-search your organization by inputting its partial name or nickname.  This is a great way to observe the competition or help choose a unique name when registering your charity.

2) Confirm that the charity has a Nihul Takin [Certificate of Proper Management]

“The Nihul Takin is a certification issued by the Rasham every year to charities that fulfill the reporting requirements as dictated by the Registrar. Please note that in years when a charity was audited by the Registrar, the Nihul Takin is also a good judge that the organization’s activities are sound. As this is not the case in most years, donors are recommended to carry out their own investigations.”

Charities:

Withholding an organization’s Nihul Takin status is the Registrar’s most powerful and effective tool in its arsenal.   Organizations seeking a government grant or contract must have this status.  Additionally, many foreign funders will also only give to nonprofits that have a Nihul Takin.  (See previous post, Defining an Amutah.)

In simpler terms, having a Nihul Takin lets donors know that an objective third party — in this case  the Registrar and/or its sub-contractors — has reviewed a nonprofit’s activities.

Furthermore, the above website lists the date that the Nihul Takin was granted, meaning that viewers will know if an organization submitted their forms on time or were delinquent.

It is important to note that only charities that have two years of financial reports are eligible for the Nihul Takin.  The above site, however, will not list “not eligible” rather “none.”  Young organizations should proactively warn their constituents so current and potential donors aren’t left wondering why “their” organization is lacking this important certificate.

3) Check the charity on the site Guidestar Israel

“Guidestar Israel contains information from the Rasham [official] and other sources [less official]. The site contains financial and narrative reports, certifications, summaries of activities, and other relevant information on a charity.”

Charities

Moving onto Reputation Management 201.

Has your organization verified that the material listed on Guidestar Israel is accurate and up-to-date?  Organizations can obtain a login password to update and supplement the material that appears on the Guidestar site, including adding text in English.

It is also possible to upload a link to a fundraising site so that impressed individuals can donate directly from Guidestar.  Has your organization availed itself of this function?

Has your organization uploaded its logo for brand recognition?

4) Ask the amutah for details about the purpose and destination of your donation

“Do not hesitate to ask the receiving charity for details or for documentation regarding the intended purpose of the donation. Some of this information can be found in the yearly Narritive Report that the charity submits to the Registrar or in the Board protocols [meeting minutes] pertaining to the charity’s goals for that year.”

Charity:

Does your organization make it easy for donors to navigate its website?  Perhaps, creating a unique “landing” page for the specific drive; don’t make it hard for your donors to find the answers to the questions you know they are asking.

In general, what was considered good practice a few years ago is now the norm. Organizations should expect that would-be funders will conduct their own investigations and act accordingly.

5) When receiving a request for a donation by telephone, clarify before giving

“In the case of receiving a request by telephone, you can certainly ask the caller to either wait or to call back later so that you can properly check the request via the organization’s website or other  means.”

Charities:

Continuing on the previous point: Has your organization equipped its telephone staff with the proper background information to make the ask seem legitimate and answer basic questions?

6) Avoid donating to temporary kupot tzedekah [donation boxes or pushkas]

“It is best to avoid putting donations in these boxes, unless it is in a permanent location or well kept and connected to a organization you know well. Donation boxes are likely targets for theft or fraud. Regardless of familiarity with a particular organization or donation-box locale, it is best never to give large gifts via these pushkas.”

Charities:

The Registrar is essentially telling donors that those nonprofits that have temporary collection plates are not as careful with their funds — or else they wouldn’t collect money in ways susceptible to theft or fraud!

After all, these boxes are not monitored 24/7.  Certainly in today’s day and age, organizations can think of more efficient and safer ways to collect funds.

7) Request a receipt from the recipient for your donation

“A receipt is an essential tool for internal and external monitoring of the integrity of the organization. By law, a charity must offer a receipt for any donation. The receipt should minimally include the name of the amutah, the amutah’s registration number, and amount of the donation.”

Charities:

This is really ABCs of Israel charity management. If your organization isn’t providing receipts for every type of donation, I strongly suggest the manageent of the charity read the Nihul Takin, Israel’s guide for proper management of nonprofits. [Click for Hebrew & English versions of the Nihul Takin.]

8) Plan your donations

“If you donate regularly, once a year, at least, you should plan out your donations. This planning should include the total amount you plan on donation for the upcoming year, including the purposes of said donations so you can come to an informed decision on where you might want to give. If you have personal information about the activities of a favorite charity, or you were and have been pleasantly impressed by this nonprofit’s activities, there is preference for a contribution to this organization after the aforementioned tests have been executed.”

Charities:

Listen up and listen well: Nonprofits that help their donors create such a plan — even one that includes donations to other charities — are providing a much-needed service and proving added value.  Such an organization is engaging and connecting to its donors in a much more intrinsic and personal manner than by simply receiving a check.  This type organization will be remembered by the donor for a long time to come.

On a more basic level, this is why a nonprofit organization must invest in its branding. Does your charity clearly state its goal and how it plans to accomplish said goals? Do you make it easy for donors to understand how you fit into the social-service stratosphere?  Has your organization focused on causation to prove it is worthiness?

9) When necessary, view the charity’s file at the Registrar or request a copy of it on CD

“When necessary you can request to view an organization’s file at the office of the Registrar or to request a CD copy to be mailed to you, for a fee.”

Charities:

There is always a paper-trail.  Almost everything filed is available.  The exceptions are  documents or sections-of-documents that relate to board members or staff on a personal level.  Nuff said.

10) Report an organization’s improper or illegal activity

“If you notice something that seems wrong or illegal about the organization, please contact the offices of the Registrar of Charities by email at: RashamA@justice.gov.il. It is important to note that public inquiries are an integral ingredient used by the Rasham Ha’amutot to monitor the conduct of nonprofits and, thus, to ensure that donations are used for their intended purposes.”

Charities:

Scoff at constituents at your own risk.  Moreover, recent scandals have shown that wrongdoing was first noticed by Friends Of charities, those tasked with financially supporting the organization!

The above point includes staff, as well.  A recent lecture quoted an international report that the primary source of fraud detection in charities are internal tips.

To quote popular culture: you can run but you can’t hide.

I join Israel’s Registrar of Charities in wishing that a smarter donor and a more transparent sector will hopefully lead to greater participation and support of Israel’s charities.

What do you think: Good Rules to Live By or Too Oppressive?

Tizku Lemitzvot,

Shuey

Disclaimer:  This blog houses my personal opinions and is for informational purposes only — not advice. As charity laws can be quite complex and ever-changing, please refer all questions to qualified and licensed professionals. Read the full disclaimer.

Photo: Courtesy of Timo Studios (Flickr)

The word fashla is Hebrew colloquial for “screw-up”. And yes, even your accountant, an Israeli charity’s best friend, can make a few.

As a banker I see this particular slip-up more often than you think. Here are two ways to avoid your accountant inadvertently putting your organization’s bank account in the red. 

PRELUDE

In Israel, the accountant fulfills a crucial role for the amutah [Israeli Charity].

It is your accountant who will point out pitfalls to avoid and best-practices to follow. Assuming you follow your accountant’s advice, s/he will defend your tax-deductible status from less-than-cooperative regulatory bodies. Additionally, many accounting firms also offer bookkeeping services, making them a one-stop-shop for all a charity’s needs.

For these reasons and more, many nonprofits in Israel will leave with their accountant a signed check book so that the s/he can pay relevant bills without having to “bother” the nonprofit.

While efficient in theory — and assuming that an organization is aware of the risks and has obtained the agreement of all relevant stakeholders — there needs to be some ground rules before deciding to put this plan into action.

1. NOTIFY THE NONPROFIT BEFORE ANY PAYMENT

Generally, the accountant’s checkbook is used for payments to Mas Hachnasah [Tax Authority] and/or Bituach Leumi [National Insurance - think Social Security], payments that potentially differ each month and whose computations are done by the accountant. The idea is to take out the middle man — the organization — and just have the accountant pay the relevant government bodies directly. Like I said, efficient.

It can happen that a nonprofit will forget to incorporate the accountant’s checkbook into its cashflow management. The age old saying of “Out of sight, out of mind” comes to mind (no pun intended) when thinking of this scenario.

Letting an organization know of any upcoming payments can avoid these “unexpected” withdrawals. Government payments, in particular, are generally not a last-minute item and can be planned in advance. It probably isn’t a bad idea to have a working agreement regarding minimum “notify” times.

2. TO THINE OWN SELF BE TRUE

The other instance where accountants tend to write their own check is when they…[wait for it]…pay themselves.

Yep.

Similar to the government agencies above, monthly payments to the accountant are not always the same. Additionally, there is the added benefit of convenience for the accountant; after all, the checks are already signed and sitting in his office.

This scenario mimics the first in terms of “Out of sight, out of mind” but has the additional element of Conflict of Interest.

While I wouldn’t say that an accountant who writes him or herself a check without first notifying the client has immediately crossed any red lines, it might be indicative that this s/he isn’t a stickler for details — and a propensity for details is severely required by an accountant.

In addition to a general Conflict of Interest policy for the nonprofit, there should be an prearranged agreement of which beneficiaries will be paid from the accountant’s checkbook and which will be paid from the organization’s checkbook.

CONCLUSION

The ultimate fiscal responsibility lies with the organization. At the same time, accountants are too important to Israeli charities for there to be doubts or misgivings.

The relationship between accountant/bookkeeper and nonprofit organization is as much about expertise as it is about personalities. If these fashlas happen more than just a few times it might be a sign that this accountant is not a good match for the organization (or vice versa).

Tizku Lemitzvot,

Shuey

Disclaimer:  This blog houses my personal opinions and is for informational purposes only — not advice. As charity laws can be quite complex and ever-changing, please refer all questions to qualified and licensed professionals. Read the full disclaimer.

Photo Credit: “Empty Pockets” by Dan Moyle (Flickr)

On August 2nd, the Jerusalem Web Professionals (JWP) hosted a lecture by appSTUDIO entitled, “Making Your Website Mobile in 2011.”  The lecture was rich in theory, strategy, and practical information for the designer and layman, alike.

The trends are clear: both current and potential donors are increasingly looking at the internet from their mobile devices.

• A recent report states that 25% of Americans say their doing most of the internet surfing on their mobile phones instead of a computer.
• Another poll shows that nearly 50% of mobile web users are unlikely to return to a website that they had trouble accessing from their phone & 57% are unlikely to recommend the site.

With the above in mind, at the event I interviewed some of the consultants there to hear the concerns of their nonprofit clients, as well as, the experts from appSTUDIO to learn the 5 questions every nonprofit should ask when considering a Mobile App:

1. What’s better for nonprofits: mobile site or App?
2. How should a nonprofit properly use an App?
3. How can a nonprofit receive donations through an App?
4. How much does developing an App cost?
5. What prep-work should a nonprofit do before approaching an App developer?

Problems viewing the embedded video? Click here to see it on YouTube.

Image courtesy of Little_Karen.

I recently read an article that argued that the “fundraising process itself, in particular, donor relationship building, is program building, and not just the means to an ends.”

This got me thinking that there are other activities besides fundraising that are insufficiently explored by us nonprofit professionals.

We so often get caught up in the final destination — completing a capital campaign, obtaining a top 4-star rating from Charity Navigator, or reaching 1,000 followers on Facebook — that we fail to take notice of the journey it takes to get there.  Unfortunately, this lack of awareness prevents us from learning how the processes of fundraising, measurement, and technology-implementation can create a more effective organization.

Two quick comments: (1) While I generally write TO my audience, as a fellow guilty party I thought I would address this piece to the WE and come along for the ride. (2) I decided that the best way to develop this idea would be in three parts. Fundraising is below, with Measurement and Technology to follow.

FUNDRAISING AS A JOURNEY…

…to strengthen programs

The journey of fundraising can teach us how to create more effective programs, achieving greater impact. In the above article that inspired this piece, Gayle Gifford details seven ways that speaking to constituents and potential donors strengthening programs, thereby, helping accomplish this goal.  Some of the measures she mentions, include: getting feedback; seeing results from the field; confronting the quality and design of programs; and continuously testing the organization’s relevance.  Yes, the natural by-product of these actions is that a charity is better equipped to raise money in the future.  But more importantly, this process will help us increase the impact of our work, the true measure of a successful nonprofit.

…to friendraise

Along the path that leads to raising funds is the potentially greater opportunity of finding friends. Hildy Gottlieb argues that friends “share all their gifts with the organization…and yes, quite often, it is even money. But it is usually far more.” She is very careful to note that Friendraising (as she terms it) is not just another word for “relationship building.”  Traditional “relationships” still ask for money, just maybe not right away. In contrast, proper Friendraising leads to: the sharing of ownership; an engaged community; effective leadership and governance; more educated decisions at the board table; and, most importantly, a shifting of the focus from the scarce resource of money to the abundant strengths that everyone brings to the table.  And in today’s world, charities need be able to pull from a variety of disciplines to maximize its impact.

…to educate donors

Too often we are so focused on getting the check that we fail to educate our donors about the intricacies of giving and our organizations’ needs. Dan Palotta begs organizations to “stop giving donors what you think they want.”  Too often, he claims, in order to get the gift, nonprofits “dedicate the whole of their organization to telling them [donors] what they want to hear.”  Instead, organizations need to show courage and tell donors the truth.   After all, donors “cannot and should not be expected to have the same level of sophistication” about giving as people who dedicate their lives to the profession.

In one survey cited, 79% of donors said they wanted to know what percentage of their money went to the cause, while only 6% said they wanted to know if their donation made a difference.  (The latter, of course, being the crucial measuring stick.)  Palotta asserts that these strewed numbers are a result of donors who are suffering from “erroneous teachings” brought on by the sector’s thirst for capital.  By shifting the focus back to the process, we can educate donors how to give effectively and understand the complex needs our of charities.

…to remain relevant

Looking only at the donation, the end result, places the focus on the charity instead of the donor.  The number one way to remain relevant, however, is to concentrate on the real reasons why a donor chooses to help. Among the list of reasons, Jeff Brooks includes: personal significance; spiritual strength; assuaging guilt; comforting fear; proving that they are good people; feeling good; or for tax-deduction purposes.  Keeping this in mind allows the nonprofit to fundraise for what it needs while simultaneously appealing to what the donor needs.

Steve Yastrow once said that even the most dedicated of donors will only think about their favorite charity up to 10% of the day, while thinking about themselves over 90% of the day.  If a donor’s favorite charity can successfully have that individual donor associate himself completely with the brand, then the supporter will, essentially, be thinking about the charity EVERY time he thinks about him or herself — over 90% of the time. This is true relevance.

Note that all of these points are not contingent upon actually reaching a charity’s campaign goals (though that would be certainly be nice); thus, making the success or failure to achieve these fiscal objectives, ultimately, of second importance.

Up next:
Part Two – Measurement as a Journey
Part Three – Technology as a Journey

Tizku Lemitzvot,

Shuey

Photo Credit: “Hiking” by Luke Wisley

Once again, the Israeli nonprofit organization Magan David Adom (MDA) and it’s American supporting charity, American Friends of Magen David Adom (AFMDA), are in the news after all five members of AFMDA’s executive board resigned, stating that they “refuse to abdicate or compromise in any way our fiduciary duty to AFMDA and its donors.”

Second, which side is right or wrong is of secondary importance.  Regardless how the situation plays out in the near or distant future, organizations can learn RIGHT NOW from the very public debates raging between the American and Israeli arms.

Specifically, the core issues — defining roles, trust, and independence — are the same faced by all international organizations, and, as such, can provide a constructive case-study for nonprofits, their board members, and their donors.

(While I generally refrain from talking about specific groups so as to avoid accidentally tarnishing an organization’s reputation, in this case, after articles in the Forward, The Jewish Week and eJewish Philanthropy, I think it’s safe to say that the cat is out of the bag.)

1. DEFINING ROLES

The resigning board members argue that Israel’s MDA views AFMDA as purely a fundraising arm. – Forward

Let’s be very clear: establishing a “Friends of” Charity is not just about creating a PO Box in the United States. Rather, a “Friends of” Organization is about finding like-minded individuals that share a similar passion for a charity’s mission and believe that Charity X is the best way to address this particular issue.

Said somewhat differently, creating a supporting charity abroad is about empowering individuals outside of the organizational framework and arming them with the appropriate tools so they can promote your cause; hopefully, raising a heck-of-a-lot of money in the process.

The relationship a foreign charity has with its American Friends is similar to the relationship any nonprofit has with its Board Members.  This point is addressed most excellently in an articleby Hildy Gottlieb. The following short excerpt doesn’t do it justice:

Board Members and FriendRaising:

The point of engaging the community (which is really what FriendRaising is all about) is an engaged community…Friends will not let anything bad happen to your work. They will help in ways you never dreamed possible. They will want to see good things happen, and will work like the devil to be sure nothing bad happens.

Friends share all their gifts with the organization, and are thrilled that the organization sees value in those gifts! They give what they have, whatever that is – and yes, quite often, it is even money. But it is not only money. It is usually far more.

The only road to sustainability is to engage the community in your work, to turn that community into an army of friends achieving something amazing together, spreading the roots of ownership of your mission and vision throughout the community, so the community would not dream of letting that mission die.

When two sides do not agree on their particular roles there will undoubtedly be tension. It is best to address these issues early on so as to avoid them becoming a much larger issue in the future.

2. TRUST

The Israeli group has argued that AFMDA is holding a huge cache of money that donors believe is going directly and immediately to Israel, while in actuality is it waiting — at times, for years — for approval by the American body…Another factor contributing to the mistrust that some AFMDA officials harbored toward their Israeli counterparts is an ongoing criminal investigation in Israel against the CEO of MDA. – Forward

And, of course, a cornerstone for a good friendship is trust.  And the trust should flow in two directions:

• The American Friends should trust that the beneficiary (a.k.a. the foreign charity) is using the money wisely and responsibly to forward the common mission in the best way possible.
• The Foreign Charity should trust that its American Friends are supporting it — especially monetarily — in the best way possible.  This means that the foreign nonprofit trusts the methods used by the American charity to fundraise, hire staff, and publicize/market the organization etc.

If either of these trusts breakdown, a situation like what MDA is experiencing now is the inevitable result.

3. INDEPENDENCE (AND COMPLIANCE)

But on January 19, all five members of AFMDA’s executive committee resigned, warning that the renewed partnership could come at the heavy price of lost independence and possible abdication of the American group’s legal responsibilities as a charity certified in the United States. - Forward

…The leadership of Magen David Adom (MDA), and some of the members of AFMDA’s Board of Directors, do not appear to share our commitment to our roles as responsible and independent fiduciaries, exercising sound judgment in full compliance with the letter and spirit of American laws and donor expectations. – eJewishPhilanthropy

An American nonprofit’s need to be independent stems primarily from the I.R.S..

As such, foreign organizations looking to establish an American Friends of Organization in the States need to understand that the American charity must demonstrate control and financial accountability. If the U.S. nonprofit is thought to be a simple puppet of the foreign organization, the I.R.S. can remove tax-exempt status and/or levy fines.

Two key points from a previous post exemplify the level of control the U.S. Government is expecting:

• Grants should be reduced to a written agreement signed by both the charity and the grantee. In addition to requiring periodic reports, charities should perform routine, on-site audits of grantees.
• The I.R.S. insists that charities must demonstrate that it exercised an independent decision about the use of its donations and that the funds sent abroad further the charities’ own purposes.

It is important to note that the due diligence done by a “Friends Of” is not a reflection of distrust as mentioned above, rather its inherent responsibility to the government scrutinizing the charity and to its donors.

A foreign nonprofit looking to establish a “Friends of” charity in America must realize that it is not opening a branch or satellite, rather a separate entity.  If the parent organization cannot appreciate this distinction, a “Friends of” Organization  might not be the best solution for the charity; there are, after all, other types of entities that can help transfer donations abroad.

IN CONCLUSION

Let us not be naive and think that Magen David Adom is the only organization to have problems of control, independence, and fiduciary responsibility. Just the opposite, many international nonprofits have similar issues but will continue to avoid addressing them because they are “fortunate” enough not to be in the limelight. (And this, by the way, is the real danger, though, not the subject of this post.)

As I mentioned above, this piece isn’t about blame or deciding which side is right. As far as I’m concerned, both sides — and especially the charity’s beneficiaries — come out behind.

I heard Martin Brookes, CEO of New Philanthropy Capital in the UK, explain at a recent conference that he can only offer people the lessons he’s learned from the mistakes he has made.  It is my sincere hope — and perhaps the only silver lining in this whole mess — that other organizations take note of MDA’s recent struggles and learn from them.  (From my mouth to God’s ears.)

Tizku Lemitzvot,

Shuey

Disclaimer: This blog houses my personal opinions and is for informational purposes only — not advice. As charity laws can be quite complex, please refer all questions to qualified and licensed professionals. Read the full disclaimer.

The fiscal responsibilities of an American charity have become more complicated in recent years. Increased scrutiny from the IRS, more intricate tax documentation, the recent economic crisis, and donors’ need for transparency, are just a few of the challenges facing the sector. When a charity operates internationally these difficulties are only exacerbated. These global organizations are expected to be familiar with regional and global charity regulations, comfortable working in foreign languages and cultures, able to cope with inherent increased expenses, and capable of forging new relationships – all while maintaining a high level of accountability.

A powerful tool in helping a “Friends of” organization cope is an additional account abroad in the country in which it operates. When used to its potential, this kind of account is invaluable.

(For this purposes of this article, I’ll be using Israel as my example, as American fiscal support for Israel is wide-spread and well documented.)

The Benefits of Maintaining an Account in Israel

1. Deposit Checks in Israel

Checks designated for the U.S. charity that are received in Israel can be deposited locally. Because the account in Israel is owned by the American charitable organization any check deposited in the account can receive an IRS tax-deductible receipt. Donors can write the check while the feeling is hot, as opposed to waiting until they return back home to the United States. The organization can save: (1) money by not using postal or delivery companies; (2) time as checks can be deposited immediately in the Israel account, and; (3) hassle as there is no need to hold on to checks to mail them in bulk, photocopy and catalog mailed checks, worry about lost mail, etc.

2. Wire Monies to Israel when Convenient for the U.S. Charity

Similarly, because the account is owned by the American entity, money sitting in the account in Israel still shows in the American organization’s books. This allows the nonprofit to transfer funds according to their own schedule and not just when Israel charities need support. With this flexibility, the U.S. nonprofit can cut costs by transferring funds in bulk and increase feelings of control, while at the same time reducing the hassles of constantly operating on someone else’s timetable.

3. Transfer Funds Immediately to Israeli Nonprofits

As money can, theoretically, already be in the U.S. charity’s account in Israel, when support is approved, money (converted and) transferred the same day. No longer are groups on both sides of the ocean dependent on anonymous, ambiguous banks to make sure that money is transferred in a timely manner.

4. U.S. Nonprofit’s Israel Account can Act as Collateral

Should an Israeli organization connected to or supported by the U.S. charity need credit – whether in the form or a loan or line of credit – the American account can act as collateral. This allows money that the “Friends of” organization prefers stay under its ownership do so while still providing the necessary credit to a worthy Israeli nonprofit. (ex: This can prevent the undesirable situation when an American organization would have to “loan” funds.)

5. Pay Expenses Directly from Israel

Any type of expense can be paid locally – whether flights, hotels, or travel expenses – from the “Friends of” account in Israel. This allows for payment in local currency (i.e. shekel), as opposed to dollar, which can be cheaper both in terms of actual cost and associated fees. Additionally, an account abroad provides a variety of payment options to the American charity; such as check, wire transfer or credit card. Furthermore, the American entity can opt to pay for certain expenses directly instead of the Israeli recipients to minimize Israeli tax or charity regulatory complications that might occasionally surface.

6. Greater Oversight in the Eyes of the IRS

While the United States Government acknowledges the need for international charity, it is concerned that US based nonprofits might not exercise adequate control over its funds or be subservient to foreign organizations. Maintaining an account overseas where the American entity operates – providing that the Foundation and the Keren avoid overlaps in its board membership and authorized account signatories, among other things – is a hands-on management approach that demonstrates to the IRS a high level of budgetary control and transparency.

Closing Words…

Please note that, as said before, an account managed in Israel by the American tax-exempt organization is still considered under the ownership of the “Friends of” charity and should be treated as such. Additionally, many of the tips raised in this article are not simply about banking and require the consultation of a charity’s Board of Director and its accountant/lawyer.

Tizku Lemitzvot,

Shuey

Disclaimer: This blog houses my personal opinions and is for informational purposes only — not advice. As charity laws can be quite complex, please refer all questions to qualified and licensed professional. Read the full disclaimer.