The relations between Israel and the the world's Jews, especially those in the United States, have always been fraught with hypocrisy. While everyone has been careful to pay lip service to Israeli democracy and its citizens' exclusive right to determine their fate, Jewish tycoons have known how to translate the millions they donate into influence and esteem.

The state, which managed to absorb millions of Jews and build a flourishing economy, continued its small-town mentality of kowtowing to the masters from overseas. The national institutions set up to prepare the future state's infrastructure - the Jewish Agency, Jewish National Fund, United Israel Appeal and World Zionist Organization - continued to be run as a hub of Israeli political interests combined with trips abroad to flatter philanthropists.

All Zionist parties are to blame for the present situation. They ceded control of national institutions to political interests and second or third-rate politicians who couldn't get elected to parliament.

A serious and open debate on the necessity and role of these bodies is long overdue. Why do we need an inflated, discriminatory organization like the JNF while forestry, environmental development and managing state lands should be the government's responsibility?

The Jewish Agency has succeeded in renovating itself in recent years by streamlining and focusing on domestic social projects, Jewish education in the Diaspora and fostering an affinity to Israel not merely for aliyah. But the JA will not be able to find a new purpose as long as it is dominated by narrow political interests and the whims of Jewish millionaires abroad.

The threat by a group of prominent donors to halt funds unless the Jewish Agency cuts itself off from the WZO - a blatant and patronizing demand as it may be - could accelerate a very necessary debate. The donors reflect the growing tendency among the large contributors to focus on visible results rather than perks.

When donors funnel millions to the United Jewish Communities, and on to the Jewish Agency, it helps them to rub elbows with the state's leaders. However, many are aware that to make any real difference, they must donate to independent groups like Taglit-birthright or Nefesh B'Nefesh. These are the ones who run the focused projects with Zionist goals.

In a way they are resorting to the methods of the great philanthropists Moshe Montefiori and Baron de Rothschild. Instead of sending money that would have barely sufficed for the Jews here to lead a meager existence, they came here and set up factories to enable independent community life. The difference is that while those two came to a wasteland, Israel today is a sovereign state.

The attempt to create an open, creative Jewish world modeled after Jerusalem and Babylon - activity centers that fertilize each other - will not work as long as the ties between Israel and the Diaspora are fixed in redundant obsolete patterns.