The undemocratic thing is allowing foreign special interest groups or governments to use their money to increase the political clout of a politically activist group in Israel so they can try and influence government decision making. Yes some legitimate charities will suffer as a result of this but they are casualties in a war against undemocratic foreign political intervention in Israeli politics. Even if these legitimate charities do lose out I don't see how that is undermining democracy, it just means the government is allowing charities to raise from certain foreign sources which has nothing to do with democracy. In America they have the Foreign Agents Registration Act which does the same thing as this new bill does only its even tougher but when was the last time anybody accused the US of wanting to undermine democracy through laws like that? If the US can have laws on the generation of money from foreign sources and its not making America an undemocratic place why should Israel be undemocratic if it had its own version of this law?
U.S. confirms ISIS computer expert killed in air strike (Reuters)
from the article: Netanyahu's 'draconian laws' are attack on Israeli democracy, say MKs