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The Jewish Agency is planning to close one of its most historically important branches, the Immigration and Absorption Department, as part of a radical restructuring plan, Agency sources said Wednesday.

The plan, which Agency officials consider to be a major change in the identity of the organization that predates the creation of Israel and has existed in its current form since 1948, will introduce reforms aimed at addressing a series of financial and political blows that have plagued the organization in recent years.

"The Agency has been taking punches from every direction in recent years; politically, organizationally and [in terms of] its image," a senior Agency official said. Donations made by individuals in the U.S. Jewish community, which account for two-thirds of the Agency's annual budget, have been in steady decline in recent years. Many philanthropists have opted to give their money to private groups like Taglit-Birthright Israel, which organizes free tours of Israel for Jewish young adults, or Nefesh B'Nefesh, which focuses solely on "revitalizing" immigration.

Others have stopped giving money to the Jewish Agency because they disapprove of politicization within the organization, or because they hold varying opinions regarding what its main mission should be. Some donors, responding to the trickle of Jewish immigration to Israel from the West, and the fact that bulk of of Jews from less developed countries, such as the former Soviet Union, have already emigrated, have urged the organization to focus instead on educational issues rather than aliyah. In a confidential memo sent about a half year ago from the UJA Federation of New York, leaders of the Federation, which constitute the largest single group of donors to the Jewish Agency in the U.S., demanded that the Agency concentrate solely on Jewish education. The memo argued that deciding whether or not to immigrate to Israel is a matter of personal choice. The recent drop in the dollar's exchange rate has also contributed to the Agency's shrinking budget.

Efforts to find alternative sources funding have not succeeded. A $50 million donation from Russian-born Israeli billionaire Arcadi Gaydamak fell through, just as another pledge, valued at $45 million, from the Evangelical International Fellowship of Christians and Jews, is in peril. As a consequence, the Jewish Agency's board of governors is expected to announce cuts exceeding $20 million to $300-million budget.

"The new plan can either give it a new identity, or signal the end of the road. In any case, we have no choice," a Jewish Agency official said.

Four teams are currently drawing up the reform plan at the behest of the Agency's chair, Zeev Bielski. The JA is currently divided into three departments: Immigration and Absorption, which sends out the emissaries who work with Jewish communities around the world; Jewish Zionist Education, which runs several programs at Jewish schools and community centers around the world, and Partnerships with Israel, which is responsible for social-welfare programs in Israel, particularly in the Galilee and Negev. According to the committees' drafts, two new departments will be formed, one to oversee activities within, and the other with responsibility for those overseas. Areas currently under the control of the Immigration and Absorption Department will be split between the two, as well as other sections of the agency. Immigration and Absorption's Global Center, for example, which runs the agency Web sites, a call center and electronic communications with emissaries abroad, will be subjugated to the director-general's office.

Emissaries dealing with immigration from abroad will not be cut immediately, but their number will be reduced over time. Their responsibilities will be delegated to education emissaries, who will be given instruction in how to encourage immigration. Only a small number of emissaries dedicated exclusively to aliyah will remain. They will be given a broad scope of activity, with resonsibility for entire continents, rather than being assigned to a certain country or city, as they are now.

Another option being examined for the reorganization is the setting up of separate companies under Agency control to carry out various activities. Yet some senior Jewish Agency officials warn that relinquishing its mission to encourage aliyah will undermine the organization's raison d'etre.

Director-General Moshe Vigdor told Haaretz: "Moving to a framework of two departments is being discussed as part of the new planning process but it is only one of the options. Whatever we decide to do, encouraging aliyah will remain one of our central activities."

"The Jewish Agency is a dynamic and self-renewing organization," a spokesperson for the organization said. "Recently, staff have been drawing up an extensive plan to examine ways of making its activities more efficient and to provide solutions for the budgetary gaps caused by the dollar's exchange-rate drop and world financial developments. We have no intention of reducing our activity to boost aliyah; on the contrary, the Jewish Agency will act to increase those activities."