Jewish National Fund Agrees to Give Israel $287 Million a Year in 2018 and 2019

The funds will be used to fund Israel's development and infrastructure needs, such as highways and schools, as set by the cabinet

A teenager plants a tree at an event organized by the National Jewish Fund, January 2010.
Yaron Kaminsky

The government and the Jewish National Fund came to an agreement on Monday through which the JNF, which is also known by its Hebrew name, Keren Kayemeth LeIsrael, is to provide a billion shekels ($287 million) a year to the state’s coffers in 2018 and again in 2019. The funds will be used to fund the country’s development and infrastructure needs, such as highways and schools, as set by the cabinet.

News of the agreement was announced at a session of the Knesset Finance Committee, which has been considering a bill that would require the transfer of funds from JNF to the state. The agreement, which is still subject to the approval of the JNF board of directors on November 6, came in the face of the government’s resolve to pass such a law if no arrangement was reached with the organization. The settlement of the matter was announced by Finance Ministry Director General Shai Babad and JNF chairman Danny Atar at the committee hearing.

Knesset sources said the stormy nature of the Finance Committee session was designed to press the JNF to come to an agreement with the government after the organization recently refused to provide additional government funding for 2018.

JNF, which was founded in 1901 to acquire and develop land in pre-state Israel on behalf of the Jewish people, has been particularly well-known over the years for its afforestation efforts, but it is work has also included the establishment of recreation areas, other land development projects and ecology-based projects. It owns large swathes of the land in the country. JNF also has separate independent affiliates in a number of countries around the world that raise funds for projects in Israel.

In 1961 an accord was signed to create the Israel Land Authority, a government agency that was empowered to coordinate management of the land. Also created was the Land Development Administration, which became the executive arm for the JNF’s core operations. The JNF derives an income from land that is sold.

Jewish National Fund assets and income

Assuming that the JNF board approves the agreement with the state, the projects that will be funded next year and the year after through the special allocation to the state will appear in the government budget but will be funded by JNF. Babad, of the Finance Ministry, told the committee session that a list of the projects that will be funded would be drawn up shortly, adding that, if the JNF’s board of directors fails to approve the agreement on November 6, the government would seek on November 7 to pass the law requiring the transfer of funds from JNF to the state. For his part, Atar, of the JNF said he would make every effort to get his organization’s board to approve the agreement.

Yoav Horowitz, Prime Minister Netanyahu’s chief of staff, denied suggestions that the prime minister wanted to nationalize the Jewish National Fund, calling the prospect baseless and adding: “The prime minister and the government don’t need to apologize for their decision to divert funds for the benefit of Israel’s security and other uses. That is within their power and their obligation.”

Horowitz was critical of a prior JNF board of directors meeting that he and Babad attended and that was recorded. He called the meeting “embarrassing,” saying in part that one of those present called on the government to negotiate with “the JNF political party.” The prime minister, he said, “will not conduct negotiations with the JNF political party.”

Appearing at the committee hearing prior to Babad and Atar’s announcement of an agreement, the Finance Ministry’s deputy budget director, Ariel Yotzer, said the JNF’s continued tax exemption would be conditioned on the organization’s providing funding for development of infrastructure “in keeping with the needs of the State of Israel” in a sum equivalent to 80% of the income derived from the sale of land.

For his part, the chairman of the Knesset Finance Committee, Moshe Gafni (United Torah Judaism) noted that the state signed an agreement with JNF in 2015 that provided for the transfer of JNF funds to the state in 2016 and 2017 but also stated that the state would ask for no further funds until 2021. In response, the Finance Ministry’s legal adviser, Asi Messing, said if JNF were not exempt from paying taxes, the sums involved would be paid to the state.

“We need to adjust the situation to the reality in 2017,” he said. “There has been substantial growth in the funds that are being transferred to JNF. It is appropriate and possible, in my view, despite the difficulties involved, to pass the proposed bill” to require the transfer of funds.

An JNF internal controller’s report that was presented on Sunday to the organization’s leadership noted serious failings in the committee that in the past oversaw the allocation of funds for various projects. The report alleged violations of proper procedure, that the committee was established without being subject to rules and that its authority was not properly defined. Meir Spiegler, who headed the committee as director general of JNF and has since left the organization said in response that during his time at the helm, the committee had undergone major changes in how it was run, including the institution of procedures, enhanced oversight, complete transparency and full documentation of its decisions.