The U.S. Funding Challenges Facing the Israel-Palestine ‘Peace Industry’

The cutbacks in American aid to the Palestinians during the Trump administration, and with it the critical damage to the funding of a long list of initiatives for peace and dialogue between the Palestinian and Israeli peoples, justifiably aroused a heated public debate at the time. The gradual return of funds to our region now is less talked about, even though it could significantly influence the entire regional “peace industry” in the coming years.

Last week, Thomas Nides, the new U.S. ambassador to Israel, gave one of his first official speeches. He didn’t talk about reopening the East Jerusalem consulate or visa waivers for Israelis, so his speech went under the radar. Instead, he spoke about the new American initiative to spend $250 million over the next few years on cooperation and dialogue between Israelis and Palestinians.

The funding was enabled by the "Lowey Act," which was approved last year with bipartisan support and won especially broad support in the American Jewish community. The initiative was led by Democratic Congresswoman Nita Lowey before her retirement.

Among those who pushed hard for the law – officially the Nita M. Lowey Middle East Partnership for Peace Act, which was passed as part of a wider counter-response to Trump’s cutbacks – was the Alliance for Middle East Peace, a coalition of over 150 Israeli and Palestinian peace organizations. Many of these organizations are now anxiously waiting the flow of money.

The grants will be distributed by the United States Agency for International Development, with the criteria for eligibility focusing on promoting cooperative economic projects, dialogue and reconciliation at the grassroots level.

Most of the recipients will be nonprofits that are barely able to scrape together private donations. The millions of dollars provided under the Lowey Act could change the quality and scope of their operations from one extreme to the other. Such large grants have never been given before for these purposes.

On the face of it, everything sounds good. The United States is once again investing in peace and in organizations with good and important goals. But we should recall the era of the Oslo Accords. Innumerable initiatives for promoting cooperative projects and dialogue between Israelis and Palestinian mushroomed at the time.

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To this day, scholars disagree regarding the extent to which they actually helped to promote peace. Some arguably widened the rift – like initiatives for dialogue that, at best, yielded nothing and, at worst, left the participants with a sense of despair.

One of the biggest controversies in this discussion pertains to undertakings like mixed soccer teams, which are sometimes cynically dubbed “hummus” initiatives. The events of this past May were a reminder that idyllic aspirations for coexistence won’t solve everything. Even when people do get along on the individual level, a national-political conflict exists in parallel. With all due respect to soccer games, the real solutions are political.

When it comes to such large amounts of money, there are many other challenges on the agenda, such as: How prepared are existing organizations for such grants in terms of infrastructure? Will the money reach populations that aren’t the usual target for initiatives of this type? To what degree will Palestinian organizations and activists participate in the grants in this era of anti-normalization?

The peace organizations have undoubtedly undergone a significant process of maturation since the days of Oslo. They are less naive, and none of these questions are new to them. But have the Americans chosen to serve on the steering committee that distributes the money undergone a similar process? It's not certain.