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April 15, 2019

Where Does $100 to United Israel Appeal Go?

by Anne Paddock

United Israel Appeal (UIA) – a 501 (c) 3 based in New York (and an affiliate of the Jewish Federation of North America) is responsible for the allocation and oversight of funds raised by the Jewish Federation of North America and expended in Israeli by its operating agent, The Jewish Agency for Israel (a 501 (c) (3) based in Jerusalem.

According to the IRS Form 990 (2016 for the year ending June 30, 2017), UIA reported $167 million in revenue, $161 million of which came from related organizations ($155 million from the Jewish Federation of North America) and nearly $5 million from government grants. The remaining $1 million came from rental income and net gains on the sale of assets.

UIA reported $174 million in expenses (not including nearly $7 million in depreciation), of which $1 million were expenses for compensation (although most of the staff compensation is paid by the Jewish Federation of North America), interest, travel and conferences, office expenses, legal fees, etc. Virtually all the revenue collected by UIA went towards grants.

UIA awarded $173 million in grants (399 of which were over $5,000) with the funds allocated to UIA’s overseas operating agent, the Jewish Agency for Israel.

That UIA could award more in grants than revenue taken in is because of the organization’s net fund assets (they had the reserves to cover excess expenses).  At year-end, UIA had $171 million in net fund assets.

Based on the above information, $100 in revenue was basically spent on grants. However, it is important to remember that the revenue to UIA came primarily from related organizations, and specifically the Jewish Federation of North America who spent $18 out of every $100 on functional expenses while $82 was spent on grants (most of which were awarded to UIA or JDC). So, if you gave $100 to the Jewish Federation of North America, then $82 went towards grants. Since, UIA had virtually no functional expenses (about $1 million), then most of the grant money awarded from the Jewish Federation of North America to UIA was spent on grants.

It is unclear if the $173 million in grants are reported as revenue by UIA”s overseas operating agent, the Jewish Agency for Israel, who reported total revenue (mostly from contributions, gifts, and grants) of $381 million, of which $83 million was used to compensate 1,140 employees, which equates to an average compensation of $73,000.  In other words,the Jewish Agency for Israel used $22 out of every $100 to pay for compensation-related expenses for the 1,140 employees.

If UIA’s grants were reported as revenue by the Jewish Agency for Israel, then a $100 donation to the Jewish Federation of North America had $18 deducted to cover the Federation’s expenses. $82 was then awarded in grants. If those grants (from UIA) went to the Jewish Agency for Israel then another $22 was deducted to cover compensation related expenses, leaving $60 allocated to grants. If the Jewish Agency for Israel did not report the grants from UIA as revenue, then the $82 from the Jewish Federation of North America went towards grants in Israel.

In summary, if you want your donation dollars to go furthest, make a donation directly to the Jewish Agency for Israel (you will avoid the $18 out of every $100 used by the Federation to cover operating expenses). $22 will still be deducted out to cover the staff compensation, but $78 will go towards humanitarian assistance.

To read the IRS Form 990 for UIA (2016) for the year ending June 30, 2017, click here.

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