Where Does $100 to the Friends of the Israel Defense Forces Go (2023)?

Friends of the Israel Defense Forces (FIDF) is a tax-exempt, non-profit 501 (c) 3 who “collects charitable donations on behalf of the soldiers of the IDF” in Israel. Based in New York City, FIDF has 20 offices in the United States and Panama with a remarkable ability to not only raise funds but to accumulate nearly $300 million in net assets. Recently criticized for embarking on a major fundraising effort following the October 7, 2023 massacre in Israel sparking a war in the Gaza Strip, FIDF claims the $174 million in net assets has been earmarked for other causes but the growth in net assets from $174 million in 2022 to $288 million in 2023 means a substantial amount of funds were saved rather than spent.

The real question is how did FIDF accumulate $288 million in net assets?  The answer:  for many years FIDF did not spend as much as they collected.  From 2013-2018, FIDF added $10-$34 million annually (an average of $25 million annually) to their general fund, meaning they spent significantly less than they raised and therefore added $150 million to net assets (think savings) giving the organization a significant financial cushion.  At the end of 2018, FIDF had $219 million in net assets – a highpoint for the organization.

In 2019, 2020, and 2021 FIDF spent more than they raised which is why net assets were down to $174 million in 2022 because they relied on their cushion to cover the expenses that exceeded the revenue ($23 million deficit in 2019, $18 million deficit in 2020, and a $1 million deficit in 2021 for a total of $42 million over the 3 year period). But in 2023, FIDF added $139 million of unspent revenue (they raised $282 million and spent $143 million).

So, to get back to FIDF’s claim that $288 million in net assets are earmarked, I would ask the organization for specific information because I doubt FIDF wants to see a further erosion of net assets (I would assert those net assets are invested and expected to produce investment income for the organization in the future, and are not committed to grants to the IDF).  FIDF has historically awarded $42-$81 million annually in grants (an average of $60 million annually since 2013) and spent an average of $25 million annually on organization expenses.  But, in 2023 – probably as a result of the war in Gaza – the FIDF gave $112 million or 40% of revenue in grants.

So, if you gave $100 to FIDF in 2023, how was the $100 spent?  The short answer is that $40 was awarded in grants while $11 was spent on organization expenses and $49 was added to the general fund.  

FIDF reported total revenue of $282 million in 2023 (compared to $89 million in 2022 – with the $200 million increase attributable to increased support due to the war in Gaza), most of which came from contributions, gifts, and grants.

Expenses totaled $143 million and can be categorized as follows:

• $112 million (40% of revenue):  Grants to Foreign Organizations
• $ 19 million (7% of revenue):  Compensation
• $  7 million (2% of revenue):  Office-Related Expenses and Travel
• $  5 million (2% of revenue):  Fees for Services (primarily other with no detail provided)

Using the above information, every $100 was spent as follows:

$100:  Revenue

-$ 40:  Grants to Foreign Organizations

-$   7:  Compensation

-$   2:  Office-Related Expenses and Travel

-$   2:  Fees for Services (primarily other with no detail provided)

-$ 51:  Total Expenses

 $  49:  Excess Revenue:  To General Fund

To read the IRS Form 990 (2023), click here.