Behind the Headlines Break from Israel Branch Spurs

As World ORT and ORT Israel go public with a divorce that was finalized in September, the two appear headed for a turf war over fund-raising dollars in the United States and programming in Israel.

Started in czarist Russia in 1880 as a series of vocational schools for Jews, the ORT system runs Jewish-based educational institutions in 58 countries.

Until recently its largest network was in Israel, where ORT Israel is the management company for some 162 schools serving more than one-third of ORT’s 300,000 students worldwide.

In an unpublicized move, the Israeli group broke away from the international body Sept. 12, leaving each organization to consider how best to move forward.

Just how the dispute started is up for debate.

ORT Israel claims it left because World ORT cut its budget drastically, and because the Israeli group wanted to see more transparency from the central agency. The central organization claims the Israeli arm would not disclose how it was spending parts of the $4 million to $5 million World ORT sent to Israel each year.

Worldwide, the ORT system takes in just under $24 million annually, according to Sarina Roffe, a spokeswoman for ORT America. Of that, ORT America raises about $5 million in the United States each year to funnel to World ORT, which in turn distributes it to ORT agencies in 58 countries. Another $3.6 million for World ORT comes from United Jewish Communities, the umbrella group for North American Jewish federations.

In each country, ORT works with governments and private institutions to house and staff the schools. According to Robert Singer, World ORT’s director general, World ORT leveraged the $24 million raised into $325 million worth of services in 2005, including ORT Israel’s $225 million budget.

Over the past decade the face of philanthropy has changed, especially in the United States, as donors want more control and oversight of how their dollars are spent. In light of this trend, World ORT called in 2004 for more transparent reporting from each member country, according to Judy Menikoff, president of ORT America and vice chair of World ORT’s executive committee.

According to World ORT officials, every country complied with these new rules except Israel.

ORT Israel said it was never asked to report on “ordinary funds” — funds from donors that aren’t earmarked for specific projects. But ORT Israel said it complied fully with the new reporting rules when it came to earmarked funds.

“Since 1949 until 2006, ORT Israel was required to submit reports on the use of designated funds, and it did,” Shai Lewinsohn, ORT Israel’s head of foreign affairs and organizational development, told JTA. “All the reports were submitted to World ORT and ORT America, and all requested additional information was submitted as well.”

American ORT and Women’s American ORT, which are soon to be merged but officially started using the name ORT America on Jan. 1, became concerned with several projects the groups were funding in Israel, Menikoff said. One involved an annual grant to help students at ORT schools pay for transportation, food, books and other extras such as field trips. Women’s American ORT raised enough to give 1,500 students a $550 annual grant.

When World ORT began inquiring about that and other programs, ORT Israel notified World ORT that it would quit the international organization and would no longer take money from it.

ORT Israel officials say their organization is transparent, is certified by Israel’s Justice Ministry and is subject to regular audits. That, they say, should have been enough to satisfy the central organization’s new standards.

World ORT disagreed, saying the audits provide an overall accounting of how much ORT Israel takes in and what it spends, but don’t show where the dollars go.

ORT Israel claims it came under World ORT scrutiny only after it asked for the central organization to be more transparent. ORT Israel made three requests, according to Lewinsohn:

What criteria World ORT uses to decide how funds are allocated — specifically, “What is the justification for the massive increase in allocation of donation funds to ORT operations in Russia while significantly decreasing the allocation of funds to” ORT Israel?

Who audits World ORT’s central offices in London? and

Who decided on Singer’s salary and contract details?

“Only after these three questions were raised has World ORT started to claim that there is lack of transparency,” Lewinsohn said.

Singer said he would not “stoop down to that level” to answer such allegations.

Ultimately, Lewinsohn said, ORT Israel broke with the parent organization because it needed more money to operate its schools after Israel’s government cut its education budget repeatedly over the past two years, and after a “major decrease” in the amount of funds World ORT transferred to Israel over the past six years. However, World ORT said funding has remained more or less steady since 1998.

In the wake of the split, each organization is mulling its options.

ORT Israel is aggressively seeking new dollars to fund the 2 percent of its budget that Israeli municipalities and the Education Ministry do not fund. Since Sept. 12, ORT Israel has raised $5 million in Israel and Europe, Lewinsohn said.

The Israeli group has had contact with several American organizations, including a December sit-down with Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Organizations.

Hoenlein told JTA that fund raising did not come up. But ORT Israel has hired a consultant, Perry Davis Associates, to strategize on fund-raising opportunities in America.

The organization faces several roadblocks. Because World ORT owns the name ORT, the Israel division cannot use it when trying to raise money here. The Israel division also has yet to set up a 501(c)3 charitable organization, which makes donations tax-deductible.

United Jewish Communities, whose predecessors have had a relationship with ORT America and its predecessors for 90 years, seems to have taken sides.

“UJC will continue to maintain its relationship with World ORT,” the group said in a statement issued to JTA. “We recognize and value it as an important, critical overseas partner, doing valuable work and implementing positive programs throughout the world. UJC maintains no direct funding relationship with ORT Israel, nor does UJC anticipate creating one with it, or any country-based ORT operation.”

World ORT received $3.6 million from UJC in 2005. Neither ORT Israel nor World ORT could say how much North American money went to ORT Israel, but about $3 million raised in the United States each year outside UJC has gone to Israel.

Independent of the UJC, 35 to 55 federations directly fund ORT institutions in various parts of the world. That amounts to about $2 million per year, according to World ORT’s North American representative, Harry Nadler, who raises funds from the individual federations.

World ORT will continue to run many of its same programs. For instance, it could still give stipends to needy Israeli students to help pay for books, meals, transportation and field trips. As of right now, however, it will not give that money to students enrolled in ORT schools in Israel.

But money allocated to ORT Israel before Sept. 12 will not be affected, Nadler said. For instance, World ORT received $2 million from the UJC’s Israel Emergency Campaign to provide trauma counseling for students in up to 50 ORT schools in Israel’s North after last summer’s war in Lebanon.

With its work in Israel a primary draw for donors, the split has left World ORT in a scramble to find programming to present to its benefactors.

Menikoff said she doesn’t anticipate any flap with donors, however, and Singer said that the $4 million to $5 million World ORT had been giving to ORT Israel would be designated to other projects in the Jewish state within months.

“Personally, I am very sorry that this whole situation arose,” Menikoff said. “It makes me very sad.”