KEREN HAYESOD (Palestine Foundation Fund), the financial arm of the world zionist organization , founded at the Zionist conference held in London in July 1920. Two basic views were expressed on the problem of how the World Zionist Organization should finance its work in Palestine after the important political gains made at the end of World War I. One group favored the establishment of a company run on banking lines to promote undertakings solely on a business basis. The other emphasized the need to preserve the pioneering character of the Zionist effort by mobilizing national capital through donations from the Jewish masses. There was also a proposal, which won little support, to float a national loan. The conference adopted a compromise combining the first and second proposals. The Keren Hayesod was to appeal to Zionists and non-Zionists alike for funds to finance on a nonprofit basis immigration and colonization in Palestine in order to lay the foundations of the Jewish National Home, as well as to encourage business enterprise in close cooperation with private capital. Contributions were to constitute an annual voluntary tax, with a certain minimum level. Keren Hayesod was registered on March 23, 1921, as a British limited company. Its members (limited to no more than 50), together with the chairman of the board of directors, were chosen by the executive of the Zionist Organization. The head office was in London until 1926 when it was transferred to Jerusalem. When the enlarged jewish agency for Palestine was founded in 1929, with equal representation for non-Zionists, Keren Hayesod continued to be the main instrument for financing the Zionist budget. From 1925, the fund operated in the United States as the United Palestine Appeal (which was a partnership of Keren Hayesod and the Jewish National Fund) which combined in 1939 with the american jewish joint distribution committee and the National Refugee Service to form the united jewish appeal . The UJA operates in the United States, while the Keren Hayesod head office in Jerusalem coordinates operations in other countries including the State of Israel, where it is a joint fund of the Keren Hayesod and JNF The Keren Hayesod has cooperated with the jewish national fund , youth aliyah , constructive funds associated with Zionist parties, and other officially Zionist-connected institutions. In 1956 it was incorporated in Israel under the Keren Hayesod Law adopted by the knesset . Keren Hayesod and the United Jewish Appeal in the United States are based mainly on the work of volunteers. In almost every country with a Jewish population there is a central committee to collect contributions. There is also a committee in each city with a large Jewish community, as well as divisions for business, trade, professional, and women's groups. In Belgium and Switzerland there are central committees for each language section of the population. The chairman of Keren Hayesod is responsible for its operations in all countries except the United States. There are departments for Latin America, the English speaking countries, and Europe, as well as for special projects in Israel, wills and legacies, information, reception of guests, administration and finance. The emergency campaign initiated just before the Six-Day War, 1967, increased twelvefold Keren Hayesod's normal annual income from countries other than the United States. This was achieved by an increase in both the size of individual contributions and the number of donors, which rose from 200,000 to 400,000. The income rose from $15m in 1966 to $150m in 1967. A second emergency campaign in 1968 raised $42,300,000 in cash and $13,200,000 in additional pledges.(See Table: keren hayesod .) Among the founders of Keren Hayesod were chaim weizmann , Aharon Barth, and isaac naidich . The first directors were berthold feiwel (also managing director), George Halpern, vladimir jabotinsky (also director of propaganda), shelomoh kaplansky , shemaryahu levin , Isaac Naidich, israel m. sieff (later Lord Sieff) and Hillel Zlatapolsky. When the head office of Keren Hayesod was moved to Jerusalem in 1926 the managing directors were arthur hantke and leib jaffe (who was killed in March 1948 by a bomb explosion in the Jewish Agency courtyard), kurt blumenfeld joined them in 1934. Since the establishment of the State of Israel, the following served as chairmen: Arthur Hantke, Zvi Hermann, eliahu dobkin , israel goldstein and ezra shapiro . Administrative heads were leo hermann , as secretary-general, who was succeeded by yehudah yaari . M. Ussoskin, and Shimshon Y. Kreutner (from 1968) were directors-general. Treasurers included Abraham Ulitzer and Moshe Ussoskin. Funds collected through the Keren Hayesod United Israel Appeal (the second half of the name was adopted in 1948 to cover united operations of primary Zionist funds) have helped to establish and develop 820 villages and towns in Israel since 1921, and to help finance such important enterprises as the General Mortgage Bank, Israel Land Development Corporation, Mekorot Water Company, Rassco (Rural and Suburban Settlement Company), Solel Boneh (the Histadrut's building and contracting company), the Palestine (Israel) Electric   Corporation, the Palestine Potash Works (Dead Sea Works), the Anglo-Palestine Bank (now Bank Leumi), Amidar Housing Corporation, Zim Navigation Company, El Al Airlines, and many others. (Israel Goldstein) -Later Developments In the early 1990s Keren Hayesod achieved unprecedented results from its fund-raising campaigns in 47 countries (and 90 cities) on five continents. With no increase in staff, and citing both the Exodus of Russian Jews to Israel and above all the Gulf War and Scud attacks on Israel, it was able to raise in 1990/91 some quarter of a billion dollars of which 201 million were transferred to the Jewish Agency, mainly for immigration and absorption purposes. The massive flow of Russian Jews to Israel, coupled with the dramatic rescue of Ethiopian Jews in Operation Solomon (May 1991), captured the imagination of the contributors and their leaders were able to capitalize on tens of thousands of volunteers, recruited and trained over the years by Keren Hayesod staff from Jerusalem, and its many emissaries overseas. But the great euphoria of 1990–1991 soon waned and the campaign results showed a drop in income. The reasons for this were not hard to discern. From 1993, and mainly after the signing of the Oslo Agreement between Israel and the PLO, and the Israel-Jordan Peace Treaty, the impression was created that Israel was now launched on the road to peace, and there was less need for Jewish contributions. As Israel's economy showed signs of healthy growth, and highly positive and praising articles appeared in the world's media, more contributors wondered if the time had not come to deal with the plight of their own communities. As the process of assimilation and intermarriage continued unabated, stronger voices were heard in the Diaspora communities calling for the need to retain more funds at home for local needs, mainly in the area of education and welfare, rather than to send them to Israel, some of whose leaders were openly saying there was no longer need for them. A debate erupted in Israel in 1993 between Deputy Foreign Minister Yossi Beilin, who called on Jews to strengthen their communities and Prime Minister Rabin who rejected this approach calling on Jews to continue to help Israel deal with the massive immigration. The drama of the immigration also waned, when the Keren Hayesod United Israel Appeal, 19201970 Keren Hayesod United Israel Appeal, 1920–1970   1920–1948 1948–1970 3"> 1\. The balance of the expenditures not covered by the income of Keren Hayesod United Israel Appeal and the United Jewish Appeal came from additional sources, such as German reparations and heirless property, collections on account of the repayment of loans from Jewish Agency-Keren Hayesod funds; the realization of property; special Youth Aliyah campaigns; participation by the Government of Israel in agricultural settlement and long and medium term loans. Immigration and Absorption 487,000 immigrants, including 28,700 children brought to Palestine by Youth Aliyah, settled and absorbed in the country. 1,400,000 immigrants, including 95,800 children brought to Israel by Youth Aliyah. (Many of the children came with parents and Youth Aliyah accepted them asits wards.) Agricultural Settlement. Development Towns and Housing 257 agricultural settlements were established with a population of 90,000 working some 700,000 dunams (175,000 acres) of land. 525 new agricultural settlements and 27 development Towns and Housing towns built; 175,000 new housing units provided permanent homes for nearly 1,400,000 new immigrants Total Funds Raised $ 143,000,000 $ 1,990,000,000 −70% from the United States through United Jewish Appeal. −65% from the United States through United Jewish Appeal −30% from other countries through Keren Hayesod. −35% from 71 other countries through Keren Hayesod. Immigration and Absorption $573,900,000 Health Services $77,100,000 Education $74,600,000 Youth Aliyah $156,200,000 Total expenditures of the Immigrant Housing $432,500,000 Jewish Agency 1948–1970 Agricultural Settlement $945,800,000 Educational Activities $294,200,000 Overseas Operations $160,500,000 Various Activities $301,000,000 Total $3,015,800,000 1920–1948 1920–1948 Grand Total Funds Raised 1948–1970 $1,990,000,000 Total $2,133,000,000   numbers settled into 65,000–75,000 a year. It was difficult to keep the momentum and the interest alive. By 1991 the funds Keren Hayesod transferred to Jerusalem were 185 million dollars. A year later it dropped to 150 and by 1995, 115 million dollars. Keren Heyesod began to focus attention on new sources of income, focusing mainly on wills and bequests, which yielded a growing income. One such bequest in Europe was worth over 100 million German marks. Efforts were also directed at retaining the coming generation and maintaining a high level of educational, motivational, and inspirational programs centering on visits to Israel and to Jewish communities in the former Soviet Union. In the countries where it operates, Keren Hayesod continues to be a major link between Israel and the Diaspora. By the turn of the century, in addition to helping create over 800 settlements in Israel, Keren Hayesod had helped to rehabilitate 90 disadvantaged neighborhoods and developments towns through project renewal , to educate 300,000 youngsters in Youth Aliyah, and to bring 175,000 young people to Israel in "Israel Experience" programs. (Meron Medzini (2nd ed.) -BIBLIOGRAPHY: Keren Hayesod, Memorandum and Articles of Association (1921), Constitution and Palestine Work (1922), Jewish Fund (1921), Keren Hayesod Book (1921), Reports to the Zionist Congresses (1921– ), Facts and Figures on Israel Population and Economy (1950), A Decade of Freedom (1958); I. Klinov, Will and Fulfilment: Keren Hayesod Twenty-Five Years Old (1946); A. Ulitzur, Foundations: A Survey of 25 Years of Activity of the Palestine Foundation Fund Keren Hayesod (1947); M.M. Berman, The Bridge to Life: A Saga of Keren Hayesod 19201970 (1971).

Encyclopedia Judaica. 1971.

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