Links to more of The CJN’s coverage:
- JNF Canada CEO Lance Davis blasts CRA after charity’s status revoked (The CJN Daily podcast with Ellin Bessner)
- Read about why JNF Canada lost charitable status after a decade of problems (The CJN’s initial exclusive report)
- These JNF Canada donors are split over the embattled charity’s future (The CJN Daily podcast with Ellin Bessner)
The CEO of the embattled Jewish National Fund of Canada charity, Lance Davis, insists he is now “running a very tight ship”, in the wake of the Canada Revenue Agency’s (CRA) recent decision stripping the historic Zionist fundraising organization of its charitable status.
After a 2014 audit of the charity’s operations both in Israel and Canada found “major concerns” and “repeated and serious non-compliance” with Canada’s Income Tax Act rules, the Canada Revenue Agency quietly told the Jewish charity several times—in 2016, 2018, and again in 2019 that it needed to clean up its act or face sanctions–including having its charitable licence revoked.
But Davis, who became JNF Canada’s CEO in 2017, maintains that many of the auditors’ long-standing concerns had been addressed.
Davis suggested the CRA moved the goalposts on some of the main sticking points, and then refused to engage on JNF Canada’s proposed solutions.
“We proudly are running a very tight ship now,” Davis said during a wide-ranging interview conducted on Aug. 16. to discuss the revocation and to respond to the contents contained in 358 pages of newly-released CRA documents. “The unfortunate reality is that the audit is about [20]11 and [20]12, and I can’t change the past, but today we’re in a very, very strong position from a charitable compliance point of view.”
The CJN told Davis during that interview we had been sent the CRA’s newly unclassified documents but it appeared Davis had already prepared some briefing notes to help him answer all our questions about what the documents reveal.
The Aug. 10 revocation means the prominent charity—which has donated more than $200 million to Israel to date, and enjoyed the support of former Canadian prime ministers Stephen Harper and John Diefenbaker, provincial premiers, retired Ottawa hockey star Daniel Alfredsson, business moguls and thousands of Canadian families—had to immediately stop issuing tax receipts to its donors.
Publishing the announcement in the Canada Gazette also started the clock, giving JNF Canada a year to wind down its charitable operations and dispose of its $30 million in assets.
JNF Canada officials have said the charity was “blindsided”. They also didn’t appreciate the revocation decision being published on the Jewish Sabbath. JNF leaders felt the charity was the target of “targeted bias”, possibly a result of a years’ long campaign by pro-Palestinian activists to destroy the respected Canadian Jewish charity.
In reality, Davis admitted during the nearly hour-long interview that the charity has been aware for nearly a decade that it was in serious trouble with the revenue agency’s investigators. He confirmed JNF Canada has been the subject of continuous CRA scrutiny over, undergoing four audits from 1977 to 2014.
Documents show the auditors were patient as they kept in touch with JNF Canada.
They sent warning letters called “administrative fairness letters” to the charity beginning in 2016 through to 2018, advising JNF Canada it needed to address a host of compliance issues or risk being sanctioned, and possibly revoked.
Finally on Aug. 20, 2019, the CRA sent JNF Canada a notice of intention to revoke.
Documents don’t show any communications with JNF Canada again for three and a half years, from August 2019 to Feb. 14, 2023.
But over that summer and into the fall of 2023, CRA notified JNF Canada again of the impending revocation. The two sides discussed a proposal letter with solutions.
It didn’t change the CRA’s mind.
On June 26, 2024, the CRA confirmed once again it was pulling the trigger.
An outline of the concerning issues
The government found five major areas where auditors felt JNF Canada was violating the Income Tax Act, and these areas have been much the same ones for eight years, except for CRA’s concerns over the charity’s funding of projects in the West Bank, Golan Heights and on IDF military bases, as that issue has apparently been put to bed, the documents show.
Auditors decried compliance issues that included sloppy, missing and superficial paperwork, and financial record keeping which made it hard to prove exactly what the Canadian charity has been doing in Israel.
Another issue was JNF Canada didn’t keep the requested financial records in Canada, but in Israel only, which is against the tax code. As well, auditors were provided the records in Hebrew only, which isn’t illegal but was annoying to CRA since the auditors couldn’t read them, the CRA told the charity.
The auditors consistently asked for very detailed records and proof that the Canadian charity actually had full direction and control over where the charity money had ended up across Israel.
They asked who was actually in charge of the projects and the finances? Was it the Canadian Jewish charity? Or was it really the historic Jerusalem-based Keren Kayemeth LeIsrael/Jewish National Fund environmental organization, founded in 1901 by Theodor Herzl, who was running the show?
The CRA also accused JNF Canada of carrying out work that wasn’t exclusively for charitable purposes.
But according to Davis, the CRA’s main sticking point, from which all the other problems stem is whether JNF Canada was still meeting its decades-old founding “charitable purpose”. This is what it promised the Canadian tax agency back in 1967 that it would carry out, when the Montreal-based charity was originally certified.
Even today, Canadian charities must promise to meet some charitable purposes, whether it be under such humanitarian categories as education, community and economic development, or religious works. JNF Canada told the tax department in 1967 that its main charitable purpose would be “relief of poverty”.
Here’s how JNF Canada promised to do this
According to the June 26, 2024 letter confirming it will revoke, the Canadian Jewish charity had assured the government back in 1967 that it would relieve poverty by paying the wages of “indigent workers” in Israel, mainly new immigrants from “backward Middle East and North African countries and countries of eastern Europe who because of emotional or physical disability, and would otherwise be unemployable” in the regions where they were living,
These workers would carry out the environmental projects in Israel, by actually planting the trees and digging new water reservoirs.
However, since paying labour costs isn’t sexy, JNF Canada admitted to the government early on that its staff intentionally devoted its public marketing brochures and fundraising campaigns to the tree planting and the environmental projects.
“Experience has shown the Charity that donors are more likely to provide donations for charitable projects than simply relieving poverty through the employment of Indigent Workers,” JNF Canada wrote to the CRA’s Charities Directorate in Ottawa in 2018.
Planting trees was ‘a gimmick’
Which is why JNF Canada’s founders admitted to the revenue department as far back as July 21,1967 that the trees in Israel were “a gimmick”.
“I have put the word “planted” in quotation marks,” reads the CRA document from 2024 citing correspondence with the charity’s founders in 1967.
“You will recall that on the phone I referred to the practice of·”planting” trees as a “gimmick”. Actually, all monies raised by the Jewish National Fund of Canada are used to pay daily stipends to indigent workers. So we “plant” the trees to the extent that we give a tree certificate to the donor and use the money to give employment to the man who is doing the planting.”
Donors would attend ribbon-cuttings at the official openings in Israel, and have their names displayed prominently at the sites, such as the flagship Canada Park between Tel Aviv and Jerusalem, or the Carmel Forest, restored after a devastating wildfire in northern Israel in 2010.
Documents show the CRA became suspicious that it was the projects themselves which had begun to take priority, while the relief of poverty of the workers was secondary.
CRA pointed to JNF Canada’s public mission statement in 2014 at the time of the audit: “to provide funds to Keren Kayemeth Le’lsrael (KKL) to redeem the land of lsrael, to connect Canadian Jewry to their national homeland and to their partnership in its development, and to emphasize the centrality of Israel to Jewish life.”
These three goals, the CRA felt, were not “relief of poverty”, but rather were unstated “non-charitable purposes” and would disqualify JNF Canada from being a registered charity any longer.
Ghosted?
JNF Canada’s Lance Davis remains frustrated that the tax agency seemingly moved the goalposts.
Why, he asks, was the original charitable humanitarian purpose accepted for so many years, but now suddenly was breaking the law?
“We were surprised because ‘Why didn’t you tell us on the first audit or why did you agree to it in 1967?’ Why didn’t CRA say to us in 1967, ‘This object that you’re proposing is not kosher?,” Davis said.
The parties talked about this issue in depth from 2016 on. JNF Canada appealed to the auditors for help to update the founding charitable purpose.
Documents show the charity provided the agency with a 131-page brief that year, containing suggested wording plus nearly a dozen possible acceptable categories.
Davis accuses CRA of stonewalling any of the charity’s good-faith attempts to comply on this important issue, including refusing to have a meeting to discuss what would be acceptable.
“And we got zero response to any of these ten previously approved objects [we copied] from other charities,” Davis said.
CRA documents confirm the tax department was aware that JNF Canada felt ghosted. However, the CRA replied in 2023 and again in 2024 that it saw no further purpose in discussing a refresh of JNF Canada’s founding charitable purpose because there were still so many other outstanding concerns.
Lack of direction and control
The auditors wanted proof that it was JNF Canada on top of things such as who got hired and what projects were selected, and not just the Israeli project managers.
The CRA asked the charity for more detailed proof the workers were actually eligible beneficiaries. Although JNF Canada sent in sample resumes, timesheets, monthly payroll receipts, bank transfers and the like, auditors repeatedly asked for more detailed information.
They wanted to know whether the Canadians could actually prove that these workers had already used up all their Israeli unemployment benefits and were now receiving Israel’s version of welfare. The auditors also felt the workers were being seriously overpaid.
What’s more, the CRA felt that paying a worker wasn’t enough to relieve poverty. They also expected the Canadians should ensure they were receiving vocational training, help with job-seeking skills, and career counselling.
As a result, the auditors said that JNF Canada was not relieving poverty but rather providing the workers with a private benefit–and doing the same thing for the KKL-JNF by covering the Israeli non-governmental organization’s labour costs.
CRA documents show it was KKL and other third-party Israeli project managers doing the recruiting and screening of these workers. That would have been fine, the auditors said, had the Canadians checked the registries, asked for frequent progress reports, and more closely authenticated the Israeli invoices which they received before releasing the funds to the KKL/JNF.
The CRA wrote that it couldn’t determine to its satisfaction that JNF Canada was protecting the interests of Canadian taxpayers, rather than being merely a conduit of funds to their Israeli counterparts with no guarantees where the money was being spent.
Take compliance seriously
When it comes to the CRA’s criticism of JNF Canada’s record keeping, Davis acknowledged they had a point.
It was true that JNF Canada’s project documents were held mainly overseas in Israel, Davis said, but maintains that is no longer the case.
“It was brought to our attention that that is problematic. So, now all of our files are held in Canada,” Davis told The CJN, inviting us to “stop by and check it for ourselves.”
While Ottawa said it is not illegal to furnish documents in Hebrew, as JNF Canada repeatedly did, it makes the auditors’ jobs much harder–and was a sore point mentioned repeatedly in the documents. The auditors even reminded JNF Canada it had promised to get these records translated into English or French, but as late as 2023, JNF Canada was still asking for more time to do this.
When it came to the CRA’s concerns there wasn’t enough paperwork to prove who really directs and controls JNF Canada’s operations in Israel, Davis pointed to the history of the Zionist charity.
JNF Canada was incorporated in the 1960s as a charity independent from its Israeli parent, with its own bank accounts, board of directors and selected projects. Before then, Canadian Jews directly supported the work of the historic Jerusalem-based organization.
After 1967, he said, JNF Canada used the Israelis as their on-the-ground agent to carry out reforestation projects and construct water reservoirs and social service centres.
Nevertheless, as a result of the 2014 audit, the charity has since broadened who it works with aside from the KKL/JNF and now collaborates with other Israel-based charities to build accessible playgrounds, resilience centres for marginalized youth and hospital pavilions.
Davis pointed to other improvements JNF Canada made in recent years to comply with CRA’s concerns, such as developing what he called “robust agency agreements” covering their relationships with their Israeli partners.
JNF Canada also compiled a handbook for directors to teach them about their responsibilities under Canadian charity law.
Aside from administration changes, JNF Canada brought in new management that “is committed to returning the Charity to full compliance with its obligations,” JNF Canada wrote to the CRA’s Sandra Burke, the Ottawa-based head of compliance, in a letter in 2018.
The charity hired a professional staffer based in Israel to oversee its projects, rather than rely on a committee of volunteer expatriates from North America who had been doing this once or twice a year.Jerusalem-based Osnat Dvorkin started in February 2017, shortly before Lance Davis assumed the CEO position.
Davis took over from his predecessor Josh Cooper, when both Cooper and the charity’s former director of finance Kate Belinsky left within months of each other in 2017 to work at the Baycrest Foundation.
JNF Canada’s new chief financial officer, Edit Rosenstein, was hired in 2018.
“We take direction and control and compliance with CRA very, very seriously,” Davis told The CJN.
After their revocation, the charity uploaded a decade’s worth of its audited financial statements to its website, in an effort to be more transparent, The CJN was told.
JNF Canada’s CEO says the process was unfair
Davis and the charity feel the dispute didn’t have to reach the point of revocation.
He accuses the tax agency of deliberately treating the Jewish charity more harshly than necessary.
“Very few charities are revoked for cause, and so it’s indeed very, very disappointing, and curious that over this many years, there wasn’t time for one conversation, one bit of dialogue, one effort to negotiate a compliance agreement, which we asked for many, many times,” Davis said. “We believe that would have been the appropriate off-ramp.”
During the frantic days at the end of July, documents obtained by The CJN show JNF Canada even attempted to soften the blow. The charity asked the CRA for a less “draconian” solution: instead of stripping the charitable status, it asked the CRA to annul it.
In cases of annulment, a charity is permitted to keep its assets.
In a revocation, it is not.
On July 24, just before the Aug. 10 revocation, JNF Canada filed a legal challenge with an application to the Federal Court of Appeal in Toronto, asking to overturn the impending charitable status revocation altogether.
A second legal challenge, an appeal for a quicker judicial review of the agency’s decision, was filed on Aug. 20, 2024. The charity is asking for the matter to be reconsidered or for the revocation to be put on hold while it is in court.
JNF Canada’s lawyers maintain the CRA had given them the impression in late June that it would delay publishing the revocation notice in the Canada Gazette.
The charity felt it was also entitled to the requisite 90 days to appeal the decision before CRA made the revocation public.
“Charities, like individuals or corporations, deserve the presumption of innocence,” said Davis. “So when we filed with the courts, we expected to carry on as a charity because of this presumption of innocence. We deserve our day in court like the law provides us.”
In reality, when the wrongdoing is very serious, the CRA does have the authority to revoke a charity immediately, Davis said. However, the JNF was not told it was an aggravated case.
JNF feels the CRA made a deliberate decision to come down hard on the Jewish charity, rather than following normal department procedure which Davis said begins with education, followed by compliance agreements, then sanctions, and only then, revocation.
“There were many steps along the way where we could have gotten onto a different path before revocation, “ he said, adding that the JNF Canada case was not fraud. “They weren’t required to [revoke]. That was a discretion. It was a choice.”
What happens now?
In the meantime, JNF Canada will continue to operate as a non-profit corporation, Davis said, meaning it would proceed with the charity’s full calendar of upcoming fundraising events such as Negev dinners, golf tournaments, and trips to Israel scheduled for the fall of 2024.
Fundraising for marquee infrastructure projects in Israel will also continue, although JNF Canada can’t issue tax receipts for any donations. However, Davis is encouraged by messages of support he’s receiving from donors.
“Just yesterday we received a gift for $144,000, and the donor said, ‘I don’t need a charitable receipt. I’m happy to give it. The work we’re doing is really important’,” Davis said. “And it’s not just the top donors. It’s the grassroots people. Trees are still being purchased.”
One of JNF Canada’s highest profile projects this year is repairing Kibbutz Kissufim, a community near the Gaza border which was heavily damaged in the Oct. 7 Hamas onslaught. Eight kibbutz members, six Thai labourers and eight IDF soldiers were killed, while four people were kidnapped into Gaza.
“We can’t stop our important work. Our extended family in Israel needs us,” said Davis, who recently returned from a site visit to the kibbutz.
“The leader of the kibbutz said to us, ‘I can’t imagine rebuilding without the support of JNF Canada.’ It’s one that we have to be there for, so without receipts, we’re going to continue to do the work that we have to do, because JNF Canada is essential.”
While JNF Canada’s legal battles are underway, the charity launched a petition, as well as a social media campaign, to garner political support for its efforts to reverse the revocation.
In a letter to supporters on Aug. 13, Davis and national president Nathan Disenhouse asked community members to write the minister of national revenue, Quebec MP Marie-Claude Blais, to restore JNF Canada’s status while it appeals CRA’s decision through the courts. The petition against what JNF calls “targeted bias” has now gathered more than 11,000 signatures.
But Davis acknowledged these ninth-inning tactics came after a lobbying effort that’s been underway for a long time.
“We’ve made representations to elected officials, as well to the prime minister’s office, we’ve made representations to try to handle this as quietly as possible,” he said. “We don’t have any choice now but to go to the courts to obtain justice.”
Auditors views on JNF support for the IDF, West Bank settlements
During the 2014 audit, the charity became the target of a public campaign by pro-Palestinian activists in Canada to put it out of business. Groups including Independent Jewish Voices, the Green party and the federal New Democrats have been behind a #StopJNFCanada campaign.
These groups also filed a complaint with the CRA in 2017, objecting to where some of the Canadian charity’s money was being spent in Israel: on IDF military bases and in the West Bank and Golan Heights.
Davis pushed back on their opponents’ suggestion that their efforts are what motivated the government to move to revocation now.
“In our letter of confirmation of revocation, the Green Line, the IDF, was not brought up,” he said. “It’s about the charitable object and the fallout from that.”
The CRA was not permitted to release any information on a charity which is being investigated until it revokes its status. But media reports surfaced in 2019 containing auditors’ concerns at that time that JNF Canada was breaking Canadian law by funding landscaping work on Israel Defence Forces bases.
The latest revocation notice and warning letter from 2024 indeed does not mention anything about that controversy.
However, documents released by the CRA now make clear the extent of the agency’s prior concerns at the time about JNF Canada’s past activities in the area.
Auditors reported in 2018 that nine JNF Canada projects were built on land that was part of the Israel Defense Forces, which is not allowed.
These included outdoor fitness areas for soldiers living at a northern yeshiva named for the late Calgary philanthropist Jack Balaban; facilities for families of personnel living at army and air force bases, including the Fred and Linda Waks pavilion at Tel Nof; beautifying a training base in Sde Boker for high schoolers about to enlist in the IDF; landscaping the Tze’elim army base; upgrading an existing auditorium at the Israeli naval base at Bat Galim in Haifa, and helping to build new rec halls and kitchen facilities at three air force bases.
Lance Davis assured donors in 2018 that JNF Canada had stopped funding projects which support the IDF as of 2016, as a result of the CRA raising it with them during the audit process.
“I really want it to be clear to anybody who believes that the JNF has done something nefarious. It’s not the case,” Davis told The CJN last week. “We’re really proud of the public amenities and the playgrounds and the gardens and the parks, and the whole host of things that have been brought to fruition. But again, because the CRA has brought it up, to be cooperative and collaborative, we stopped.”
A further eight JNF Canada projects raised eyebrows with the CRA auditors in 2018, documents show. These were built in areas of the West Bank including East Jerusalem, or in the Golan Heights.
While Davis maintains the CRA permits charities to operate anywhere in the world, and doesn’t explicitly forbid charities from working even in the West Bank, tax officials said they were bound to follow Canadian government policy on the issue, which in this case, is set by Global Affairs Canada.
“It is our position that establishing and maintaining physical and social infrastructure elements and providing assistance to Israeli settlements in the Occupied Territories serves to encourage and enhance the permanency of the infrastructure and settlements, and appears to be contrary to Canada’s public policy and international law on this issue,” the CRA documents show it wrote JNF Canada in 2018.
While Davis still disagrees that there is anything wrong with conducting water reclamation work across the 1967 Green Line boundaries, he said the charity offered to work with the CRA starting in 2018 to make sure it was in compliance here.
“CRA actually has approved many charities to do work on the other side of the Green Line. We disagree. But nevertheless, we agreed to stop doing projects on disputed territory to be cooperative and collaborative,” Davis told The CJN.
Canada, the United Nations, and now the International Court of Justice consider that Israel is currently illegally occupying the disputed territories in the West Bank.
A spokesperson for the CRA, Sylvie Branch, was asked whether work in that geographical area is prohibited today under the tax law.
“As is always the case, in order to determine if a particular activity in any region furthers a charitable purpose and meets all other registration requirements under the Act, the Canada Revenue Agency (CRA) would need to consider all the relevant facts on a case-by-case basis.” Branch wrote in an email Aug. 21, 2024.
“The CRA is responsible for interpreting and administering the legislative provisions under the Act, while Finance Canada is responsible for federal tax policy and legislation relating to registered charities under the Act. Global Affairs Canada is responsible for developing and implementing foreign policy.”
JNF Canada funded Ne’eman Foundation Canada
While Davis maintains JNF Canada no longer directly funds projects that benefit the IDF, it appears the Canadian charity had ties, and regularly donated money after 2016, to another Canadian charity who did.
From 2018 to 2022, JNF Canada donated nearly $1.9 million to the Ne’eman Foundation Canada, according to JNF’s own filings with the CRA as well as according to JNF Canada’s tax documents released to the public and published on the website Charitydata.ca.
Ne’eman Foundation Canada’s charitable status was also revoked on Aug. 10, the same day the CRA stripped JNF Canada’s status away.
“It was found that the Organization demonstrated a serious breach of the fundamental requirements for registration, and as such, should be revoked immediately,” reads the CRA’s July 2, 2024, letter to Jonah Libman, listed as a Toronto-based director of the Ne’eman Foundation of Canada.
The letter was sent to Ne’eman Canada’s Toronto team by Sharmila Khare, the director general of the CRA’s charities directorate, who started in that job in 2022.
The auditors weren’t happy when they found out some of Ne’eman Foundation Canada’s money during 2016 and 2017 went to Israeli groups who help serving soldiers in the Israel Defense Forces. This, despite the directors of the Ne’eman charity assuring the CRA that “no funds will be used for, or diverted to, military projects or any terror-related activities.”
Yet, the CRA documents show Ne’eman Foundation Canada paid out $1.89 million during that time mainly to a group called Noam Israel/Panim el Panim which encourages Israeli high school students and young Israelis already serving in the IDF to feel closer to their Jewish identities.
A further $66,000 went to help two Lone Soldier organizations, documents show.
Although the Ne’eman Foundation of Canada’s officials told the auditors it no longer funded those IDF-connected organizations, investigators reported the Canadian charity merely pivoted and started supporting different lone soldier groups, which is what the auditors wrote on March 3, 2021.
“Information contained on its website indicates that it has entered into new partnerships with other lone solider (sic) centers including, The Michael Levin Base (The Base for Lone Soldiers), Osey Chail, and Keren Merpurgo-Sde Eliyahu, Habayta Campus for lone soldiers,” the CRA documents show.
The website for Ne’eman Foundation’s parent organzation in Israel still accepts donations for at least two of those lone soldier centres: Michael Levin and the Keren Merpurgo-Sde Eliyahu Habayta campus.
The CJN contacted Ne’eman Foundation Canada’s local listed directors and also its Israel-based CEO, Chaim Katz, for interviews.
Katz is a Canadian who moved to Israel in 1987 and operates the Ne’eman Foundation’s Israeli headquarters out of Shilo, a Jewish settlement located in the West Bank.
Jonah Libman said he personally was no longer involved with the organization. It was a similar response from Rabbi Gary Zweig, of Thornhill, who said he stopped being a director at the end of June 2024.
Katz declined to give an interview.
However, in a written statement, he explained their goal is to continue with their charitable mission “on behalf of loyal Canadian taxpayers, for those in need.”
“We do not wish to engage in public discussions regarding CRA matters and decisions, nor are we discussing the inner workings of our organization,” Katz writes.
Katz did not reply to questions about whether his group will also be appealing through the courts.
When asked about JNF Canada’s funding of Ne’eman Foundation Canada, Lance Davis told The CJN on Aug. 26 in an email that it “is not our business” what projects the board of Ne’eman Foundation Canada supported while they were still a registered charity.
“Ne’eman worked with JNF to advance a number of projects over the course of the years and did so capably and efficiently,” Davis wrote. “JNF made agreements based on directed gift to projects we wished to support and everything was documented according to CRA compliant templates that our counsel prepared for us.”
JNF Canada on the West Bank?
Although JNF Canada’s CEO maintained the charity stopped funding projects built on the West Bank, it is unclear if any part of the the money it donated to Ne’eman Foundation Canada was spent to support Israel-based groups who still do.
CRA documents show the auditors slammed the Ne’eman Foundation Canada charity because between 2016 and 2017, it sent nearly $1 million to right-wing Jewish groups in Israel who support increasing the Jewish presence in the West Bank and in East Jerusalem.
Some $885,767 went to a group known in Hebrew as Elad/Ir David, or City of David, in English. The high-profile Jewish organisation in Jerusalem has been criticized for pushing Arab residents out of their homes, especially in the Silwan neighbourhood of East Jerusalem, and working to “Judaicize” the area and establish a stronger Jewish presence.
Ne’eman Foundation Canada also gifted money to the group Women in Green, to the tune of $16,205 in 2016 and 2017.
This group opposes a two-state solution, feels Jewish people have rights to the entire territory of biblical Israel, and the group helped establish the hilltop West Bank outpost of Oz Ve’Gaon in 2014 in memory of three Israeli teens murdered nearby by Hamas.
Revocation was justified, according to a Jewish expert
Toronto charity law expert Mark Blumberg feels the Jewish National Fund of Canada charity has primarily been the author of its own misfortune, rather than a victim of bias or antisemitism on the part of bureaucrats within Canada’s tax department.
Blumberg has analyzed thousands of CRA disputes with charitable organizations during his three decades of legal practice. He confirmed that the government revokes fewer than five percent of charities after problematic audits. In the case of JNF Canada, Blumberg believes the tax department actually was more than accommodating for far too long.
The CJN provided Blumberg with the trove of CRA documents, before sitting down for an interview on Aug. 20—which can be heard on The CJN Daily podcast, following Ellin Bessner’s conversation with Lance Davis.
What stood out for Blumberg was the lack of appropriate direction and control over the funds sent to Israel.
“These are very large amounts of money. There weren’t appropriate books and records being kept,” Blumberg said. “So even if some of the stuff that’s being done in Israel is really good work, it’s not possible to verify that after the fact, because the books and records weren’t in place.”
With the charity sending millions of dollars each year abroad, Blumberg suggested officials should have moved sooner to hire someone full time to keep track of what the CRA was asking for, and have them do things like photocopy and scan documents to help keep track of the records.
“I think that the sorts of things CRA is asking for would be… not very complicated,” the lawyer said. “And they could have easily done this with direction and control if they’d wanted to. And they had 40 or 50 years to get their stuff together.”
Blumberg was also surprised that the high-profile Canadian charity kept quiet about the CRA’s concerns for so long, even though it knew it was at risk of being revoked.
From 2019, JNF Canada continued to hold receptions, trips to Israel and gala fundraisers across the country, honouring community leaders in both the Jewish and broader non-Jewish community.
“I’ve been complaining for a long time that when CRA works out a charity is doing things that are really not appropriate for a registered charity, it takes 10 to 20 years to get rid of that group,” he said, describing the CRA’s level of patience with the JNF Canada team as “extreme”.
Blumberg surmises the CRA finally stopped waiting when the agency hired a new director general in May 2022 to run the charities directorate. Sharmila Khare came up through the CRA ranks, and before that, worked at the ministry of finance, and the World Bank.
In 2023, she told members of the charity industry that the CRA wants to see a strong and vibrant charitable sector, albeit one that Canadians can trust.
“Canadians will trust the sector if it is in compliance with the regulatory framework,” she said in an interview with Future of Good.
For Blumberg, the notice of revocation in 2019 should have been a wake-up call for the JNF Canada team.
“I really have no idea what they’re thinking about as to how it got to this point. It’s very sad,” he said, suggesting the charity may have received bad legal advice, or good advice that they chose not to follow.
The fallout from JNF Canada’s very public problems will have international implications, Blumberg predicts. It is likely to bring what may be a long-overdue spotlight on the way KKL/JNF in Israel has operated, as well as compliance problems with the tax departments in the other 20 regions and countries where the KKL/JNF has branches.
“So I could bet you that charity regulators in different countries are looking at [their] JNFs more closely, wondering if they’re having the same problems,” he said.
What worries Blumberg going forward, aside from the fate of JNF Canada, is that in the current climate post-Oct. 7., the controversy will fuel public suspicion that all Jewish charities are shady.
Blumberg suggests Jewish charities should pay attention, get their records in order and make sure they learn a lesson from what has happened to JNF Canada.
“I don’t think CRA today is as patient as CRA might have been in the past, and I hope they’re not as patient,” Blumberg said, adding that revoking JNF Canada’s charitable status was justified.
“I just think it’s not fair to donors, primarily Jewish donors, that they might be giving to a group that might not be doing exactly what they’re saying they’re doing, or might not be complying with the law. For all charities in Canada, we want higher standards. We want them to be doing things appropriately.”
- JNF Canada CEO Lance Davis blasts CRA after charity’s status revoked (The CJN Daily podcast with Ellin Bessner)
- Read about why JNF Canada lost charitable status after a decade of problems (The CJN’s initial exclusive report)
- These JNF Canada donors are split over the embattled charity’s future (The CJN Daily podcast with Ellin Bessner)
