Israeli Charity Breaks Bitterly With U.S. Arm

The photograph was a fundraiser’s dream: a frail child in a gold-and-black dress struggling for balance on a walker. The caption accompanying the photo described her plight: “Ayalah [is] a beautiful five-year-old born with spina bifida and is paralyzed from the waist down.”

The Brooklyn-based Aleh Foundation charity used the heart-tugging pitch on its website in 2010, claiming that it “is here to help her family adapt their home to become disabled-accessible, and to ease their staggering financial burdens.”

The only problem is that the Aleh Foundation, which purports to be the American fundraising arm of ALEH, a well-known Israeli charity that provides residential facilities for the disabled, never gave a dime for Ayalah’s care, and it used her likeness fraudulently, according to a $5 million lawsuit filed this fall in Brooklyn Supreme Court.

In their suit, Ayalah’s parents, Masha and Shaul Yakobzon, a young Israeli couple who moved to New York City about a decade ago to provide better medical care for Ayalah, claim that representatives of the Aleh Foundation never indicated that their daughter’s likeness “might be widely published, disseminated, or otherwise exploited for a fundraising campaign.” And, the parents claim, “No funds, additional special services, products, or monetary assistance of any kind, has been provided” to the family for Ayalah’s care.

For officials at ALEH, who have for three years been trying quietly to get the Aleh Foundation and its longtime head, the politically connected Borough Park rabbi, Shlomo Braun, to stop passing himself off as a representative of the charity, the Yakobzons’ lawsuit is the last straw. And it has pushed what had been a private dispute into public view.

Talking to the media for the first time, in extensive interviews with The Jewish Week, ALEH officials are mounting an offensive against Rabbi Braun in an effort to prevent confusion in the minds of donors about the relationship between the two groups. They allege that Rabbi Braun has funneled only a fraction of the money he has raised on ALEH’s behalf to the organization in Israel. And they claim that he has not provided requested documentation about his fundraising expenses.

In attempting to sever ties with Rabbi Braun, ALEH officials have also established a new American fundraising arm with the assistance of the Jewish National Fund and added a prominent warning on its website that reads: “ALEH’s network of care facilities … officially broke off its ties with the Aleh Foundation … The two organizations are not affiliated.”

And they are threatening legal action.

“I am shocked and dismayed to see that the Aleh Foundation under your directorship has continued to position itself as representing ALEH’s activities in Israel,” ALEH Director General Yehuda Marmorstein wrote Rabbi Braun last month, in a letter being made public for the first time. “You … take sole credit for the past and ongoing success of the ALEH organization in Israel, although our two organizations have not been affiliated for several years now.”

In an interview with The Jewish Week, Marmorstein said, “I never suspected that [Rabbi Braun] was cheating,” but he added that “a very small amount of money” that the Aleh Foundation claimed to be raising “was being sent over [to Israel].”

About ALEH’s new public stance against Rabbi Braun, an Israeli with close ties to the charity said, “With the pending legal action against the Aleh Foundation, ALEH wants to make absolutely sure that their good name is not dragged through the mud.”

Since the Yakobzons’ lawsuit — it also lists Shlomo Berger, the Aleh Foundation’s administrator, as a defendant — was filed, the online appeal for Ayalah no longer appears on the Aleh Foundation’s website. But that website, which features several prominent politicians and philanthropists as honorary board members, and several prominent local physicians as members of the Aleh Foundation’s medical board, gives no indication that the Aleh Foundation’s affiliation with ALEH has been severed.

For his part, Rabbi Braun regards the Aleh Foundation’s connection with ALEH to be unbroken. “The decades-long work that the Aleh Foundation has expended can not be ignored and can not be dismissed,” he wrote in an e-mail interview. (He would only agree to an interview if The Jewish Week sent him questions via e-mail.)

“In spite of the weak economic climate and deliberate hindrance of the JNF, we continue to faithfully work for ALEH in Israel, and we continue to gain world recognition and support for their outstanding work with severely handicapped children,” Rabbi Braun wrote.

About the Yakobzons’ suit, Rabbi Braun said the Aleh Foundation “brought the baseless and frivolous claims of the Yakobzons to a Beth Din [a rabbinic court], where it rightfully should be adjudicated. The Beth Din summarily dismissed their claims.”

According to an ALEH spokesman, the Israeli charity, whose annual budget is $35 million, first became suspicious of Rabbi Braun about a decade ago when the charity began to notice that the amounts sent by the foundation were less than the totals of what some “large” donors had independently told ALEH they had given to the foundation.

“It was very, very clear that that amount should have added up to more,” the spokesman said.

A review of several years’ worth of IRS nonprofit filings for the Aleh Foundation reveals a discrepancy between amount claimed by the foundation as total revenue and the amount ALEH claims it received from the foundation — in the years after it broke with Rabbi Braun.

In 2009, according to IRS Form 990, the foundation said it raised $817,651; ALEH said it received $448,815. In 2009, the foundation’s 990 Schedule F document claimed a total of $579,993 in charitable grants to the “MIDDLE EAST,” naming as the recipient “Israel’s largest network of residential facilities for children with severe physical and cognitive disabilities.”

In 2010, the foundation claimed it raised $523,799; ALEH said it received $156,000 for that year. In 2010, the charitable grants figure on the foundation’s Schedule F form was $310,717.

In both years, the difference between what ALEH said it received from the Aleh Foundation and the amount the foundation claimed on its IRS forms was more than $100,000.

Rabbi Braun disputes claims of a discrepancy for 2009 and 2010. “The Aleh Foundation did indeed forward the full amount stated,” he wrote in an e-mail. “This is supported by canceled checks and bank fund wires receipts. The 990 Schedule F forms submitted by the Aleh Foundation are accurate and certified.”

Marmorstein said the rabbi did not respond to a 2010 request for details about how much money the Aleh Foundation raised, how it spent the money, and why it continued to use ALEH photographs in its promotional material “if the two entities are no longer partners.”

“I have no idea what they’re doing with the money,” Marmorstein said. “I have no information” upon which to answer a question about the money’s fate.

Rabbi Braun told The Jewish Week in an e-mail: “The costs in conducting and maintaining a professional fund raising office is an expense that can not be dismissed from the funds raised for ALEH in Israel. That cost does not directly translate as funds contributed to ALEH in Israel, which it nevertheless is. Further, a great part of funds being contributed directly to ALEH in Israel from other sources come through the efforts of the Aleh Foundation operating in the United States as well as in Europe.”

The relations between ALEH and its former U.S. affiliate highlight the often informal ties maintained between some Israeli institutions and their representatives in this country.

Such U.S. affiliates, frequently bearing an “American Friends of …” name, are “free-standing, independent, self-ruled organizations” not beholden for day-to-day direction to the Israeli organizations for whom they are raising money, Eliezer Jaffe, author of “Giving Wisely: The Israeli Guide to Nonprofit and Volunteer Organizations” (Gefen), told The Jewish Week.

Such conflicts between the parent organization and an U.S. affiliate happen occasionally, Jaffe said. “There aren’t that many [cases].”

An expert on local charities who spoke on condition of anonymity said such apparent irregularities are “standard” in the fundraising world. “On the average, professional fundraisers keep 65 percent of the money they raise.”

Organizations such as ALEH, one of two Israeli beneficiaries of El Al Airlines’ on-board “Small Change, Big Difference” tzedakah collection campaign, are dependent both on funds provided by American donors and on the organizations’ above-board reputations here.

Since the Yakobzons’ lawsuit was filed, the Aleh Foundation’s rating from Charity Navigator, which rates nonprofits’ efficiency, has dropped; it had previously had a “woeful one-star rating,” according to a Daily News article that reported on the Yakobzons’ lawsuit. The organization ranks nonprofits from one to four.

But the Aleh Foundation now has no-star rating, according to Sandra Miniutti, Charity Navigator’s vice president for marketing. “This charity has a Donor Advisory at the moment, not a star rating,” Miniutti told The Jewish Week in an e-mail. “We issued a Donor Advisory because of the lawsuit” brought by the Yakobzon family. “We issue Donor Advisories, and remove the charity’s star rating, when we become aware of a serious issue.”

The relationship between ALEH in Israel and Rabbi Braun began in 1988, six years after the charity was founded in Bnei Brak, a haredi community near Tel Aviv, by a group of parents to care for their severely disabled children. (It now cares for some 650 children with severe physical and cognitive disabilities.) At that time, in an effort to increase the charity’s fundraising efforts in this country, Marmorstein, newly appointed as ALEH’s head, traveled here to find a successor to a Brooklyn homemaker who had raised about $40,000 a year through her circle of friends since 1984.

Marmorstein approached Rabbi Braun, who had been recommended by a mutual friend. He was then working as a social worker but was known to have a wide network of contacts in Brooklyn’s Orthodox community. They reached a handshake agreement, without a written contract, Marmorstein said, adding that he instructed the rabbi to keep the Aleh Foundation’s overhead low and to provide clear records of his expenses.

The rabbi identifies himself on his website as the veteran of a “long and distinguished 40-year career in public service” who now works as “Community Representative” for Brooklyn State Sen. Martin Golden, the assistant majority whip. Rabbi Braun, according to his website, was a social worker for JASA and served as director of social services for the now-defunct Council of Jewish Organizations of Borough Park.

By the late 1990s, Marmorstein said, it became clear that the arrangement was not working. He told The Jewish Week that ALEH received neither the expected level of funds, nor the requested documentation of expenses.

In 2009, Marmorstein came to New York again, to tell Rabbi Braun that he no longer represented ALEH’s activities in Israel; at the time, ALEH established, with the assistance of JNF, a separate 501c3 nonprofit known as the ALEH Negev Foundation to serve as ALEH’s entity for tax-deductible donations.

“I was very patient — he kept on making promises” about large amounts of funds that would be received, Marmorstein said of Rabbi Braun. The rabbi never seemed to deliver. “Maybe he was a poor fundraiser.”

Marmorstein said that while the Aleh Foundation has forwarded to ALEH “a small amount of money” over the years, that happened only after pressure was applied by U.S. donors who had earmarked their contributions for specific ALEH projects in Israel.

In an e-mail letter to Rabbi Braun a year ago from Alan Sacks, ALEH’s Israeli attorney, the Aleh Foundation was instructed to “cease all activities indicating a relationship of any kind” with ALEH. “The continued activities of Aleh USA” — the Aleh Foundation’s alternative name — “are both unlawful and unethical.”

A press release issued by the prlog.org firm earlier this month touted the Aleh Foundation’s work. “It is only due to the energetic and successful public relations and fund raising efforts of the Aleh Foundation in the USA, during the past 30 years … that Aleh in Israel was able to become Israel’s foremost provider of the care and treatment of the severely disabled children,” the release stated.

It also indicated that proceeds from the Aleh Foundation’s upcoming awards dinner at the Museum of Jewish Heritage — A Living Memorial to the Holocaust next May will go to an ALEH special education center now under construction in Bnei Brak.

Marmorstein said ALEH may contact the honorees at the planned 2014 dinner to dissuade them from participating, and is this month closing the ALEH bank account to which the Aleh Foundation has access.

“Not a single penny” from the Aleh Foundation’s awards dinner in May “will actually reach ALEH,” said the Israeli with close ties to ALEH. “ALEH’s main concern is identify theft — [the Aleh Foundation’s] questionable fundraising tactics are giving ALEH a bad reputation. It’s not about the money anymore.”

steve@jewishweek.org