The rules for loaning money build on the rules for transferring funds and assets.\u00a0 As with rules that corporations or companies abide by, Israeli not for profit organizations may make loans to employees (generally long-term employees) as a benefit to ensure that the employee will commit for a longer period. It is also permitted for an Israeli not for profit organization to lend money to another not for profit organization so long as all relevant stipulations under the transferring funds or assets section are met.<\/p>\n

If all the rules above are not met, an amuta <\/em>can still loan money to another organization if it meets the following conditions:<\/p>\n

1) The borrowing organization is a not for profit organization.
\n2) The borrowing organization has objectives similar to the objectives of the amuta <\/em>lending the money.
\n3) The Executive Board of the amuta <\/em>seeking to lend money approves the loan.
\n4) The lending amuta <\/em>and borrowing organization sign a loan agreement detailing conditions, interest rate, terms of repayment and the date by which repayment is due.
\n5) The borrowing organization must provide reasonable securities for repaying the loan.
\n6) The amuta <\/em>lending the money must ensure that loaning money to another organization will not jeopardize its own operations or prevent the lending organization from accomplishing its specified goals.
\n7) The Executive Board must agree that the borrowing organization can meet the terms of the loan agreement, particularly repaying by the specified date.
\n8) The Executive Board must have confidence that the not for profit organization borrowing the money is being managed well.<\/p>\n

Additionally, an Israeli not for profit organization is permitted to loan money to its employees so long as the terms are reasonable.<\/p>\n

If the Israeli not for profit organization grants loans as part of its objectives, it may do so as long as there are detailed terms regarding the loan and that those receiving the loans are treated equally.<\/p>\n

The Israeli not for profit organization may not loan money to amuta <\/em>members who are not employees, nor may it lend money to Executive Board or Audit Committee members.\u00a0 The only way an amuta <\/em>may lend money to these individuals is if the amuta <\/em>has objectives to lend money and these members meet the criteria for the loans.<\/p>\n

Stipends<\/h4>\n

Israeli law prefers that not for profit organizations do not pay money in cash as this limits proper oversight of the organization\u2019s finances.\u00a0 As such, stipends may not be paid in cash.\u00a0 If an Israeli not for profit organization does pay stipends in cash, the Registrar of Amutot <\/em>may withhold a certificate of proper management.\u00a0 Instead, stipends should be paid by check to the \u201cpayee only.\u201d\u00a0 Any stipends paid must fall under clearly defined criteria.<\/p>\n

Contact Us<\/h4>\n

If you have questions about transferring funds, loans and donations, please contact us.<\/p>\n

Advocate Joshua Pex specializes in Israeli not for profit law and would be happy to discuss the needs of your not for profit organization with you.<\/p>\n

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This article addresses the rules that Israeli not for profit organizations need to know about transferring funds, loans and stipends. This Series of Posts Our team of lawyers has experience in a variety of fields, including Israeli law on not for profit organizations.\u00a0 This article is one in a long series focusing on information about…<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[185],"tags":[196,194,192,219,215,278],"class_list":["post-8948","post","type-post","status-publish","format-standard","hentry","category-non-profit-organizations-en","tag-amuta","tag-amutah","tag-israeli-nonprofit-law","tag-ngo","tag-non-profit-organization","tag-transferring-funds"],"acf":[],"yoast_head":"\n