Israeli Amuta Payments to Board Members, Rules and Restrictions
This article discusses the number of Executive Board and Audit Committee meetings that are permitted as well as amuta payments to board members who attend the meetings.
This Series of Posts
Our team of lawyers at our law firm has experience in a variety of fields, including Israeli non-profit law. This article focuses on what you need to know about non-profits or charitable organizations (an amuta in singular and amutot in plural) in Israel. This series discusses proper and legal management of non-profit organizations in Israel in order to help you administer your Israeli non-profit organization.
For more information on the Israeli Corporations Authority which oversees Israeli non-profit organizations, see the government website. For more articles from an Israeli lawyer and legal advice for Israeli non-profit organizations related to the topic of this article, see our articles about the Executive Board, record keeping and reimbursements.
General Information on Amuta Payments to Board Members
The Israeli Amutot Law is very clear about its restrictions on payments to board members. These restrictions on amuta payments to board members exist to prevent conflicts of interest within the non-profit organization.
Every Israeli non-profit organization (amuta) has a General Assembly which is responsible for deciding whether or not Executive Board members may be paid for their services and if so for how much. The law is clear that Executive Board members may not be employees of the Israeli non-profit organization, nor may they be paid for services they provide to the amuta unless it is a limited reimbursement for participating in official meetings as board members.
Cases Where Board Members Can Be Paid for Services
Executive Board members, the Executive Board chairperson and Audit Committee members may be paid for services in a few cases. They can receive payment from the Israeli non-profit organization when they participate in amuta meetings and their expenses can be reimbursed, but only if the General Assembly approves the payment. While the previously mentioned groups may receive these specific payments, they are not entitled to any social benefits.
It is important to note that Israeli law does set a limit on the amount of money the General Assembly can decide to give the various board members and chairperson. The amount of money that can be given depends on the annual financial turnover of the amuta. So, if an Israeli non-profit organization has a very high financial turnover, the payments for services to board and committee members and the chairperson may be higher. There are limits to the number of meetings that may be held annually, and this number is not connected to the financial turnover of the Israeli non-profit organization.
An Example of Reimbursements
To provide an illustration of the possible reimbursements, we list a basic example. If an Israeli amuta’s financial turnover is up to ten million shekels annually, the Executive Board can have a maximum of twelve meetings, the Audit Committee can have a maximum of twelve meetings annually, the permanent committee of the Executive Board can have a maximum of eight meetings annually, and each board or committee member is entitled to a maximum of 505 NIS per meeting, while the board chairperson is entitled to a maximum of 555 NIS per meeting. If for some reason the Israeli non-profit organization cannot promote its objectives or activities without meetings beyond what is listed, the General Assembly must approve further meetings, and only in this case can further payments be made. The extra meetings may not exceed 150 percent of the number of meetings. The chairperson may not earn more than 15,000 NIS in payment for their participation and role.
For organizations that have a financial turnover that exceeds ten million shekels, payments for the Executive Board and Audit Committee members as well as the Executive Board chairperson are permitted to be higher.
If you have further questions about your amuta payments to board members, committee members or your chair person, feel free to contact us.
Advocate Joshua Pex specializes in Israeli non-profit law and would be happy to assist you with the needs of your Israeli non-profit organization.