Israeli NGOs, Banks, Cash, Checks and Credit Cards
This short article briefly addresses issues related to the funds and assets of Israeli non-governmental organizations (Israeli NGOs).
This Series of Posts
Our law office specialize in a variety of fields, including Israeli NGO law. This article addresses some of what you need to know about non-governmental organizations or charitable organizations (an amutah in singular and amutot in plural) in Israel. This is part of a series of posts discussing the rules for proper and legal management of non-governmental organizations in Israel in order to better help you run your Israeli NGO.
For more information on the Israeli Corporations Authority which oversees Israeli non-governmental organizations, see the government website. For more articles from an Israeli lawyer and legal advice for Israeli non-governmental organizations related to the topic of this article, see our articles about record keeping, financial statements and an overview of general and administrative expenses.
Bank Accounts for Israeli NGOs
All Israeli non-governmental organizations must have a bank account in their name. Additionally, these NGOs must deposit monies into their account. Israeli non-governmental organizations are not permitted to deposit monies in the bank accounts of other amutah members, Executive Board or otherwise. It is recommended that when Israeli non-governmental organizations are running multiple projects requiring high costs, separate accounts should be opened for each particular project.
In some cases, the Israeli non-governmental organization may be legally required to open a special account in connection with the organization’s credit card.
Cash and Checks in Israeli NGOs
The Registrar of Amutot requires that Israeli non-governmental organizations must not pay for its expenses or stipends in cash. The only exception is cash paid in the form of “petty cash.” Israeli non-governmental organizations that do not abide by this rule will not be issued a certificate of proper management.
All of an Israeli non-governmental organization’s checks must be signed by the two amutah members who are authorized to sign on behalf of the organization. The signatories must be appointed by either the General Assembly or Executive Board of the Israeli non-governmental organization, or as the organization’s by-laws specify. The purpose for this is so that there is an appropriate level of monitoring and the two authorized signatories are in agreement on payments. Checks should not be signed prior to specifying to whom the check is paid and the designated amount.
Transferring Money in Israeli NGOs
Israeli non-governmental organizations must only transfer money in accordance with the legal regulations. If an Israeli non-governmental organization wishes to transfer money to another account, whether it is another amutah account or to someone else, the Israeli non-governmental organization must make this request by fax. It may not do so by telephone. Additionally, the fax must be signed by the two members authorized to sign on behalf of the non-governmental organization.
Credit Cards and Israeli NGOs
Using credit cards prevents the two authorized signatories from signing on behalf of the Israeli non-profit organization, so it limits the proper management of the organization’s funds. Credit cards may be used when it is necessary, for example, when the purchase cannot be made another way.
It is possible to use a credit card in a few situations:
1) A special credit card that restricts the amount of one-time or monthly expenses may be used if it is signed by the two signatories of the Israeli non-profit organization. It may be used within the framework of petty cash expenses in accordance with regulations. It should only be used when purchases cannot be made in another way, for example for internet purchases, payments to the Registrar, payments during travel on behalf of the organization, etc.
2) A credit card can be used when a specific account is opened particularly for the card, and money is transferred to the account only after the two authorized signatories sign a document indicating the amount of money that is being transferred for the purpose of purchasing the particular item. This specific bank account for the credit card should not retain money in it except for money transferred for particular items, as needed. As in the first point, this should only be used for purchases on the internet, payments to the Registrar, payments made during travel on behalf of the organization, etc.
If you have questions about banks, cash, checks and credit cards for your Israeli non-governmental organization (whether an amutah or cheletz), please contact us.
Advocate Joshua Pex specializes in Israeli NGO law and would be happy to discuss the needs of your non-governmental organization with you.