Reimbursements and Israeli Not for Profit Organizations
This article briefly discusses what Israeli not for profit organizations need to know about reimbursements.
This Series of Posts
Our team has legal experience in a number of fields, including Israeli not for profit law. This article shares what you need to know about not for profits or charitable organizations (an amuta in singular and amutot in plural) in Israel. This series provides various rules for proper and legal management of not for profit organizations in Israel.
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 record keeping, an overview of general and administrative expenses and restrictions on payments to board members.
Reimbursements for Expenses Related to Amuta Meetings
In an earlier article we discussed payments for services that the chairperson, committee or board members may receive. In addition to those payments, these parties may be reimbursed beyond the previous payments if they fit any of the following cases:
1) If the chairperson, committee or board member lives more than forty kilometers from the meeting place. In this case the General Assembly may decide to cover travel expenses.
2) If the chairperson, committee or board member has a medical certificate indicating they have a disability that would require special traveling expenses. In order for this to happen, the person must meet the Israeli legal definition of a disabled person.
3) If the financial turnover of the amuta is greater than 50 million NIS and a third of the Executive Board members live outside of Israel, the General Assembly may approve reimbursing travel and accommodation expenses for one Executive Board meeting per year if it takes place outside of Israel. If half of the Executive Board members live abroad, then the amuta may reimburse the travel and accommodation costs of two Executive Board members per year to travel outside of Israel for the amuta meeting.
4) So long as the financial turnover is greater than 50 million NIS, the Executive Board member who lives outside of the country and is not an Israeli resident can be reimbursed for travel and accommodation expenses when coming to Israel for the amuta board meeting.
5) If the Israeli not for profit organization has not made payments for participation in any of the board meetings (as discussed in the article entitled Israeli Amuta Payments to Board Members), or if the Israeli not for profit organization has only made partial payments for participation in meetings, then the chairperson, committee or board members can be reimbursed for their expenses regardless of whether or not they qualify for the previous four cases listed above. The General Assembly is responsible for deciding on this while also considering the number of meetings the amuta has had and the expenses already paid. It is important to note that payments must not exceed the maximum amounts discussed in the article Israeli Amuta Payments to Board Members.
Reimbursements for Expenses Related to Promoting the Amuta
If the Israeli not for profit organization board member or chairperson is traveling in Israel or abroad in order to promote the amuta’s objectives, then the Israeli not for profit organization is permitted to pay for the expenses if the three following conditions are met:
1) The Executive Committee makes a decision beforehand that the board member can travel and promote amuta activities. This can only be done with the approval of the Audit Committee, which must ensure that the activities and objectives promoted are agreed upon.
2) The Executive Board approves paying the expenses.
3) The expenses are considered reasonable and necessary to conduct the specified activities.
The Executive Board member or chairperson must also report to both the Audit Committee and Executive Board about their activities once they are completed and discuss what was accomplished. The Executive Board must then communicate the expenses and results of travel with the General Assembly.
Israeli not for profit organizations that have much higher financial turnovers or much lower financial turnovers (and they do not reimburse for expenses and services) may also reimburse Executive Board members and the chairperson for travel and accommodation. For more detailed information, contact our legal team.
If you have questions about reimbursements in your Israeli not for profit organization, please contact us.
Advocate Joshua Pex specializes in Israeli not for profit organizations and would be happy to discuss the needs of your organization with you.