Israeli State Subsidizes Fund Supporting Draft-Dodging Yeshiva Students Despite Supreme Court Ruling

Following the June 2024 Supreme Court ruling that halted state funding for yeshiva students exempt from military service, ultra-Orthodox institutions lost hundreds of millions of shekels in government budgets. In response, community leaders established the "Olam HaTorah Fund" to raise donations from Israel, the US, and Europe to compensate for the shortfall, which is expected to reach approximately 550 million shekels by 2026.

An investigation by Calcalist revealed that at least two Israeli nonprofit organizations channel funds for the Olam HaTorah Fund and are classified as "public institutions" by the Israeli Tax Authority. This status allows donors, including Israeli contributors, to receive a 35% tax credit on their donations. One such organization, "Misgav - Association for Education and Welfare," reported revenues of about 75.5 million shekels in 2025, including roughly 7.2 million shekels from Israeli donations. Another, named Olam HaTorah Fund, raised approximately 5.4 million shekels in 2025, with around 4 million shekels coming from Israel.

While some funds may support activities beyond direct aid to draft-dodging students, these nonprofits issued receipts or received payments for donations collected by senior ultra-Orthodox leaders. Currently, the Tax Authority is working to remove yeshivas harboring draft-exempt students from the list of public institutions to increase pressure for enlistment, in line with the Supreme Court directive. This includes verifying student rosters to identify potential draft evaders.

However, the nonprofits assisting the Olam HaTorah Fund are unlikely to lose their tax-exempt status because they primarily transfer funds or provide support rather than operate state-funded religious institutions. The Tax Authority declined to confirm or deny ongoing investigations, citing confidentiality laws but noted that any credible suspicion of eligibility violations is examined.