Israel Bonds and US Universities: A Win-Win-Win-Win Situation
Over the years, many universities purchased Israel Bonds because they are a good investment. This does not happen as often as it once did, in part because interest rates dropped precipitously and universities could earn better returns with other investments.
Today, however, interest rates are rising and Israel Bonds offer competitive rates. So this is an ideal time to resurrect an idea that I proposed in 2005 — called Ivest.
The goal of the Ivest campaign is to increase the level of investment by US colleges in Israel. This objective could be accomplished by encouraging donors to universities to demand their cash be converted to Israel Bonds; by donors contributing Israel Bonds they already hold or wish to purchase for the purpose of giving to a university; and/or by establishing a program for universities to match contributions of Israel Bonds and/or cash with an Israel Bonds purchase from the university’s funds.
The Ivest project has a number of goals beyond the broad desire to promote investment:
By making contributions in the form of Israel Bonds, donors can send a strong message to universities about their commitment to Israel and the value they place on how Israel is treated on campus.
Rather than withholding donations from problematic campuses — something most longtime donors are reluctant to do — converting cash gifts to Bonds (or making any increased gift in the form of Bonds) offers a way to signal displeasure with the university’s policies and also benefit Israel without taking a confrontational position. Doing this at one or more major universities can also send a message to other schools about the potential financial repercussions if they do not police their campuses and demonstrate a zero-tolerance policy for antisemitism.
If done on a broad scale, the contribution of Israel Bonds across the country will show the depth and breadth of support for Israel in a tangible way.
It is also possible to accomplish the additional positive result of promoting Israel studies on campus if the Bonds or income derived from them can be directed to supporting courses on Israel, funding visits from Israel scholars and postdoctoral fellows in Israel-related fields, and perhaps study/research abroad in Israel.
Donors can achieve a trifecta: They receive a tax deduction; they can send a message to the university regarding their support for Israel and/or unhappiness with how Israel is treated on campus; and they may be able to directly promote Israel Studies.
At one time, at least 20 colleges across the country had matching programs regarding bonds. I’m not sure if such programs still exist, but efforts should be made to resurrect them.
One defunct program was at Emory, where the donation of Israel Bonds benefited the Center for Modern Israel Studies. For example, if a donor gave $250,000 to Emory to buy Bonds that paid 6% interest (yes, those were the good old days), Emory would buy $250,000 in bonds from its own endowment as a match. After one year, Israel Studies received the 6% interest on the full $500,000 in Bonds that were purchased. If Emory raised a total of $3 million worth of bonds and a donor gave $250,000, the university allowed the Center to use a portion of the full $250,000 as needs arose (e.g., paying $5,000 a month for a visiting professor’s salary).
At Boston University, a person could make a donation and BU purchased an equal amount of Israel Bonds for its investment portfolio. The University then placed the donor’s bonds in the endowment fund of the Elie Wiesel Center for Judaic Studies. Again, I’m not sure if that program exists anymore.
A third example was the University of Maryland, which agreed to match donations of Israel Bonds to the school by investing an amount equal to the value of the gift in Israel Bonds. As a result, a contribution of $25,000 in Israel Bonds generated a $50,000 net investment for Israel. Various rules applied, but the donor, the university and Israel all benefited from the transaction. If such a program were to be resumed, the funds could be directed to the Israel Studies program.
Let’s say a donor wants to give a university a $25,000 Israel Bond. Israel benefits by getting $25,000; the university benefits by earning interest on the bond and ultimately collecting the principle; and the donor helps his alma mater and earns a charitable tax deduction. Large bonds are preferable, but even the purchaser of a $36 bond could make a donation to a university fund (with the caveat that some universities may have rules about minimum donations and the types of securities they accept).
It would be even more appealing if the same university agreed to buy a $25,000 bond from its endowment (more or less the way a matching program works). The university gets a contribution that will ultimately be worth $50,000 plus interest, and Israel gets $50,000. Win-win for everybody.
If the $25,000 bond could be earmarked either for an endowment or direct funding for Israel Studies (or an Israel-related program through Jewish studies), the investment is a win-win-win.
Better still, if some of the money from the Bond is used to support study/research abroad in Israel, the donor will facilitate the invaluable experience of a scholar or student spending time in Israel. This, my friends, would be a win-win-win-win for Israel.
An even better outcome for universities and Israel Studies programs would be if donors contribute Bonds that are close to maturity. If those are donated, the departments could cash them in much sooner than a newly purchased bond.
If money is earmarked for Jewish studies, a strong message is sent to the university that donors are committed to promoting cooperation with Israel, scholarly research about Israel and opportunities for students and scholars to travel to Israel. The university would send an equally clear message that it is committed to academic freedom.
What’s in it for a university to create a matching program?
- Bonds are a good investment.
- New donors who care about Israel may be encouraged to contribute to the university and existing donors would have an incentive to increase the size of their contributions.
- A university with a matching program would have a competitive advantage over those that do not.
Buying and contributing bonds to a university will show it that it can benefit from upholding its own values of academic freedom and intolerance for antisemitism. It can also attract the many students interested in Israel Studies, foster collaboration between faculty in the US and in Israel and build ties between American and Israeli universities.
Dr. Mitchell Bard is the author/editor of 24 books including the 2017 edition of Myths and Facts: A Guide to the Arab-Israeli Conflict; The Arab Lobby, and the novel After Anatevka: Tevye in Palestine. This article was originally published by The Times of Israel.