by Robert I. Evans and Avrum D. Lapin

Magen David Adom (MDA), Israel’s Red Cross, is accustomed to being a “first responder,” resolving crises of immense proportions. During the last few months it has been at the center of a storm of its own, created when formal relationships with its U.S. partner organization, American Friends of Magen David Adom (AFMDA), seemed to fall apart. Media attention has recently focused on the unexpected resignations of AFMDA’s executive committee. Allegations about financial mishandlings have gone back and forth across the ocean, with reports charging mishandlings and raising tempers to high levels.

Over the years, too, AFMDA has become one of the most successful Israel-focused fundraising efforts in the U.S., raising about $22 million annually, making it the largest of the MDA-related entities in the world.

We have worked with many other U.S.-based Israel-focused non-profits seeking to raise philanthropic dollars from Americans, so we were especially curious about the MDA/AFMDA’s situation, and more importantly to understand the steps they have been taking to ensure that a strong partnership continues.

To get some insight, we spoke with Arnold Gerson, newly appointed senior executive of AFMDA, who was quite candid and helpful in discussing what steps he and his leadership took and what to do when an organizational incident like this occurs.

Organizational disfunctionality usually develops when negative personal feelings impact on decision making, where there is a lack of clear goals and expectations, where open and consistent communication falls apart, or where cooperation to achieve common goals becomes cloudy. Leadership of many Israel-based non-profits often have unrealistic assumptions about how American donors think and behave and what they are looking for from projects and causes they might support. It is unclear if any or all of these impacted on the AFMDA situation but what has been true is that allegations have been made and tempers have flared.

According to Mr. Gerson, the AFMDA and MDA partnership seemed to have been reasonably strong when he assumed national executive responsibilities several months ago. He indicated that several Board members had led him to believe that they would be stepping down when annual elections took place in March 2011. He had not, however, expected a mass resignation, especially during protracted contract discussions with MDA leaders, where difficult contract negotiations involving projects to be supported and significant dollars were under way.

We cannot readily discern why the negotiations to renew AFMDA’s contract became so heated but clearly they escalated to a level that created significant disagreements about both substance, approach and style. We learned that behind closed doors, AFMDA Board members disagreed with certain steps being taken to re-shape the U.S. organization and to craft a new paradigm built on years of relationships and experiences.

We can speculate about possible changes in funding streams from AFMDA, the sole fundraising arm for MDA in the United States. The current model that many “American Friends” non-profits use involves dollar commitments from donors being forwarded to Israel based on various paradigms, but the other key issue revolves around substantiating the exact costs for work in Israel. AFMDA has an on-site staff in Israel to represent American donors and their intentions, an unusual but not untraditional approach to financial transparency. Organizations use various types of other accountable arrangements. The contract between MDA and AFMDA, however, calls for AFMDA to pay from its fundraising revenues for specific and pre-approved needs; MDA ultimately sends invoices to AFMDA and they are paid by AFMDA. A reasonably efficient and effective approach!

We asked Mr. Gerson about lessons learned from the current situation. He stressed the importance of building strong partnerships, and the critical nature of having a team mentality. Creating trust is the only way to successfully achieve an organization’s mission and vision and to ensure that both counterparts are working on synchronized and not parallel tracks, he noted.

From time to time, we see groups refusing to come together and see their roles as separate – protecting divergent interests. In all likelihood, relationships between and among previous executive and top leadership deteriorated; with a new leadership team in place in the U.S., the two organizations will hopefully work well together … again.

As this is being written, the AFMDA board has elected temporary officers to fill the unexpired terms of those who resigned last week. Announced was Mark D. Lebow, a prominent New York City attorney, as interim national chairman of AFMDA. We wish the new team well and trust that relationships between the leaders of both entities will be positive and consistent with MDA’s historic and meaningful mission.

Also, a contract extension is currently in place and a new agreement under negotiation. Hopefully this will set a path for the efficient and transparent forwarding of charitable dollars from U.S. donors to worthwhile projects in Israel.

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to eJewishPhilanthropy.com. EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.