Legal assault threatens NY nonprofit that has handled funding for anti-Israel groups
Wespac, a low-profile charity tied to leading activist organizations, is in jeopardy as it battles lawsuits across the US, including from its own insurer
Luke Tress is The Times of Israel's New York correspondent.
NEW YORK — On a sunny April morning in Chicago, a group of anti-Israel activists rushed onto an interstate highway leading to O’Hare International Airport. Irate drivers were stuck in traffic for more than an hour, their anxiety mounting as their flight departures approached.
One of the drivers who missed his flight filed a class action lawsuit against the activist groups that organized the protest — National Students for Justice in Palestine, American Muslims in Palestine, the US Campaign for Palestinian Rights, and a low-profile nonprofit in New York called Wespac.
The advocacy group, based in Westchester County, north of New York City, has handled funding for a range of leading anti-Israel activist groups around the US. Its status as a financial lynchpin for the protest movement has drawn a barrage of lawsuits that is threatening its existence, in a crisis for the group that deepened last month when it was sued by its own insurance company.
“This is not normal. I haven’t ever seen anything like this, but I haven’t ever seen anything quite as politically charged as this. This is huge,” Doug White, a longtime adviser for US philanthropies, said in an interview.
Wespac, a progressive nonprofit founded in 1974, has served as a fiscal sponsor for the protest groups, in a financial arrangement in which a nonprofit collects donations on behalf of other groups that do not have nonprofit status themselves.
For the pro-Palestinian groups, the fiscal sponsorship means they can receive tax-deductible donations and grants, without having to file the tax documents expected of nonprofits, such as laying out their operating budget, total assets and spending. The arrangement does not require the fiscal sponsor to detail the organizations it collects funding for, meaning the activist groups’ finances are murky, hard to track and closed to the public. Best practices recommend that nonprofits detail their fiscal sponsorships, but Wespac does not make its arrangements public.
Groups affiliated with Wespac have contributed to the harassment of Jews on college campuses, hosted events that supported terror groups, and targeted cancer patients, museums, memorials to the dead, transportation hubs and holiday events.
Following disruptive protests by its affiliates, Wespac was sued in at least five courts — in New York, California, Illinois, Virginia and Washington, DC.
In a January email to supporters, Wespac pleaded for financial assistance to fend off the legal offensive.
“WESPAC’s work has taken on enormous significance since October 7, 2023, as the injustice of apartheid has turned to genocide in Gaza,” the email said. “The well-funded forces of darkness are now waging legal warfare against us.”
The email said the group had received financial support from an “outside foundation,” but had lost that support, and needed $90,000 to cover its legal bills.
“The threat to WESPAC’s survival is real,” the email said. “Please give generously.”
During the O’Hare airport protest, activists stormed onto a highway offramp leading to the airport, blocking traffic and linking their arms inside PVC pipes to hinder their removal, according to the lawsuit. Traffic backed up for miles.
The O’Hare airport lawsuit alleged 12 counts against Wespac and the other defendants, including false imprisonment, highway obstruction and public nuisance.
In response to the lawsuit, Wespac sought defense and coverage from its insurer, the Alliance of Nonprofits for Insurance Risk Retention Group (ANI). The insurance firm said in a lawsuit filed last month that it was not required to cover Wespac’s legal bills, putting the group in further financial jeopardy.
The lawsuit, filed in the federal Southern District Court of New York, argues that ANI is not responsible for covering damages related to a client’s fiscal sponsorships. The case said Wespac had not notified ANI of its financial sponsorship of National Students for Justice in Palestine or paid extra coverage for the sponsored groups.
The filing also said that the activist groups had willfully blocked the highway, and the insurance policy did not cover damages caused by a riot, unlawful assembly or mob action. The lawsuit said defending and indemnifying Wespac in the O’Hare airport lawsuit would cost more than $75,000.
In addition to National Students for Justice in Palestine, Wespac has served as a fiscal sponsor for the Palestinian Youth Movement, the US Palestinian Community Network, the International Jewish Anti-Zionist Network, the Palestinian Feminist Collective, the Palestine Freedom Project, Adalah-NY, and Within Our Lifetime, the leading anti-Israel protest group in New York. The Anti-Defamation League said in a 2022 report that Wespac sponsored a total of 15 groups related to the Israeli-Palestinian conflict, far more than for any other cause. It is unclear how many groups it has sponsored in total.
Wespac does not make its fiscal sponsorships public, and it is unclear which activist groups it is still working with. The Palestinian Youth Movement has moved to a new fiscal sponsor, and several of the other groups no longer have a donations option on their website. National Students for Justice in Palestine collected donations through Wespac until at least July 2024, according to an archived web page, but soon after, it removed the donation page from its website.
Wespac did not respond to a request for comment on the lawsuits or its fiscal sponsorships. The group did not yet have representation in the ANI lawsuit.
White, a philanthropic adviser who has written five books about nonprofits, said it was fine for charities to take a controversial stand but that they should be open about their activities, especially for an issue as politically charged as the Israeli-Palestinian conflict. He said Wespac should be “aggressively transparent,” including by listing its fiscal sponsorships and laying out its reasons for pro-Palestinian activism.
“That’s not a political statement. It’s just a transparency statement regarding the role nonprofits play in society,” he said. “To me, it’s rock solid in terms of the obligation they have to be transparent and to explain themselves.”
White said Wespac appeared to be “trying to hide something,” and that there were solid grounds for the lawsuits, adding that he has never seen a case of a nonprofit insurer suing one of its clients.
If Wespac goes under, the anti-Israel groups would likely lose the funding donated to them through Wespac that they have not received yet and lose the ability to receive tax-deductible donations. Neither the donors nor the activist groups would likely have recourse to recoup the donations, White said. The groups would need to become independent charities themselves, or find a new fiscal sponsor to receive tax-deductible donations.
“They’d have to find another mothership to continue its work, and I suspect that they would probably not find one because Wespac, if that goes out, and it goes out for this reason, who else is going to do that?” he said.
Wespac took in $2.3 million in revenue, mostly from contributions and grants, between September 2022 and August 2023, the most recent period for which tax filings are available. That figure was more than double its revenue the previous year, and up sharply from the $411,000 it received in 2019-2020. On its tax forms, the group’s stated mission is “current affairs education.” Most of Wespac’s events are focused on domestic and local social justice and environmental issues.
In addition to the lawsuits, Wespac is under pressure from the federal government.
On Monday, the US Department of Justice said it had filed a statement of interest in the California case against Wespac and other defendants. The lawsuit alleges the defendants blocked access to a synagogue in violation of federal legal protections.
“Members of our Jewish community should not have to think about their safety when they go to worship,” Acting US Attorney Joseph McNally for the Central District of California said in a statement. “We make clear today that federal law prohibits people from obstructing access to places of worship.”
Last year, 16 Republican senators asked the Internal Revenue Service to investigate Wespac and other nonprofits that support National Students for Justice in Palestine. The senators’ letter said the agency should examine whether, by directing funds to the group, the nonprofits were supporting terrorism in violation of their tax-exempt status.
