Dividing Government Funding – part II

Based on ruling 75043 of the Eretz Hemdah-Gazit Rabbinical Courts.

Case: The plaintiff (=pl) and the defendant (=def) are organizations that do overlapping work in strengthening the religious/social fabric of a certain city. Def was looking for a grant from the Department of Education (=DOE) and was missing a couple of eligibility components – the operation of a kollel and reaching a certain number of hours of community work. Def suggested to pl that they join forces so that def could be eligible, and they would give 25% of the funding to pl. They signed a contract with terms. In 2012, def received funding after much effort. [We saw last time that pl deserved 20% for their imperfect help in making that possible.] In 2013 they received no funding. In 2014 they negotiated terms of agreement but did not sign a contract. Def received 281,111 shekels, but the two sides could not agree on the amount due to pl. Pl claims they deserve the same 25% for 2014 as for 2012. Although pl did not provide a kollel for 2014 (someone else did), the main money received was for hours of activity, and the 25% is justified for pl’s contribution to that. Def argues that they should get paid only an hourly rate for the hours of public activity and that they had raised that contention before 2014.

Ruling: The Rama (Choshen Mishpat 333:8) rules that if an employer and employee had an agreement for a year and then the work continued after that point without agreement, the same conditions exist as in the previous agreement. In this case, due to the significant changes in what was being provided, we cannot assume the same payment. However, the basic logic of the original agreement, giving a percentage of the revenues produced, can continue.

There is no question that the element of the kollel is a major part of the equation, even though it does not receive a rating number regarding budgetary matters as other factors do. The kollel is at the base of garinim torani’im in general, which makes it important in receiving funding. It is also one of the most expensive parts of the group’s budget.

It is impossible to make an exact accounting of what part of the funding can be attributed to what element, but we arrived at an estimate that the kollel was responsible for 70% of the funding and the community hours at 30%. Giving pl 25% of the funding for that element comes to 7.5%. Because def raised in advance the difficulty in providing the same funding sharing to pl as previously and pl had said, "We will work it out," we will reduce the amount due to pl to 6.5% of def’s governmental funding.