The Crowdfunding Campaign for Deadly Israeli Military Drones

The war in Gaza has been good for the drone startup XTEND. Since October 7, the Tel Aviv company has pivoted to providing the Israeli military with cheap, nimble robot aircraft. This demand helped the company secure $40 million in new venture capital funding, bringing its total raised to $60 million. That money will go toward software refinements to better serve Israel’s Ministry of Defense, its co-founder and CEO Aviv Shapira touted in a press release.

Yet despite its venture capital bounty and recent military contracts, XTEND has also been asking for charity.

“Join Us in Supporting Israel’s Defense,” read the text on the Xtend-Support-Israel.com website, directly above a large “DONATE” button. All donations would be “used for the immediate production & deployment of life-saving systems for our IDF troops on the frontlines.” The site included a dazzling marketing montage of XTEND robots zooming across buildings, smashing through windows, and dropping what appears to be an explosive device from the air, “enabling soldiers to perform accurate maneuvers in complex combat scenarios.”

XTEND’s fundraising page — taken offline shortly after The Intercept raised questions about it — is one of several similar efforts soliciting charitable, tax-deductible donations to bolster Israeli national security.

U.S. law governing charitable contributions gives wide leeway to nonprofits operating overseas, though questions linger about directing such donations to fund combat.

XTEND did not respond to a request for comment and questions about its Israel Defense Forces fundraising campaign. The Israeli nonprofit AlmaLinks, which was listed on the site as participating in the fundraiser, told The Intercept that upon learning of the campaign it asked XTEND to take it down. A PayPal page for the fundraiser told American donors that tax-free contributions could be sent through the U.S.-based donor-advised fund FJC: A Foundation of Philanthropic Funds. FJC disavowed the campaign and said the drone startup was being instructed to cease and desist use of its name.

XTEND’s drones are flexible, affordable, and outfitted with powerful cameras, making them excellent surveillance tools that can stand in for human soldiers in dangerous situations. Certain models come with a claw, allowing them to drop any manner of item — or weapon — from high above. This functionality has proven transformative in the fighting between Russia and Ukraine. Even for Israel’s armed forces, among the best-equipped in the world, drones like XTEND’s offer the powerful advantage of an off-the-shelf, somewhat disposable miniature air force.

“Boots on the ground testimonials” included on the site leave little ambiguity about their use. “The best thing to have is drones,” says one uniformed Israeli soldier, his face blurred, in a video set before a house he states was recently cleared of terrorists. “Drones can go inside, do the search, clear the house, put even an explosive, instead of us going in.”

“We have killed dozens of vile terrorists, but we continue to constantly discover more terrorists who are hiding in buildings,” say soldiers in another testimonial video, who explain XTEND’s products are preferable because their radio uplink is not as easily jammed.

In interviews and marketing materials, XTEND tends to argue its drones are a life-saving reconnaissance technology that permit soldiers to hang back from danger while robots lead the charge. But the company is very much in the business of offense too. In December, XTEND told the Wall Street Journal that the IDF is using its robots to “drop grenades” in Gaza. “We were the first drones to enter Be’erik, Faraza, and deal directly (indoors, outdoors, and face to face) with these terrorists,” Shapira explained to the Israeli business publication Calcalist last year. “We learned so much from that.”

Israel’s war on Gaza has been integral to XTEND’s current success and its future, according to local business press reporting. Since the conflict erupted, the company has deepened its ties with the Israeli military.

An article in Calcalist announced a $40 million deal for XTEND, noting that the company had shifted its focus to developing systems for the IDF since the start of the war. The company’s decision to upgrade its activity in the military sector was highlighted in the announcement of the latest venture capital round on May 10. The funds raised would be used to improve the software of XTEND’s drones to better serve Israel’s Ministry of Defense tier-1 units.

Quadcopter drones similar to those produced by XTEND have been implicated in civilian deaths and injuries. A report by Euro-Med Human Rights Monitor described how the IDF has increased its use of small quadcopters to attack Palestinians in Gaza, dropping explosives and firing mounted rifles. One Palestinian recounted the killing of his cousin due to a quadcopter bomb.

XTEND solicited donations for its drones on a webpage listing AlmaLinks as the organization processing donations. The site mentioned that donations would be used for producing and deploying life-saving systems for IDF troops. XTEND’s CEO, Shapira, is listed on AlmaLink’s website as a member of its board of trustees. AlmaLinks stated that they were not aware of XTEND’s fundraiser and that Shapira does not have a decision-making role.

FJC: A Foundation of Philanthropic Funds is the fiscal sponsor for AlmaLinks, managing over $300 million in assets and providing over $400 million in grants worldwide. FJC accepts tax-deductible donations on behalf of AlmaLinks, which are then transferred to recipients like XTEND. Potential American donors were directed to a PayPal page confirming FJC as the recipient of funds earmarked for XTEND.

FJC CEO Sam Marks disavowed the fundraising campaign, stating that FJC had no relationship with XTEND and the company was not authorized to use FJC’s tax-exempt status for fundraising. The PayPal page was taken down following this disavowal.

XTEND did not respond to questions about the fundraiser and Shapira’s role on AlmaLinks’ board of trustees. Diala Shamas from the Center for Constitutional Rights questioned the appropriateness of using charitable donations to support a war effort, especially one that has resulted in civilian casualties. Shamas also raised concerns about complicity in war crimes in supplying equipment used in violation of international law. Even in the absence of nonprofit status, there would still be significant legal risks involved in this situation.

Legal experts have consistently highlighted the legal implications of using charitable contributions to support combat operations, especially during times of conflict such as the war in Ukraine. Charities that fund combat activities are in violation of charity laws, as supporting war fighting or killing individuals, even if deemed as “bad guys,” goes against the principles of charity law.

The U.S. tax code, coupled with the lack of oversight by the Internal Revenue Service (IRS), provides a level of flexibility to initiatives like XTEND. Despite the explicit mention of fundraising for drones on XTEND’s platform, the legal separation between the funds collected and the ultimate use of the money through FJC likely shields the campaign from legal repercussions.

Criticism has been directed towards U.S. nonprofits that funnel tax-deductible donations to settlements in the West Bank, which are considered illegal by the international community. This issue has gained renewed attention amid the surge in fundraising for the Israel Defense Forces during the conflict in Gaza.

Proposed legislation in New York targets nonprofits involved in funding the Israel Defense Forces, aiming to make it easier to hold such groups accountable through civil penalties. XTEND’s fundraising activities could fall under the scope of this legislation, as it seeks to address the role of nonprofits in supporting contentious causes.

New York Assemblymember Zohran Mamdani emphasized the need to prevent charitable funds from being used to support war crimes and genocide, highlighting the importance of tax breaks for encouraging charitable activities that align with humanitarian values.

XTEND’s fundraising campaign is just one of several drone crowdfunding initiatives linked to ongoing conflicts, exemplifying the broader trend of using technology for military purposes.

Mamdani stressed that fundraising for activities linked to potential genocide is illegal under international law, underscoring the necessity of investigating and addressing such actions to uphold ethical standards.

Overall, the article underscores the legal and ethical complexities surrounding charitable contributions and fundraising activities in conflict zones, emphasizing the need for transparency and accountability in charitable endeavors. Please rephrase this sentence.

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