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Hamas Fundraising & Revenue-Generation
And counter-financing opportunities
Hello all, I’m writing this newsletter to you in the context of the ongoing conflict in Israel / Gaza. What a week it’s been. I’ve had many questions about Hamas finance over the last few days, so the team and I are working on a series exploring that. Today, we’ll talk specifically about Hamas fundraising & revenue generation, and in future articles, we’ll look at how the group uses, moves, stores, manages, and obscures their funds. Each of these mechanisms presents different counter-financing opportunities, so they’re important to analyze separately. This is developing analysis, so please check back frequently for updates — we will add new information and refine our analysis as information becomes available. As always, I appreciate you sharing this newsletter with anyone who might be interested or find it useful.
Need a primer on Hamas? Terrorism expert Matthew Levitt was on Power and Politics yesterday providing much-needed context. Well-worth a watch:
Hamas Fundraising & Revenues
Hamas has both a large amount of revenue, but also a large number of expenses, as the group is responsible for the provision of services in Gaza. The group might have revenues as high as $590 million per year, but only a small part of that is likely allocated to military / terrorist activities. The rest is likely allocated to organizational financing (group maintenance) and service provision; however, as the events of the last few days have shown, Hamas has ample money to launch large, coordinated, and deadly terrorist attacks.
Hamas raises funds primarily through donations: from state sponsors (Iran), wealthy donors, and identity-based support networks. Historically, funds raised from Iran have ranged from $22 million to $70 million per year.1 Today, Iran is believed to provide some $100 million annually to Hamas, Palestinian Islamic Jihad, and other Palestinian groups, although the bulk of this likely goes to Hamas. Funds transferred from the Iran’s Islamic Revolutionary Guards Qods Force (IRGC-QF) are likely provided directly to Hamas’s armed wing, the Izz-Al-Din Al-Qassam Brigades.
Wealthy donors, particularly from the Gulf region, have also provided money to Hamas. Israel has allowed Qatar to provide hundreds of millions of dollars in humanitarian assistance through Hamas, while other states have provided aid money through the Palestinian Authority or United Nations agencies (Hamas will more directly profit from aid sent directly through their organizational structures). Turkey has also been accused of funding Hamas’s terrorism, including through aid diverted from the Turkish Cooperation and Coordination Agency. Hamas has also collected over $40 million through cryptocurrency donations over the last two years as well, although it’s unclear if these are state-backed donations or donations from identity-based support networks (a combination of the two is likely). Hamas has been building its cryptocurrency capability for years, although Israel has also had some success in countering this, particularly through the seizure of nearly $850,000 in 2021.
Hamas also taxes commercial activity in Gaza, and draws on donations from Palestinians overseas (some of which might be remitted through cryptocurrency transactions).2 Part of Hamas’s commercial taxation activity is of the group’s own creation. They established tunnels through which they moved goods, circumventing the official crossing into Gaza from Egypt. These goods were sold and taxed, the proceeds from which further sustain the group. Since the re-opening of the official crossing in 2018, Hamas is believed to have collected upward of $12 million per month from taxes on Egyptian goods imported into Gaza. In 2022, Hamas began to experience a budget crisis. High fuel prices had created a budget deficit such that the group could only cover 60% of employee salaries, and tax revenues of the Hamas government amounted to no more than roughly $40 million per month ($480 million per year), still a significant increase over earlier taxation estimates.
Some of the funds Hamas raised was a combination of taxation and trade-based value movement schemes, described in our article from 2018:
Hamas also raises funds from its investment portfolio. Over the years, the group has accumulated roughly $500 million in assets from which it can draw. A conservative withdrawal rate of 4% would result in yearly income of $20 million. These funds are also likely allocated to the group’s military arm.
Hamas and Charities
There have been many allegations made against Palestinian charities in the West and their support for Hamas. For instance, the Holy Land Foundation for Relief and Development allegedly collected $57 million between 1992 and 2001 for Hamas. Members of the foundation were found guilty of 108 charges of illegally funneling $12 million to the group.3 However, the actual guilty verdict was not based on evidence that Holy Land Foundation directly funded terrorism. Instead, the members of the organization were found guilty of having provided money to zakat (charitable) committees in the Palestinian territories. These committees were found to have been controlled by Hamas, even though they were engaged in charitable works such as building hospitals and providing for orphans. The prosecution successfully argued that due to the fungible nature of money, the provision of this support, even charitable in nature, freed up money for the terrorist group to use for specific terrorist activities.4
More recently, the head of World Vision Gaza was found guilty of diverting up to $50 million (£41.5m) of donations to Hamas; however, the entire budget for the group in Gaza was only $22.5 million; other irregularities have also raised questions about the case.
Charities and not-for-profit organizations throughout western countries that provide aid to Gaza have been under scrutiny for potential Hamas financing. However, in many of these cases, links are circumstantial or poorly corroborated, so careful analysis is required when determining which charitable organizations, if any, are truly supporting Hamas.
Countering Hamas Fundraising
The main methods that Hamas uses to raise funds are relatively difficult to counter. Iranian support (and that of other states) is best tackled through a combination of diplomacy (asking nicely) and coercion (sanctions). While some states might be inclined to stop or reduce their support for Hamas following the attacks, other states such as Iran are less likely to do so.
While identity-based support networks do not provide the bulk of Hamas’s funds, these can be tackled through a combination of designation (there are countries in the world where Hamas is not a listed or designated terrorist entity), and enforcement of those designations. Investigating and disrupting donation networks to Hamas will not have a profound effect on the group, but will help to reduce their disposable income.
Countering Hamas’s taxation schemes is also a fraught exercise. Because the taxation occurs in Gaza, reducing the taxation base would seriously impact the economy, which in turn will cause serious suffering to civilians in Gaza.
Hamas’s investment income might be less resilient against counter-terrorist financing efforts. Many of the assets that the group holds are held outside of Gaza (particularly in countries such as Turkey and Syria). This means that these assets can be seized or frozen, or the revenues that they generate could be intercepted before they make their way into Gaza.
While charities might be providing some funds to Hamas, this is likely a small amount. However, states would be well-advised to take a close look at charities providing funds to Gaza and ensuring that those charitable and not-for-profit organizations are only providing funds to qualified groups and individuals.
Unfortunately, Hamas does not prioritize civilians or service provision in Gaza ahead of military capabilities. Any reduction in funds to Hamas will almost certainly first affect civilians before any reduction in Hamas’s military capabilities are realized. In some contexts, this might result in less popular support for a terrorist group; however, in the context of Israeli military operations, a reduction in social service provision is unlikely to reduce support for the group in the short term.
Other methods of tackling Hamas’s financing (such as disrupting fund movement schemes, as well as targeting wealth storage mechanisms) might be more effective at countering Hamas financing than simply focusing on their fundraising mechanisms.
For more on Hamas financing:
Jodi Vittori, Terrorist Financing and Resourcing, 2011 edition (New York, NY: Palgrave Macmillan, 2011), 73.
Daniel Byman, “How to Think About State Sponsorship of Terrorism,” Survival 65, no. 4 (July 4, 2023): 101–22, https://doi.org/10.1080/00396338.2023.2239060.
Vittori, Terrorist Financing and Resourcing, 73.
Marieke De Goede, Speculative Security: The Politics of Pursuing Terrorist Monies (Minneapolis: Univ Of Minnesota Press, 2012).