JERUSALEM — Yossi Beilin has a reputation for shooting from the lip.

And when representatives from the S.F.-based Jewish Community Federation met with Israel's minister of justice in the Knesset last month, he did it again.

Keep your philanthropic dollars at home, Beilin told them. Pay more attention to your own Jewish community. Give your children a better Jewish education and send them to the Jewish state, as Birthright Israel does.

"I've known this guy for several years," said Wayne Feinstein, JCF executive vice president . "He's a bit of an agent provocateur. He puts out an extreme position in order to stimulate dialogue and debate."

The 24 representatives were in Israel to tour projects funded by the JCF in its partner city of Kiryat Shmona, as well as in Jerusalem and Tel Aviv. The projects include a youth center, a women's forum, a leadership program at a pluralistic high school and a bilingual school. The JCF's total price tag for these and other projects is almost $900,000, and that doesn't count toward the $6.1 million that the JCF funnels into Israel through various agencies.

"We are living in a different era," Beilin said. "Israelis know how to give money. American money should not be solving the problem of poverty in Israel, and Israeli money should not be solving the problems of America."

What Beilin said was a direct hit on the way most of the diaspora binds itself to Israel — through money. That began after the Holocaust. Annette Dobbs, a senior member of the JCF's Israel and overseas committee, remembers the shock of finding out what had happened to European Jewry during the war. Out of guilt and a desire to create a safe haven for all Jews, American Jews started sending money to Israel.

It's a model that continues today, with millions of dollars sent by Jewish federations, endowments and private donors to various agencies in Israel. For the most part, the money is distributed by agencies to programs in Israel, with contributors having virtually no say in where the money goes or how it is used.

It's a relationship that has traditionally served the needs of both parties. Israel gets money, and the diaspora gets a connection to the Jewish state.

But it's a model that has problems. "It makes us the parents and them the kids," said Dobbs a longtime supporter of Israel who founded the Israel and overseas committee in 1984. When she met with Beilin, she was in Israel for the 59th time.

"There's resentment because of the power that's being bought," said Liki Abrams, who was raised in Israel but now lives in Foster City. There's a feeling among Israelis that, "We're risking our lives and Americans come with money."

And that doesn't make for a healthy relationship.

"You'll never have a relationship that will survive the test of time if it's just based on money," said Sheldon Wolfe, who lives in San Francisco and has been a member of the Israel and overseas committee since its inception. But Wolfe, a pragmatist, believes that regardless of what Beilin says, Israel needs the money.

"Israel is still spending an inordinate amount of its gross national product on defense," he said. "Until that ends, the government doesn't have enough money to address social issues and close the social gap."

Foreign money is particularly critical now since Israel's fervently religious Shas Party is becoming more powerful, Wolfe said. With Shas in the coalition, greater access to government funds enables the party to provide social programs in poor areas, garnering votes and promoting its religious agenda.

In order to promote pluralism and egalitarianism in Israel, diaspora Jews must fund projects that support those values, Wolfe added. "If Israel is not a pluralistic, fair-minded, democratic society, American Jews won't be able to relate to it."

While other federations might be put off by Beilin's apparent rejection of American money, Feinstein says the JCF isn't. Beilin, he said, just wants the American Jewish community to create a new philanthropic model and to change the way it relates to Israel. The S.F.-based federation has already been taking those steps, he added.

"I didn't take at face value the notion that we should keep our money at home," Feinstein said. "Even during the course of the dialogue, [Beilin] modified that position. Beilin just wants to see the dollars focused differently. The relationship is more important than the dollars."

Developing that relationship began in 1984 when, under the direction of Rabbi Brian Lurie, the JCF established the Israel and overseas committee.

Its mission was to fund social projects for which Israelis identified a need, developing those programs in tandem with Israelis. Out of that partnership grew the Amuta, a volunteer advisory group of Israelis who work with the JCF.

The JCF also broke with long-standing tradition by reducing the amount it sent to agencies in Israel, instead redirecting it to specific programs. Later the JCF adopted Kiryat Shmona as a partner city and opened an office in Israel.

"The Amuta is such a brilliant idea. You have the Israelis do the homework to see where the needs are and to say where the money will make the most difference. It's a needs agenda. It's wonderful. No other [federation] in the country has this," said Abrams, adding: "Now we can be partners. Partnership is the key word."

Apart from his call for Americans to rethink their philanthropy, Beilin's remarks tapped into another sensitive area for the members of the JCF group — support for Jewish education at home. The heavy investment of U.S. federations in Israel often meant that local Jewish community projects were short-changed.

Eve Bernstein, who lives in San Francisco and will begin her two-year term as chair of the Israel and overseas committee this summer, sees Beilin's statements as concern, not derision.

"'I'm going to worry about you as much as you're worrying about me,'" is what she heard Beilin saying. "He's worried about the diaspora being less Jewish. We're worrying about the same thing."

Citing the high rates of intermarriage and Jewish dropout, Dobbs agrees that "we have to build our American Jewish community if we're to survive." Recognizing this, the American Jewish community has put much energy and money into revitalizing Jewish organizations, creating more Jewish day schools, increasing educational programs and providing summer youth trips to Israel.

Although the JCF has been in the business of funding projects in Israel for the past 16 years, it's a model that is constantly being re-evaluated, tweaked and changed.

Bernstein's goal is not only to establish more links between Bay Area Jews and Israelis, but to help Israelis improve their own lives.

"Most people don't have a clue about the social problems and the disparity between the rich and the poor [in Israel]," said Bernstein, who at times found Israel's domestic tensions and inequities overwhelming.

"It's hard to take care of each piece. We have to focus on what's important. We can make a difference, a small difference, but it can affect someone's life."