Facing a $20 million budget deficit for 2008, the Jewish Agency for Israel is considering some major organizational changes that could lead to a revamping of its aliyah operations.

Responding to criticism of its bureaucracy and to the changing nature of immigration to Israel, the agency launched a multiyear strategic planning process in 2004 to streamline operations. The plan also called for diversifying the agency’s revenue sources.

But the dollar’s decline against the shekel has brought new urgency to the strategic changes, and this month agency officials proposed making major structural changes to the organization.

Last week the agency’s director-general, Moshe Vigdor, proposed splitting the organization into two operations: one in Israel and one in the diaspora, with the aliyah department being folded into one or the other or both of the new departments.

Vigdor also spoke of changing the agency’s focus to encouraging aliyah by choice, since aliyah by necessity practically has run its course, officials said.

When parts of Vigdor’s plan were portrayed in the Israeli media last week as a step toward reducing the agency’s focus on aliyah, Jewish Agency leaders rushed to issue a letter to their board of governors assuring them that immigration would remain one of the Jewish Agency’s core principles.

“We would like to emphasize that the aliyah department will not be closed,” agency chairman Ze’ev Bielski and president Richie Pearlstone wrote. “The department’s mission, which is no less relevant and important today as it was in the past, and perhaps even more so today, will continue to be the spearhead of our actions. Promoting aliyah is our top priority.”

Rather, the leaders explained, the changing nature of aliyah and the growing shekel-dollar gap were forcing the agency to explore new ways to position itself to promote immigration effectively and efficiently.

Vigdor’s suggestion constituted only one proposal, officials stressed, with others to follow.

“Frankly, the professionals are still trying to come up with other options,” said Jay Sarver, the co-chairman of the Jewish Agency’s aliyah and absorption department. “This is like starting the race before the rest of the field shows up. There are a lot of options that could come into play.”

Since last April the dollar has dropped to 3.5 shekels from 4.2 shekels. The Jewish Agency raises most of its $314 million budget in dollars but spends mostly in shekels or Russian rubles, so the agency estimates it will face a $20 million shortfall this year.

The Jewish Agency is funded primarily by the North American Jewish federation system, Keren Hayesod in Europe and grants in excess of $40 million per year from the U.S. government.

Despite its recent struggles, the agency was awarded the Israel Prize this week — the nation’s highest civic honor — for “shaping the face of Israeli society, in settling the land, in absorbing immigrants, in education, in revitalizing neighborhoods and in creating the groundwork for the state.”