April 25, 2017 | The Cipher Brief

Hezbollah Fundraising Underscores its Financial Crisis

Hezbollah is ramping up its grassroots fundraising efforts with an intensive online outreach campaign aimed at making its revenue streams more resistant to U.S. pressure. The campaign indicates that Hezbollah – likely on advice from Iran – is seeking more financial autonomy from its Iranian patrons as they struggle under the weight of U.S. sanctions and the costs of military interventions abroad.

Tehran provides Hezbollah with approximately $200 million annually, but the group has never depended exclusively on Iranian support. Early after the group’s establishment in 1983, it created the Islamic Resistance Support Association (IRSA) – the official fundraising arm of Hezbollah’s military activities – to raise money domestically. Over the last few decades, the IRSA has distributed propaganda to win over the Lebanese population – particularly the country’s Shiites – and enlist their support in financing the group through fundraisers and charitable donations.

One annual IRSA fundraiser, the Equip a Mujahid Campaign, raises money to buy military gear for Hezbollah fighters. The latest installment of this fundraiser, which ran from February to early March of this year, was more aggressive than in the past and was accompanied by an extensive media campaign. According to the Lebanese press, prior to this year’s Equip a Mujahid Campaign, the last time that Hezbollah publicly appealed to the Lebanese populous to fund its military activities was four years ago, when the group first became openly involved in the Syrian civil war.

As part of the recent IRSA campaign, billboards bearing Hezbollah chief Hassan Nasrallah’s face and urging followers to contribute funds sprang up throughout Lebanon’s predominantly Shiite areas. The campaign appealed to religious sensibilities to get its followers to donate, using slogans like “financial jihad is a [religious] obligation,” and quoting sayings attributed to the Prophet Muhammad encouraging followers to ensure warriors are properly equipped. 

The IRSA’s message was simple: contributing is a religious duty and acts as a substitute for carrying arms oneself. In addition to bringing in money, IRSA’s messaging intended to reinforce solidarity between Hezbollah and its Shiite base, which has been feeling the brunt of the casualties of war in neighboring Syria. As IRSA officials have said, giving makes the donors feel as though they are participating in Hezbollah’s fight just as much as its foot soldiers.

But Hezbollah was not content appealing only to Shiites. Its most recent campaign included videos of Sunni, Druze, and Catholic clergymen endorsing the money drive and urging their co-religionists to donate.

The campaign appeared on various Hezbollah media outlets, and pointed potential donors from Lebanon and abroad to IRSA’s phone numbers for details on contributing. For the first time, Hezbollah used social media to spread word of its Equip a Mujahid campaign, complete with slick graphics, a dedicated Facebook and Twitter hashtag, and videos overlaid with dramatic music.

The campaign could not have come at a more urgent time for Hezbollah, as recent reports confirm that the group is experiencing a financial crisis. Iran’s expenditures on its direct and proxy regional interventions – particularly in Syria, but also in Iraq, Yemen, and Bahrain – are likely straining Tehran’s budget. Additionally, with the new U.S. Administration’s stated eagerness to impose additional sanctions on Iran, Hezbollah appears to be taking overall preemptive action to become more autonomous and ensure its survivability. Just days before Hezbollah launched this year’s Equip a Mujahid fundraising campaign, the U.S. Treasury Department imposed new sanctions on an Iranian government financier of the group. Thus, the campaign may indicate the success of these U.S. financial sanctions in hindering Iran’s ability to deliver funds to its Lebanese proxy.

Beyond feeling the squeeze of Tehran’s financial responsibilities, congressional passage of the Hizballah International Financing Prevention Act (HIFPA) in December 2015 has also hindered the group’s revenue streams. In mid-2016, Nasrallah defiantly said that the measures put in place by Congress would not affect his group financially. “Hezbollah’s budget, its salaries, expenses, and its food, drink, and weapons and missiles [are funded by] the Islamic Republic of Iran. As long as there is money in Iran, then we’ll have money,” Nasrallah said. Despite the banking sanctions, Hezbollah’s chief reaffirmed that Tehran’s funding would still reach his group, “just as the rockets with which we threaten Israel reach us, and no law is capable of preventing that.”

Yet this year’s campaign belied Nasrallah’s statements. Indeed, the group has described the banking sector’s compliance with the U.S. law as a “war of annihilation,” and even detonated a bomb outside of a major bank in Beirut last year as a warning. Nonetheless, it does not appear that Lebanese banks have eased their pressure on the organization. This is hindering Hezbollah’s Iranian cash-flow, leading it to turn domestically with the Equip a Mujahid campaign to fund military gear such as rifles, ammunition, uniforms, and canteens – the same types of supplies that Nasrallah had said Iran would cover. According to IRSA’s campaign, this gear costs $1,000 per fighter annually.

Finally, Hezbollah is now entering its sixth year of involvement in the Syrian civil war, with no end in sight. Paying the salaries of the 6,000 to 8,000 fighters it has in  Syria – estimated at $500 to $1,200 monthly per fighter– and caring for the families of the 1,500 fighters killed and 5,000 wounded in that war are straining the organization’s purse strings.

Hezbollah’s recent fundraising efforts show the benefits of U.S. financial pressure on the group – pressure that policymakers should continue. Analysts should watch carefully, however, as Hezbollah’s shift to direct, online, and grassroots fundraising will require more creative strategies to interdict. 

Yaya Fanusie is Director of Analysis for FDD's Center on Sanctions and Illicit Finance, where David Daoud is a research analyst. Follow them on Twitter @SignCurve and @DavidADaoud.


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