Keren Hayesod (also Keren ha-Yesod), the Palestine Foundation Fund, was established by the London Zionist Conference in 1920 to serve as the major fundraising division and financial institution of the World Zionist Organization (WZO), administered by a board of trustees appointed by the Zionist Executive and Jewish Agency. Its main office was moved in 1926 to Jerusalem, where it has been ever since.
During its inception, Keren Hayesod was the subject of a disagreement between the U.S. and European branches of the WZO. The former, headed by Louis Brandeis, argued for an economic approach in which the Keren Hayesod would raise funds for specific, economically practical projects. The Europeans, headed by Chaim Weizmann, argued for a broader approach in terms of participants and projects that would encourage the support of the Jewish masses and include a range of settlement activity. In the end, the European faction prevailed and the fund had the dual goals of settlement and fostering private-enterprise ventures. Until the establishment of Israel, Keren Hayesod was the major agency involved in financing immigration, absorption, housing, and rural settlement in the yishuv. It also purchased arms and paid for other expenses involved in Israel's War of Independence (1948). Since then, Keren Hayesod has encouraged business development in partnership with the private sector. In the United States, it functions as part of the United Jewish Appeal, raising funds for immigration and absorption and for services to the underprivileged in Israel.
Source: Gale Encyclopedia of the Mideast & N. Africa: Keren Hayesod