Financial transfers from diasporic community to recipients in the homeland have long been a prime vehicle for fostering changes in identity - usually consonant with the world-view of the provider of the funds. A conceptual framework is proposed for the analysis of these identity-related flows. It identifies the components of national identity, specifies the major channels for the exertion of diaspora influence, and describes the fluctuation of this influence over time as the nation status of the homeland becomes more secure and established. Diasporic communities may not only be the result of international volatility but, through financial flows, may be an important stimulus for identity shifts and the changing role of the state in the international system. The case of Israel and the Jewish-American diaspora illustrates the validity of the suggested framework and its implications for international relations.