Charity Coalition Urges Government to Scrap Antiterrorism Guidelines

A coalition of nonprofit organizations has called on the U.S. Department of the Treasury to scrap new guidelines designed to help prevent foundations and charities from unwittingly financing terrorism.

The voluntary guidelines, unveiled by the Treasury Department in December, are a revised version of rules issued in 2002 that drew criticism from nonprofit groups.

In response to complaints from charities that the guidelines could discourage their work abroad, Treasury Department officials met with nonprofit leaders and invited them to propose alternatives.

But the coalition of more than 40 groups said the revisions fall short and in some cases create new complications.

The groups are asking the government to withdraw the guidelines and replace them with a set of principles that the coalition released in 2005 to guide the antiterrorism activities of charities. The coalition includes foundations, legal experts on charities, and several watchdog groups, in addition to organizations that work overseas.

Robert L. Buchanan, director of international programs at the Council on Foundations and the coalition’s coordinator, said of the revised guidelines: “Although there was some improvement, they weren’t a step forward.”

Key Issues

The coalition has raised three main objections to the new guidelines. First, it said that the rules paint charitable organizations as a part of the government, which could undermine trust for U.S. charities working overseas and endanger humanitarian workers.

In addition, the group said the guidelines would create more work for charities in collecting information about employees or grantee organizations. For instance, the new guidelines suggest that charities collect data on all the branches of a grant recipient’s organization, rather than just its principal place of business, said Mr. Buchanan.

Finally, the nonprofit organizations said it was unclear whether nonprofit groups are required to follow the guidelines. They questioned why the guidelines were published in the Federal Register if they are voluntary.

Despite the objections, the coalition did see some improvements in the new rules, including the elimination of a recommendation that organizations look into the banking relationships of grant recipients to determine if they are involved in money laundering. The new guidelines also clarify that charities need not adopt all the recommendations, but should make decisions based on how vulnerable they are to terrorist activities.

The coalition is calling on the Treasury Department to use the charities’ “Principles of International Charity,” which it drafted at the request of the Treasury Department, in place of the new guidelines.

In response to the complaints from the coalition, Molly Millerwise, a spokeswoman for the Treasury Department, said that the agency had no intention of creating the impression that charities are part of the government and that it was merely providing advice for how charities could better carry out their work. She emphasized that the guidelines for the most part are voluntary.

“To the extent that the guidelines have any ‘mandatory’ provisions, it is only insofar as restating charities’ existing obligations to comply with U.S. law,” she said.

Ms. Millerwise said the Treasury Department will continue to work with nonprofit organizations to ensure that the guidelines are effective and relevant.

“While we do not intend to withdraw the guidelines, we do intend for them to be as valuable as they can be to the sector,” she said.