Panel Explores Threats to Charity in the Post-9/11 Regulatory Environment - June 27, 2005 Vol.6, No.13

June 27, 2005 Vol.6, No.13:

Published: 06/27/2005

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See our background page on the Treasury Department’s Guidelines.

See the detailed summary of the panelists' remarks or view a full transcript.

See Foundations and Their Role in Anti-Terrorism Enforcement, Findings From a Recent Study and Implications for the Future, presented by Teresa Odendahl, of the Georgetown Public Policy Institute on June 9, 2005.

Panel Explores Threats to Charity in the Post-9/11 Regulatory Environment

On June 14 the Georgetown Public Policy Institute's Center for Public and Nonprofit Leadership (CPNL) hosted Safeguarding Charity in the War on Terror, a panel discussion on the impact of government anti-terrorism programs on the nonprofit sector. A diverse group of scholars and practitioners charged that the government's campaign against terrorist financing has proven ineffective, inefficient, and harmful to philanthropy and charitable programs.

Panelists included:

Teresa Odendahl, 2004/2005 Waldemar A. Nielsen Chair in Philanthropy, CPNL,
David Cole, Professor of Law, Georgetown University Law Center,
Nancy Billica, Political Advisor, Urgent Action Fund for Women’s Human Rights,
Daniel Mitchell, McKenna Senior Fellow in Political Economy, The Heritage Foundation, and
Laila Al-Marayati, Chairperson, KinderUSA.

The centerpiece of the government’s anti-terrorist financing campaign is the Treasury Department's Anti-Terrorist Financing Guidelines: Voluntary Practices of U.S. Based Charities. The Guidelines were released in November of 2002 in response to a request by Muslim charities for a set of due diligence standards that would help them avoid sanctions. Yet, far from offering guidance and a safe harbor, the procedures outlined in this document are widely regarded as unrealistic, impractical, costly, and potentially dangerous. Drafted and released without meaningful consultation with the nonprofit sector, the guidelines betray a startling lack of knowledge about domestic and international grant-making and the body of laws already in place to ensure fiscal responsibility and due diligence.

Odendahl opened the discussion with the charge that charities have been inaccurately identified as significant sources of terrorist financing and unfairly targeted in the war on terror. Cole gave an overview of the constitutional rights and freedoms at stake, noting that the war on terror has led to the erosion of freedom of association. Billica noted her concern that current policies lead to increased administrative burdens that have a disproportionate impact on small organizations with few resources. Mitchell pointed out that the government's campaign against terrorist financing fails a cost/benefit analysis: for the billions of dollars it has cost and the sweeping invasion of privacy involved, the effort has simply failed to yield significant results. Al-Marayati concluded the discussion by reporting the effects post-9/11 policies have had on the Muslim community, accusing the government of singling out Muslim organizations for investigation and prosecution. Click here for a detailed summary of their remarks.