Mathew Levitt’s June 13, 2010 blog is full of unsubstantiated claims and flawed assumptions about the U.S. charitable sector’s commitment to counter terrorism, as was his testimony before Congress in May. Riddled with errors and ambiguities, his sweeping statements about the U.S. charitable sector’s commitment to counter terrorism demonstrate how little he understands the operations, ethical standards and programs of U.S. nonprofits. It borders on the insulting, and demands a correction for the record.

Levitt’s blog refers to exploitation of charities by terrorists, and then goes on to say, “To avoid this deadly exploitation, all nonprofit organizations must tighten their controls.” This sweeping statement assumes that all nonprofits are currently lacking in sufficient controls to avoid, identify or correct diversion of their resources to terrorism. Nothing could be further from the truth.

But that doesn’t stop Levitt. In his testimony before Congress, he made the claim, referring to the charitable sector, that “They stress that due diligence on the part of charities is difficult and costly, and insist it has only limited value.” [p.10]  This statement has no footnote to identify who “They” are, or provide any factual support for this claim. After the hearing I told Mr. Levitt that I have never heard anyone from the nonprofit sector make such a statement. The fact that he repeats such unsubstantiated claims in his blog is irresponsible. If he is going to make such a serious accusation he should be willing to back it up with facts.

Perhaps Levitt is referring to criticism of Treasury’s Anti-Terrorist Financing Guidelines. If that is the case, he needs to acknowledge that there is a serious debate between Treasury and the U.S. charitable sector over the best way to prevent diversion of resources to terrorism and not about whether or not due diligence is important and worthwhile. This debate is fueled in part by the fact that current Treasury policies were developed by financial experts with no background in the complexities of providing humanitarian assistance in conflict zones. As a former Treasury official, Levitt has taken this lack of understanding into his analysis work in the private sector.

The truth is that the U.S. charitable sector takes the threat of terrorism very seriously. Since 9/11, U.S. charities and foundations have proactively developed and implemented enhanced due diligence procedures to prevent their resources from being used to benefit designated terrorist organizations.  For instance, in August 2008 Muslim Advocates launched the Muslim Charities Accreditation ProgramIt is designed to enhance the knowledge and ability of nonprofit leaders to meet the demands of governance, legal and financial compliance. The program is in partnership with the Better Business Bureau’s Wise Giving Alliance, a charity evaluation program that also promotes nonprofit best practices.

Other examples of due diligence, standards and best practices resources generated and used by the U.S. charitable sector include:

  • InterAction’s Private Voluntary Organization Standards, define the financial, operational, and ethical code of conduct for InterAction and its member agencies. With more the 180 members, InterAction is the largest coalition of U.S.-based international nongovernmental organizations.

  • Humanitarian Accountability Partnership, (HAP) founded in 2003, certifies members comply with the HAP Standard in Humanitarian Accountability and Quality Management, providing assurance to disaster survivors, staff, volunteers, host authorities and donors that the agency will deliver the best humanitarian service possible in each situation.”

  • Transparency International’s (TI) Preventing Corruption in Humanitarian Operations” Handbook of Good Practices includes ways to track resources, confront extortion and detect aid diversion.

There are more problems with Levitt’s analysis than can be addressed in one blog. We’ll follow up in future postings.