After seven years of meeting with Department of Treasury (Treasury) officials to amend the confusing and ineffective Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-Based Charities (Guidelines), a coalition of over 70 U.S. nonprofits have decided to end the engagement. On Nov. 8, 2010, a letter sent by the nonprofit organizations cited Treasury’s “unwillingness to make any substantive changes to its approach—or to recognize the important role of global philanthropy in increasing national security through funding to address poverty, inequality, disease, and other pressing needs” as the reason for ending the discussions. In a Nov. 22 press release, the nonprofit groups said they will continue their efforts to support and provide humanitarian aid overseas in a manner that is both effective and safe.
Organized in 2003 by the Council on Foundations, the Treasury Guidelines Working Group (Working Group) was composed of over 70 U.S. nonprofits included major U.S. foundations, charitable groups, nonprofit associations, and legal experts. The group had met periodically with Treasury officials to voice its concerns about the Guidelines, a series of recommendations from Treasury to U.S. nonprofits engaged in international aid or development. The Guidelines have been widely denounced by charitable groups and foundations as counterproductive and ineffective. Leaders in the nonprofit sector have repeatedly called for their withdrawal and replacement with the 2005 sector produced “best practices” document, Principles of International Charity.
The letter said, “As you are aware, the Working Group has long believed that the Guidelines are problematic, both substantively and as a matter of policy. For example, its central premise- that U.S. charities “continue to be abused and exploited by terrorist organizations, particularly those charities operating in high-risk regions of the world”- is vastly overstated. Nearly all of the examples of “abuse” described in the Annex to the Guidelines involve foreign charities.” According to Treasury’s statistics, charities and person associated with charities make up less than 2% of listed groups.
Other serious concerns about the Guidelines addressed its ambiguous “voluntary” nature. “Given the agency’s rulemaking function and coercive authority, its issuance of “voluntary” guidance can be confusing- if not misleading- because there is a danger that these aspirational standards will be viewed as black letter law,” the letter said. This was the case for a Michigan based charity, Life for Relief and Development after it had been raided by Joint Terrorism Task Force in September 2006. Despite the fact that no criminal charges were filed against the charity, the only bank that would approve the charity’s international wire transfers required compliance with the “voluntary” Guidelines.
With the majority of its recommendations resulting in little if any meaningful change, and a June 18, 2010 letter from Treasury dismissing the calls for withdrawing the Guidelines, the Working Group determined that it would no longer support or participate in Treasury’s attempts to impose current or future versions of the Guidelines on charities. “After considering our collective progress over the past seven years and giving much thought to views expressed in your letter, the Working Group has determined that further discussions regarding the Guidelines and related guidance would be unproductive,” the letter said.
According to the Chronicle on Philanthropy, a spokesperson for Treasury said the government was “disappointed” by the charities’ decision to end the talks.
A summary of a typical meeting between Treasury and sector representatives can be seen here.