Senate Hearings Stress Value of International Aid, Highlight Nonprofit Banking Woes

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May 10, 2017

Two Senate committee hearings in early May highlighted the importance of philanthropy and international aid, as well as the challenges faced by nonprofits in accessing banking services to finance that aid. 

On May 3, the Senate Foreign Relations Subcommittee on Multilateral, International Development, Multilateral Institutions, and International Economic, Energy and Environmental Policy held a hearing on "Global Philanthropy and Remittances and International Development." Speakers included InterAction CEO Sam Worthington and leaders in global philanthropy. Worthington described ways the U.S. government could improve partnerships with nongovernmental organizations (NGOs), including recognizing NGOs as donors, and leveraging private actors to give NGOs a diplomatic space in which to operate. He noted that 70 percent of international development response in Nigeria, Yemen, Somalia and South Sudan is performed by NGOs. 

Worthington also advocated for de-banking regulations, explaining that banks implement de-risking measures that legitimately reduce the improper management of funds, but also increase the challenges for NGOs and households to transfer money internationally. Responsible NGOs should bot be categorized as high-risk by financial institutions, he said. 

At the same hearing, Una Osili, professor of economics and director of research for The Lilly Family School of Philanthropy at Indiana University, said that cross-border philanthropy is subject to stricter oversight to reduce the risk of funds falling into the hands of terrorist organizations, but that these same regulations and reporting requirements constrict the ability of philanthropic actors to address global challenges. 

A May 4 hearing in the Senate Foreign Relations committee focused on "International Development: Value Added through Private Sector Engagement," with a panel of speakers from companies such as MasterCard, Coco-Cola and Starbucks. At the hearing, Sen. Ben Cardin (D-MD) called foreign aid critical to promoting the power of democracy and the importance of human rights, creating a world that is safer for the U.S. Former Rep. Jim Kolbe (R-AZ), honorary co-chair of Modernizing Foreign Assistance Network, likewise noted that foreign assistance is critical to combating terror, aiding failed states and continuing improvements made in developing countries. 

Listen to the May 3 subcommittee hearing. 

Listen to the May 4 committee hearing.