Wrong Way: Another Treasury Myth about U.S. Charities Busted

The Department of Treasury has continuously mischaracterized international U.S. charities as a national security threat since 2001. In his 2010 testimony before Congress, Daniel L. Glaser, the Deputy Assistant Secretary of Terrorist Financing and Financial Crimes at Treasury said that charities were “an attractive target for terrorist organizations” because “[u]nlike for-profit organizations, charitable funds are meant to move in one direction only. Accordingly, large purported charitable transfers can move without a corresponding return of value.”

A printable PDF version of this chart available here

As you can see by the findings in the bar chart, charities are not alone in sending money overseas with little or no economic return back to the U.S. In fact, unlike some of these areas (e.g. online gambling and remittances) that have little or no record of where the money goes, U.S. charitable groups and foundations must comply with Internal Revenue Service and state and local reporting requirements. It’s time for Treasury to get their facts right and let U.S. humanitarian and development groups do their work.

money transfered out of US in billions graph

Data Sources:

1.	Afghanistan	$2,755,671,228	6.	Kenya	500,427,374
2.	Pakistan	1,351,634,685	7.	Sudan	462,877,610
3.	Haiti	701,379,625	8.	Jordan	363,375,929
4.	Israel	596,529,460	9.	Ethiopia	350,258,089
5.	West Bank/Gaza	387,120,025	10.	Georgia	339,465,998

11.	South Africa	347,449,184	16.	Iraq	220,524,820
12.	Egypt	320,115,027	17.	Indonesia	262,002,937
13.	Nigeria	295,792,542	18.	Congo	163,325,098
14.	Tanzania	312,689,352	19.	Mozambique	234,429,203
15.	Uganda	269,467,038	20.	Liberia	229,133,134

Large U.S. foundations spent about $6.7 billion in 2009 on both direct giving to overseas recipients and funding for U.S.-based international programs. http://foundationcenter.org/gainknowledge/research/pdf/intl_update_2010.pdf
The U.S. is the largest single source of remittances to developing countries around the world. The State Department says at least $60 billion is sent to Latin American countries each year. http://blogs.state.gov/index.php/site/entry/bridge_power_remittances
As much as $31-60 billion in U.S. funds has been lost to waste and fraud in Iraq and Afghanistan over the past decade through lax oversight of contractors, poor planning and payoffs to warlords and insurgents, according to an independent panel investigating U.S. wartime spending estimates. http://www.wartimecontracting.gov/
Top 20 countries receiving USAID grant money for FY2010:

http://www.usaid.gov/policy/budget/money
An estimated 16 million Americans engage in online gambling, wagering more than $6 billion in 2008 on offshore websites. These sites are out of the reach of U.S. law enforcement and are not taxed by the U.S. government. http://articles.philly.com/2011-10-16/business/30286401_1_online-games-online-gambling-internet-gambling
KPMG estimates the amount of money illicitly raised through drug sales in the U.S. being sent to Mexico is at about $25 billion. This is from Money Laundering and Bulk Cash Smuggling: Challenges for the Mérida Initiative, Woodrow Wilson International Center for Scholars, May 2010. Available at http://www.strategycenter.net/docLib/20101113_MoneyLaundandBulkCash_Farah.pdf. This report cites: Raúl Sierra, “Evolución y Situación Actual de la Prevención de Lavado de Dinero en el Sistema Financiera Mexicano,” KPMG, April 2006.

[1]Testimony of Daniel L. Glaser, Deputy Assistant Secretary, Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury before the House Committee on Financial Services Subcommittee on Oversight and Investigations on May 26, 2010. http://www.house.gov/apps/list/hearing/financialsvcs_dem/final_glaser_testimony_on_charities.pdf

Advocating For Nonprofit Rights Since 2009
DONATE

BECOME A MEMBER

Follow Us

Wrong Way: Another Treasury Myth about U.S. Charities Busted

Share This

Follow Us