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

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Date: 
October 17, 2011
 
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.”
 
 
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.
 
 
 
 Data Sources:
 
  • 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:
     
  • 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
 
 
 

 


[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