Nov. 15, 2005 – Government efforts to disrupt the funding of terrorist groups are imposing a large burden on domestic charities by forcing the organizations to spend more money and time on compliance measures, essentially taking money away from its intended beneficiaries, according to a report released last week by OMB Watch, a nonprofit government watchdog.
The report charges that current Treasury Department recommendations of "voluntary best practices" are inefficient, directly threaten the nonprofit sectorâ€™s ability to administer services, and are, despite Bush administration claims otherwise, effectively mandatory.
Compiled following a June panel on the matter hosted by Georgetown University, the OMB Watch report documents a number of instances where charitable groups have been forced to close or curtail operations due to cumbersome Treasury guidelines and fear of prosecution. The report found that the guidelines, issued in response to a request by several domestic Muslim charities, are "unreasonable and counterproductive."
According to the report, four US-based Muslim charities have shut down and two more are under investigation for possibly running afoul of the guidelines.
In addition, the regulations, which are technically voluntary, the perceived need to implement the "best practices" is crushing smaller and newly established organizations under the weight of compliance, according to research presented to the panel by Theresa Opendahl, the Waldemar A. Nielsen, Philanthropy Chair of the Georgetown Public Policy Instituteâ€™s Center for Public and Nonprofit Leadership.
Other panel participants noted that charitable groups are operating under extreme caution due to an "increasingly uncertain and threatening regulatory environment."
At a Treasury-hosted roundtable on the issue last year, Department officials outlined a list of the "red flags" it uses to direct investigations into possible terrorist fronts, including the size of any given organization and whether or not it provides grant monies to overseas and third-world charities, OMB Watch said.
OMB Watch and several participating charities asked the government to withdraw the guidelines over many of the same issues found in last weekâ€™s report. The groups composed a revised set of suggested compliance regulations for the Treasury to incorporate into the existing standards, but the Department has yet to revise the rules, despite promising to do so.
"Ultimately, when the nonprofit sector is targeted, so are the people and communities around the world that depend on the relief and services they provide," the OMB Watch report said.