How war on terror hits charity

These terms are open to interpretation. For example, organizations trying to provide assistance to the millions of Sri Lankans in areas controlled by the Tamil Tigers, a named terrorist organization, have little choice but to "deal with" this group, at least to provide safe passage for personnel and materials.

Likewise, in many countries, local human rights NGOs and election monitors are regularly - and falsely - accused by their political opponents of supporting radical organizations or violent opposition groups, and therefore may be "implicated in questionable activity."

The guidelines expect private funders to function as bank regulators. In addition to determining the identity of all the financial institutions in which prospective grantees have accounts, grantmakers must obtain references to determine if the financial institution is "a shell bank operating under an offshore license," in a jurisdiction "that has been ... non-cooperative in the international fight against money laundering, or that lacks adequate anti-money laundering controls and regulatory oversight." Making such determinations is far beyond the competence of most involved in international philanthropy.

Perhaps most important, the new requirements risk undermining cooperative relationships between US organizations and their overseas partners. The guidelines assume that comprehensive information is available about nonprofit organizations worldwide, as it is in the US. Unfortunately, that's not the case. Excessive and unrealistic due diligence requirements will ultimately destroy relationships of trust and the ability of US foundations to operate freely and effectively. Under cover of the war on terror, some governments are likely to see the guidelines as a convenient rationale for increased scrutiny and control over foreign and domestic nonprofit organizations.

Clearly, prudence is required in selecting grantees, but well-managed international philanthropic organizations, particularly grant-makers with offices abroad, know their grantees and exercise careful oversight and financial controls. They're steadfastly committed to ensuring that their funds never fall into the hands of those who wish us harm. We welcome the current IRS review of international grantmaking practices, in the expectation that taking into account the views of experienced international grantmakers will result in revised guidelines that recognize the important contributions of private philanthropy to our national interests, while meeting our country's legitimate security needs.

• William P. Fuller and Barnett F. Baron are the president and executive vice president, respectively, of the Asia Foundation, a private, nongovernmental, grantmaking organization.

Page: 1 | 2