In March 2005 the Treasury Guidelines Working Group , a broadly representative group of U.S. nonprofits and grantmakers, released the Principles of International Charity (Principles) as an alternative to the Department of the Tresaury’s the Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-Based Charities. (The group has called the Guidelines ill-advised and potentially harmful, and called for their withdrawal.)
The Principles are designed to more “accurately reflect the diversity of due diligence procedures that effectively minimize the risk of diversion of charitable assets.” The Principles take into account the different ways that charities and foundations operate and recognize that there is no one set of procedures for safeguarding charitable assets against diversion to terrorists. The Principles stress the importance of due diligence and financial controls.
The preamble to the Principles notes that “Charitable organizations have vast experience in overcoming the difficulties associated with carrying out charitable work in distant lands. Some challenges are merely inconvenient: language barriers, cultural differences, technological limitations. Others—disease and hostile fire—may be deadly. Somewhere along this continuum have always been those threats posed by persons and organizations— whether donors, employees or recipients—that view legitimate charitable organizations, along with banks and businesses and virtually any other source of funds, as the unwitting financiers of non-charitable private interests. Charitable organizations have successfully addressed these challenges through attention to procedures designed to reduce the risk that charitable assets would be used for noncharitable purposes. Some of these procedures are mandated by the U.S. tax law, and others are determined by individual organizations’ assessments of the demands of their charitable activities.”
The Fundamental Principles, listed below, are followed by ten pages of commentary that further guides international charitable operations. The principles are: