Anti-Terrorist Guidelines: Revised Best Practices for Charities

The U.S. Department of the Treasury released a revised version of its Anti-Terrorist Financing Guidelines:  Best Practices for U.S.-based Charities (the "Guidelines") on September 29, 2006.  According to the accompanying Treasury press release, this latest version takes into consideration "the comments and suggestions provided by the public to assist the charitable community in efforts to safeguard itself from the threat of abuse and exploitation by terrorist organizations."

Compliance with the Guidelines, the original version of which was first issued by Treasury in 2002, is voluntary, not mandatory.  A working group of charitable sector organizations and advisors, coordinated by the Council on Foundations, requested that Treasury withdraw the 2005 version of its Guidelines and endorse in their place the group's own Principles of International Charity.  Reaction to the latest version will be detailed in future posts.

Among the criticisms of the 2005 version of the Guidelines is the $250,000 annual gross income threshold for an audit.  In Treasury's Response to Comments Submitted on the Guidelines ("Treasury's Response"), Treasury explains that this figure "is drawn from the June 2005 final report to Congress of the Panel on the Nonprofit Sector [the "Nonprofit Panel"], convened by Independent Sector, and is thereby consistent with [the] industry's suggested threshold."  This explanation is misleading because the Nonprofit Panel set the amount of $250,000 as the threshold for requiring a financial statement review rather than a full-blown audit, which the Nonprofit Panel recommended should be mandatory at a $1,000,000 threshold.  The Guidelines' $250,000 audit threshold remains unchanged.


Click here for the September 29, 2006 version of the Guidelines.
Click here for Treasury's Response.