A group of more than 40 U.S. nonprofits has drafted a set of principles in response to federal government guidelines for charities funding international work.
In 2002, the Treasury Department issued “Anti-Terrorist Financing Guidelines: Voluntary Best-Practices for U.S.-Based Charities,” with the goal of curtailing charitable dollars being unwittingly diverted for use by terrorists.
Nonprofits agree that charitable funds should be used only for their intended purposes, but believe some of the federal guidelines are not practical or appropriate, and could dampen international giving, says Washington, D.C.-based Council on Foundations, a member of the working group.
In response, the group developed “Principles of International Charity,” a set of eight principles to help ensure that charitable dollars are being used properly.
The principles include requiring nonprofits to engage in only the charitable activities for which they were chartered, and to follow all applicable domestic and foreign laws, and reiterate that nonprofits are not enforcement agencies for U.S. or overseas laws.
The document also assigns responsibility for adherence to laws, and for compliance with the principles developed by the group, to the board of each individual nonprofit.
The principles address fiscal responsibility, suggesting nonprofits develop written agreements outlining the terms of grants, monitor those grants and correct any misuse of funds by grant recipients.
The working group includes nonprofit agencies, foundations, corporations, watchdog groups, legal advisors and nonprofit industry associations.
The Treasury Department is expected to rewrite its guidelines to incorporate key portions of the working group’s document, the Council on Foundations says.