Is your company supporting terrorism? - Corporate Charity

USA Today (Society for the Advancement of Education), August, 2003

You want to be a good corporate citizen, but it's difficult these days. Once upon a time, you encouraged employees to give to worthy nonprofits, matched their contributions, received a nice tax break, and trusted that you were helping make the world a better place. No longer. Today, a controversial piece of legislation called the USA Patriot Act of 2001 is causing a big dilemma for corporations. It raises the possibility that if you unwittingly give to a charity that supports terrorism, you could be charged with criminal activity.

USA Patriot stands for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism." Its official goal is "To deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes." Good intentions aside, the ramifications of this bill--specifically as it affects people and organizations who never intended to support terrorism--have many businesses worried.

"Suppose one of your employees makes a donation through your corporate matching program, and unbeknownst to you, that charity then funneled money to a terrorist group or an individual who's been designated a terrorist by the U.S. government," says Craig Wichner, chief executive officer of KindMark, a provider of integrated online corporate giving solutions. "It's possible that your company could be held liable. It may not matter that neither you nor your employees knew they were supporting terrorism.

"Furthermore, even if you aren't ultimately convicted, just being charged with supporting terrorism could cause untold amounts of damage. The fact that you were eventually acquitted would be of small consolation if you've already been harmed by negative [public relations], boycotts, or legal bills. The solution is to prevent such a disaster before it happens."

So what's a caring corporation to do? Well, don't quit giving--the benefits of corporate philanthropy far outweigh the risks. According to Wichner, the best course of action is to initiate "due diligence" on every charity you support. A screening process that ferrets out terrorist financing, fraud, and corruption is needed.

Wichner offers the following tips:

* Screen all charities before including them in your approved matching or direct grant database. Prequalify these charities based on your internal policies as well as checking them against known terrorist link resources such as the OFAC (Office of Foreign Assets Control) list.

* Investigate charities you have made grants to in the past, not just those that are new to you. Even if you think you know the organization, somewhere down the line there may be a link to terrorism.

* Insist that charities actively acknowledge adherence with your internal policies--in areas such as Patriot Act compliance, nondiscrimination, overhead costs, lawsuits, religious policy, etc.--on an annual basis. Having clear policies around screening can help in the event that your affiliation with a charity is questioned.

* Reaffirm the status of each charity prior to every funding cycle. This may necessitate doing so four to 12 times a year, depending on whether your company offers payroll deduction for contributions. Remember, diligence isn't the key word in due diligence for nothing!

* Offer a fair and open appeals process for nonprofits identified as problems or exclusions. Screening software can contain inaccuracies, and human beings can make mistakes. If this sounds like a lot of work, it is. For a corporation that donates millions of dollars each year, it would be overwhelming indeed. That's why Wichner recommends hiring an outside entity to handle the multiple steps and repetitive tasks involved in ensuring the integrity of your contributions. "Companies have told us that they don't have the staff to do the necessary screening, and yet they want to maintain their charitable giving traditions and protect the successful brand image they have worked hard to develop. Managing all the details involved in corporate giving has always [been] a big job, and the Patriot Act is one more reason that companies are turning to experts for help."