The information in this article is not legal advice, and is provided only for general informational purposes. The reader should be aware that the legal context for anti-terrorist financing is fast evolving.

The U.S. government has made it clear that it considers the nonprofit sector to be at meaningful risk of exploitation by terrorists and their networks.

A grantmaker could be penalized even if it did not know it was supporting a blocked entity or intend to do so.

The Financial Action Task Force (FATF), an international policy-making and standard-setting body dedicated to combating money laundering and terrorist financing, of which the United States is a leading member, has concluded that “the most commonly observed method and risk of abuse of non-profit organizations to support terrorism involves the diversion of funds.”

Less than two weeks after the September 11 attacks, President Bush issued Executive Order 13224  "Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism"

Charitable giving, including humanitarian support, is subject to the far-ranging restrictions of the executive order. Among other things, the executive order blocks the assets of any persons who willfully “assist in, sponsor, or provide financial, material, or technological support” for acts of terrorism or to designated persons. Individuals and entities “otherwise associated with” designated persons are also blocked.

Read the full article on counterterrorism regulations and philanthropy by Andrzej Kozlowski at PEAK Grantmaking