Developing New Mechanisms to Promote the Charitable Sector


An important national security priority for every country is preventing the diversion of charitable assets for illegal purposes. At the same time, many Muslim charities and charities operating in Muslim-majority countries now confront significant handicaps in fundraising and in operating overseas. Donors who wish to support such charitable activities face a dilemma when assessing the qualifications of a particular charitable organization in what has been described as “a climate of fear.” Similarly, and in reaction to their own changing regulatory obligations, financial institutions are increasingly risk averse in dealing with Muslim charities.

The working group convened key stakeholders to consider these challenges to philanthropic giving and to develop practical solutions. Among the options considered in this review was the viability of an independent rating or evaluative organization that would produce public reports on individual charitable organizations, assembling purely objective information relevant to prospective donors. This includes, for example, information regarding governance, internal controls, accounting practices, primary donors and grantees, and participation, if any, in any public sector sponsored activities. While this paper attempts to reflect faithfully the discussions of the working group, specific recommendations represent the views of the authors.

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