Obama's Cairo Pledge on Charitable Giving Rules Opens Door to Reform

President Obama's June 4 speech in Cairo had encouraging words for nonprofit organizations in the U.S. and around the world, as he recognized that U.S. charitable giving rules have made charitable donations difficult for Muslims and committed himself to working with American Muslims to resolve the problem. The Charity Security Network and Muslim Advocates each responded with statements pledging cooperation in developing new rules that protect and promote legitimate charitable programs and their donors, both Muslim and non-Muslim.

In opening his speech Obama said attacks on civilians by a small number of violent extremists has contributed to fear and mistrust between Islam and America. He went on to say that "So long as our relationship is defined by our differences, we will empower those who sow hatred rather than peace, those who promote conflict rather than the cooperation that can help all of our people achieve justice and prosperity. And this cycle of suspicion and discord must end." This new policy framework is welcome for charities and foundations, whose work can be an important vehicle for such cooperation.

In the speech's section on religious freedom Obama said:

"Freedom of religion is central to the ability of peoples to live together.  We must always examine the ways in which we protect it.  For instance, in the United States, rules on charitable giving have made it harder for Muslims to fulfill their religious obligation. That's why I'm committed to working with American Muslims to ensure that they can fulfill zakat." 
 
Zakat, the religious obligation to give to those in need, is one of the pillars of Islam. Muslim donors in the U.S. have been frustrated by indefinite freezing of assets when U.S. Muslim charities have been shut down by the Department of the Treasury, scrutiny from law enforcement about their support of charities and fear of being prosecuted if their donations go to charities that are later accused of supporting terrorism. Fear of being shut down, based on vague laws that provide no due process for accused charities, has had negative impacts throughout the U.S. nonprofit sector. Participants in the Charity and Security Network have made recommendations to reform these laws and policies.
 
The Charity and Security Network statement responding to Obama's remarks said, "In the U.S. our national security laws have made both zakat and the operations of charities more difficult for both Muslim and non-Muslim groups." As examples, it cited the overbroad definition of prohibited material support of terrorism, which conflicts with Red Cross standards of non-discrimination in aid and development. It also cited the fact that a "charity merely accused of supporting terrorism can be shut down by the Treasury Department and have its assets frozen indefinitely, with no opportunity for the charity to see the evidence against it or defend itself against the allegations before an independent tribunal." The statement also noted that an estimated $20.7 million in frozen funds, which includes zakat donations, remains blocked by Treasury.

The statement from Muslim Advocates said they welcome "the opportunity to work with the Obama Administration to reform policies begun under the Bush Administration that continue to create hurdles to the philanthropic community…" It called for withdrawal of Treasury's problematic guidelines for nonprofits, a new system for dealing with frozen charitable funds, and ending law enforcement policies that "probe law-abiding American Muslims about their charitable giving and associations with lawful, charitable entities."

There was negative reaction to Obama's remarks from the Center for Security Policy, whosestatement made the broad claim that "zakat payments have very often gone to charities that support terrorist organizations." Accusing the entire charitable sector of complicity with terrorists is both unproductive and unfair, and feeds the perception that the west is at war with Islam. 
 
Muslim Public Affairs Council Executive Director Salam Al-Marayati told the New York Daily News, "The perception that giving to charities is financing terrorism has to be debunked. It hurts America." 100 Muslim leaders from around the world published a joint statement with thoughts and reactions to the speech.  There was general support and praise for Obama’s points about combating extremism, promoting communication, religious tolerance and economic development.

In his speech, Obama noted that the trauma of the 9/11 attacks provoked understandable fear and anger and "in some cases, it lead us to act contrary to our traditions and ideals. We are taking steps of change course." As examples, he noted his order banning the use of torture and closure of the prison at Guantanamo Bay by early 2010. Fair and reasonable charitable giving rules that protect legitimate aid and development programs would be another step away from policies based on fear, anger and prejudice.

As the Charity and Security Network statement said, "Americans' generosity toward people in need is an asset our government should leverage in winning goodwill in the international community, not impede with a legal regime that is both unjust and ineffective. The time has come to develop sensible long term counterterrorism policies that allow charities, aid and economic development programs, human rights advocates and their donors to operate without undue fear of prosecution or being shut down.  This will surely give the President's words real meaning."

 

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